CFO, CIO partnership is key to successful digital future
During the current IT boom, organizations continue to build out their SaaS portfolio and this means that the CIO and CFO must work together to avoid busting their IT budget.
According to Eric Christopher, CEO and CO-founder of Zylo, the leading SaaS management platform, a partnership between the CIO and CFO can make or break whether an organization is able to capitalize on their SaaS investments and spur future growth. And if an organization is able to more proactively manage their IT budget, they can ultimately give power back to the C-suite.
Here, we discuss with Eric, who has 14 years of buying and selling software under his belt, the increasingly important relationship between the CIO and CFO.
IT spending is projected to reach $4T in 2021 according to Gartner. What role do CIOs and CFOs play in ensuring their organizations don’t bust their IT budgets?
Eric says: CIOs and CFOs are often two sides of the same coin. While CFOs have traditionally been cast as the savers and CIOs are the spenders, yet both share the common drive of maximizing value of investments and containing costs while still investing in and enabling the employee experience.
The pandemic accelerated digital transformation plans for many organizations, making it crucial for CFOs and CIOs to band together to make strategic technology decisions. With technology and SaaS continuing to evolve and grow, CIOs now have a broader responsibility to manage costs across the entire organization. Instead of focusing on the financial impact of what is being paid for, CIOs are now more concerned with getting value out of what’s being bought and ensuring it is helping to drive business outcomes.
Why is it important for CFOs and CIOs to work together to manage their growing SaaS portfolios? What are the potential benefits?
Eric says: As part of the uptick in digital transformation initiatives, we’re seeing an explosion in the adoption of SaaS tools to keep teams connected, productive and happy. CIOs and CFOs assess and evaluate all of the investments made in 2020 to better understand what’s working, which applications are no longer being used and which applications are ultimately driving business value.
Organizations looking to get the most out of their SaaS investments must have active oversight and management of subscriptions. Proactively managing costs allows organizations to reinvest savings into larger initiatives like digital transformation.
What should a strong CFO-CIO partnership look like? What roles and responsibilities would each executive have? Where should roles merge?
Eric says: Ultimately, CIOs and CFOs should be centered on the same goals -- enabling the organization to meet business needs while maximizing the value of its investments. CFOs bring the savings mindset by asking questions such as: Are we getting ROI for our purchases? Are those purchases helping us meet our needs? Are we putting what we’ve purchased to use? Many CIOs also play a role in managing costs and playing a strategic role in ensuring the organization (both at large and within business units) has the tools it needs to be successful.
What else can organizations do to proactively manage their IT budgets?
Eric says: Organizations must leverage utilization data to make informed cost cutting and savings decisions. Cutting back on unused licenses and rationalizing a SaaS portfolio will free up funds to invest in other strategic initiatives. It’s also important to forecast technology for future company growth based on employee count and digital transformation growth expectations. Many companies that have underestimated this have fallen short in following years forcing tough decisions down the road.
The pandemic has created a SaaS boom, making it so an average organization manages 651 applications. What can a CIO and CFO do to make sure all these applications are being properly utilized and monitored to ensure licenses are accurate and updated?
Eric says: The CFO and CIO need to invest in tools that enable organizations to make smart, strategic and budget conscious decisions that meet the needs of the business. Duct tape and spreadsheets aren’t going to cut it especially as organizations grow. We often suggest that organizations invest in a dedicated headcount or managed services to proactively manage their SaaS portfolios.
SaaS is an unstoppable force and is a growing faction of nearly every organization’s IT portfolio. For this reason, it’s imperative CFOs and CIOs get in front of it now, especially as hybrid and remote work becomes the norm. Organizations must manage the increasing volume of SaaS vendors strategically and professionally as this cost is quickly becoming a top expense for organizations.
After 14 years of buying and selling software, Eric Christopher knew there had to be a better way to manage cloud applications within a company and so co-founded Zylo. Zylo's mission is to empower companies to embrace the rapid growth of SaaS by controlling costs and risks while improving employee effectiveness. By providing visibility into SaaS spend and utilization, Zylo delivers a comprehensive SaaS system of record, empowering business leaders to discover, optimize and govern their SaaS investments. As the leader in SaaS management solutions, Zylo is trusted by enterprises worldwide to provide employees easy access to secure and compliant applications, while reducing operational burden.