The Tech Savvy CFO: Driving Impact in the COVID-Era
Even before the pandemic took hold, the C-suite found itself navigating profound changes, ranging from geopolitical challenges to business model disruption and the promise of new technologies to transform the enterprise. Along with helping to navigate this dynamic environment, the rapid proliferation of technology has provided CIOs with a platform to pivot from delivering essential technology services at the lowest cost to being business trailblazers, leveraging cutting-edge technologies to gain competitive advantage. As a result, CFOs, once considered to be stewards for the enterprise and operators of the finance function, are now expected to be catalysts that help determine which competing technology investments will deliver the maximum returns while often managing an environment where capital is constrained.
The pandemic has only accelerated this evolution in the C-suite, as companies increase their investments in digital transformation. As the level of technology investment increases in size and speed, the CFO must work with the CIO to reimagine how investment returns will be measured, mobilise ecosystems to increase available capital, and position their enterprises to thrive amid unprecedented change. To do this successfully, CFOs should reconsider what it means to be tech-savvy.
Bridging the gaps
During periods of disruption, the lines between CIO and CFO responsibilities for investment prioritisation can create a natural point of tension. It is certainly unrealistic to expect a CFO to become as technically adept as their CIO counterpart. However, CFOs who spend the time expanding their technology depth will be far more effective at collaborating with their CIO to maximise return on technology investments.
One key dimension of being a tech-savvy CFO is investing focused time to understand the technologies that are most aligned with advancing their organisation’s strategic priorities. For instance, a CFO of a B2C company may choose to immerse themselves in digital commerce platforms, while a manufacturing CFO may analyse technologies that improve supply chain, create smart factories, or adopt predictive analytics technologies. A retail CFO may want to better understand digital commerce and how best to deploy cloud platforms to lower their IT costs. By prioritising which technologies best enable organisational strategies, CFOs will be better positioned to collaborate early and often with CIOs to deliver the right ROI for the enterprise.
It’s a two-way street
Historically, as with the adoption of any new enterprise technology, certain investments may not always deliver the intended returns. To IT leaders, these early investments are vital chances to glean important lessons about technology to apply in the future, while to the CFO, the failure to deliver expected ROI may often lead to hesitation at the next investment crossroads.
As more organisations embrace Agile methods for systems development and as CIOs accelerate the adoption of DevOps to improve operational support, traditional methods of measuring ROI from IT investments are changing. While the first release of a technical solution may fall short of expected ROI, its rapid and continual enhancement may deliver significant long-term benefits. CFOs who promote a culture of experimentation and who measure investment returns over the longer-term are demonstrating another type of tech savvy – one that is essential for today’s rapidly evolving business environment.
Remember, you’re more tech savvy than you think
CFOs have long played an important role in helping their organisation adopt new technologies. In fact, given their financial oversight role, the CFO’s own shop has often been the first stop for the deployment of new technologies, serving as somewhat of a laboratory environment for the mass adoption of technologies like ERP, analytics and robotic process automation. CFOs only need to look back and take stock of this leadership position to become even more tech savvy.
CFOs should continue evaluating and investing in their team’s technological capabilities to advance the finance function as well. When hiring new finance leaders and employees, they should incorporate tech-savvy skills into the job description. For instance, when hiring for a financial planning and analysis role, consider a background or interest in data science, or candidates with AI experience and machine learning skills who can enhance financial decision-making and model planning solutions. Placing a higher premium on technological skills can be a true differentiator for the finance function, and the business at large.
Greater collaboration between the CIO and the CFO is a crucial factor for long-term organisational success. It’s no longer enough for each to simply be expert operators in their own functions. For CFOs serving as brokers of major strategic business decisions, being more tech savvy is quickly becoming a non-negotiable.