We have been supporting clients across many industries and sizes for as many years. Our group’s collective experience is estimated at over 150 years, in fact. Our team has worked at notable consulting companies including Ernst & Young, Deloitte, Alvarez and Marsal, Cognizant, and Cap Gemini to name just a few. This coupled with team members that have worked in multiple industries and companies such as FIS, Jack Henry, BNSF, Electronic Data Systems, Lloyds of London, and the like provides us a strong base of knowledge and many lessons learned that can be shared. We support both the IT needs of the company and the finance and accounting needs, which allows us to understand both sides of the situation.
This post draws upon that experience base to offer up ways to bridge the gaps identified with the end goal of improving business performance.
Trends Impacting Communication
The trends we have seen that have been causing the gaps to arise include:
- The sheer pace of technology changes – where new options exist for business applications like CRM, ERP and BI, networks, and computing. With Artificial Intelligence tools hitting the mainstream – we are experiencing an even faster pace of change.
- The rapid increase of Cyber Security related issues – the proliferation of ransomware, sophisticated phishing attempts, and the availability of Cyber Security insurance to help companies mitigate risk.
- The CFO’s role in many companies has been emerging – and extending to covering the Information Technology group as well as traditional finance, accounting, and treasury functions.
- CFOs have not typically been trained in technology topics through their education and work experience – and computer science majors have not been classically trained on finance and accounting topics.
- The building technology debt in the company – due to under investment over the years in key applications typically expressed as, “the third-party vendor finally says it will ‘no longer support application x no matter what the price,’” and other examples.
- The changing roles in IT with the importance placed on Chief Technology Officers (CTOs) versus the Chief Information Officers (CIOs) the various shades of CIOs.
- The emergence of cloud computing – where companies are now ‘renting’ their compute capacity versus having a fixed asset approach with internal data center and servers. Companies like AWS and Microsoft have been experts at providing these services while providing a complex set of pricing and terms that can challenge the brightest CFO and CIO.
Challenges: The Root of Communication Problems
The problems we typically encounter can be broken down into several categories:
- Communications mismatch – the finance and accounting terminology does not match up with the technology terminology.
- IT groups not viewed as strategic to the business – CIOs/CTOs not having a seat at the executive table shield them from knowing the strategic direction the company is taking.
- CFOs uncomfortable with understanding the technology terms – and how to ask intelligent questions.
- IT leader talks in terms that only another tech person would understand – causing confusion and frustration. Just trying to explain Agile software development process to anyone not involved or trained on the technique!
How to Bridge the Communication Gap
Now for the payoff: ways to bridge the gaps we have collected over the years. No one size fits all so take the ones that meet the needs of the organization and jettison the rest.
- Give the IT leader a seat at the strategic table – this allows the vision to be more closely mapped to the current technology footprint. This doesn’t always require an organizational change, i.e., IT leader reporting to CEO. Just invite them into the strategic planning discussions.
- CFO needs to invest some time in understanding IT trends, terms and how it affects the current IT portfolio at the company. This can come from attending periodic third-party sessions on technology trends, reading magazines like CIO Magazine, Wired, etc. It can also come from understanding the current IT portfolio for the company and associated ‘road map’ if available.
- The CFO and CIO/CTO (or IT leader) need to invest time educating each other on their perspectives. Maybe use some outside facilitation to help enable and hold each person accountable. Take baby steps in defining some key metrics that have both IT and Financial metrics. Have each person share and explain the reporting they use to communicate to the organization.
- CIO/CTO (IT leader) needs to invest some time understanding the financials for the company, and how things like forecasting are performed at the cursory level. This may include taking an external class on accounting, finance, and/or the like. It could also include attending third-party presentations on economic forecasts or things like merger & acquisition classes (how companies are valued).
How can we help you?
If any of these ideas strike a chord with you, you are not alone. We have tools and examples of how to bridge the gaps that we are more than happy to share with you and your teams. It would be nice if there was just one book to read or one website to review that has all the answers you need. Unfortunately, that is rarely the case. Core Catalysts can certainly give you a healthy head start, however.
All the problem areas can be overcome in our experience, and this always leads to business improvement results. We stake our reputation on it. Just ask our clients.