Can’t business leaders and tech leaders get along?
C-level collaboration produces results
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- Written by John Ginovsky
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- Comments: DISQUS_COMMENTS
Bank tech trends can make your head spin. So each week longtime Tech Exchange Editor John Ginovsky does his best to “make sense of it all.”
In today’s customer-driven era of business strategies, it’s no longer sufficient for line-of-business leaders to say to IT leaders:
“Here’s what we need to do. Find a way to do it.”
Understanding customers’ needs and doing so efficiently relies on advanced technology. But to provide the right advanced technology in the right way requires collaboration between all the leaders at the top.
Another lurking cause: cyber risk
There’s more. Customer centricity isn’t the only factor that’s driving the need for better and more CIO strategic involvement. Growing awareness that cyber security is an integral part of the entire enterprise also drives this shift. Everybody in a bank has to be involved in fighting the very sophisticated cyber criminals who pose real and dire threats. (For some examples of the risks, see “You are the weakest link.” )
This realization has been simmering for a while. Now there are indications that it’s becoming more widely recognized.
“In today’s digital economy, the financial well-being of an enterprise is dependent on the health of the CFO-CIO relationship. In order to succeed, organizations must make bold technology investment decisions that are driven by corporate strategy, while managing a range of severe risks, such as cyber security and data privacy concerns,” says Julie Teigland, CFO program leader for Ernst and Young in Europe, Middle East, India, and Africa.
A global survey by EY, involving 652 CFOs, found that 71% of them report increased involvement in the IT agenda in the last three years. Among that group, 66% make cyber security a high or very high priority. Meanwhile, the survey found that CFOs’ insufficient understanding of IT issues is the No. 1 barrier in their relationship with CIOs.
There’s even more. If all of the above weren’t enough motivation for CIOs to be more integral with a business’s strategic plans, CEOs are seeing more clearly the relationship between technology and their bottom lines.
Gartner surveyed 400 senior business leaders in user organizations worldwide. As has been the case in past annual surveys, business growth was their No. 1 priority. What was next was surprising.
“The second most important category of business priority for 2015 and 2016 is technology related. This is the highest position we have ever seen for technology in this survey and it’s our firm belief that CEOs are more focused on this area than at any time since 1999,” says Mark Raskino, vice-president and Gartner fellow. “When we examine the subtext of the responses, the purpose of CEOs’ interest in technology becomes immediately obvious. Over half of the responses relate to revenue- and growth-related technology issues such as multichannel, ecommerce, and mcommerce.”
Meanwhile, back in the real world …
Knowing all this and doing it, though, is not easy, as several other observers note.
For example, a survey by Robert Half Management Resources found that 41% of CFOs say staying current with changing technology is the greatest pressure facing their accounting and finance teams.
“Companies need accounting and finance staff who are proficient with enterprise resource planning systems, are able to automate financial processes, and can tap business intelligence tools to mine data they can turn into strategic guidance,” says Paul McDonald, senior executive director for Robert Half. To do all that, he adds, requires the use of skilled teams—namely those who do understand the related technologies.
KPMG’s own survey estimates that virtually all U.S. companies are in some stage of business transformation. Yet clearly one in four fail to realize the most out of their efforts—due mainly to changing customer demands and preferences, disruptive technologies, and the evolving regulatory environment.
“To extract as much value as possible from a transformation initiative, organizations should connect their strategic and financial aspirations with the necessary set of integrated, aligned, and motivated capabilities to achieve it. Too often, organizations view their operating model as a way to reduce costs instead of an asset to create value,” says Stephen Hasty, global transformation leader at KPMG.
Of course, there are examples of successful collaboration between IT and lines of business.
PMG, which provides business process automation software, surveyed 250 North American corporate IT professionals. The firm notes a distinct and positive trend associated with the relationship of business and IT leaders due to increased use of intuitive technology (i.e., not requiring coding expertise) as well as an emphasis on improved user experience with business-related software.
“Investing in and deploying easy-to-use technology is not only beneficial to the user, it’s ultimately valuable to IT,” says Joe LeCompte, principal of PMG. “When business users feel empowered, IT suddenly has more time to focus on strategic objectives that enhance the organization as a whole. This positions IT to become more of a collaborative partner.”
Which circles back to a point made by KPMG’s Robert Vanderwerf, global transformation strategy leader: “Mapping a customer-driven transformation starts at the end result—the delighted customer. You need to look at the journey—the value chain that leads to that ultimate customer value—and how it’s achieved through the organization. A lot of this comes down to connecting the dots from the strategic aspiration—the delighted customer—and the execution of that aspiration through the business and operating models.”
How to get things moving at your bank
Here’s how EY suggests connecting the dots between CFOs and CIOs:
• Build finance leaders’ understanding of IT issues.
• Share responsibility for driving innovation through digital IT.
• Shift the IT operating model from capital expenditure to operational expenditure.
• Manage risk exposures of new digital technologies.
• Work as peers, despite a still-common reporting line of the CIO to the CFO.
• Make data a fourth pillar of the business, alongside people, process, and technology.
• Treat cyber risk as part of enterprise risk management.
Sources used for this article include:
Digital Agenda Is Driving Closer CFO-CIO Collaboration, But Lack Of Understanding Of IT Issues In Finance Function Remains A Significant Barrier
CFOs Cite Staying Current With Technology As Biggest Source Of Pressure In Accounting And Finance
One In Four Companies Fail To Realize Optimum Value From Business Transformation
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