Many finance leaders and IT leaders act like adversaries, especially as inflation worries grow and budgets shrink.
But the need for IT and finance to partner and collaborate is critical. That's especially important as more companies look to create digital transformation in their financial operations: According to a Workday survey, out of the respondents who said their CFOs and CIOs lack a close working relationship, only 28% have created and launched a digital finance strategy.
Here are a few strategies CFOs and CIOs should pursue to improve the finance-IT relationship.
1. Create IT-finance teams
Creating groups with members from both departments can improve decision-making because IT and finance employees can contribute their expertise.
Jim Durham, CIO of the Denver-based Solar Panels Network USA, along with the company's CFO created teams that are responsible for specific goals and objectives that apply to both departments.
Forming groups like this can help emphasize the common ground between finance and IT.
Assigning one person in the finance department to become an expert on IT operations and an IT employee to learn about the finance department can work well, said Dave Roberson, president of RoseRyan, a finance and accounting advisory firm located in Campbell, Calif.
"Or you could have a finance person on the IT team and vice versa," he said.
2. Increase understanding of the other department's operations
CFOs and CIOs may not even realize how little they know about the other group's needs and goals.
Technology is often the single largest expense for a company, said Khalid Kark, global CIO research director at consulting firm Deloitte. However, the technology environment's complexity and the use of external technology providers obscures IT's true operations and needs. In turn, CFOs may find it easy to say no to IT investment requests.
Finance leaders and IT leaders should work to better understand the other department's priorities. IT can typically do a better job marketing IT needs, and finance can do a better job working to understand IT's value and needs.
3. Invite IT and finance members to brainstorm strategies
The CFO and CIO should ask their department members to consider how to improve finance-IT collaboration. Employees may have ideas based on their existing collaboration with other departments or work processes that they feel could go more smoothly.
Dave RobersonPresident, RoseRyan
For example, members of the IT department may suggest ways to make the finance department's work on the IT yearly budget happen more quickly.
The benefits of finance-IT collaboration
Improved IT-finance collaboration can result in a number of benefits to enterprises as a whole, including potential improvements to the company's bottom line and its security practices.
Better technology investments
Finance leaders can contribute an important perspective to tech investments.
The single biggest benefit of a strong CIO-CFO partnership is financial discipline -- that is, more transparency and accountability -- for tech investments, Kark said. Many organizations spend too much time building business cases without tracking the investments' performance later, which is even more important.
CFOs can hold people accountable for delivering value, Kark said.
Improved information security and compliance
With IT's help, the finance department's security practices will likely improve.
The need to protect sensitive data has never been greater, said Thomas Vick, regional director at Robert Half, a human resources consulting firm. Finance and IT can address the risks posed by cybercriminal activity and compliance demands.
Better budget decision-making
When the CFO and CIO work together frequently, difficult budget conversations will likely become easier.
If the finance and IT departments already have a strong working relationship, the CFO and CIO will likely be more able to fairly allocate funds and make hard decisions that will benefit the company overall, said Shoma Meyer, vice president of finance and accounting at SPR, a digital technology consultancy located in Chicago.