CFO-CIO Partnership for Digital Convergence

The Quintessential Technology Source for Corporate Financial Professionals

CFO-CIO Partnership for Digital Convergence

By Bill Genovese, Principal, WGROUP

Bill Genovese, Principal, WGROUP

Emerging technologies provide the perfect storm of opportunity for the CFO and CIO to work closer together to increase revenue, profit, business growth, while at many times in parallel, reducing risk. CIO’s and CFO’s are often “freneimies”, and many times under the best circumstances co-exist together to cooperate. CFO's and CIO’s have sometimes been at odds over the years in organizations, as the CIO is under immense pressure to keep the costs down, typically measured by the CFO as a percentage of revenue. This measurement is rarely forward looking as it is typically focused on “keeping the lights on” for the company, with the IT organization as a “necessary evil” and cost center. What if the CFO and CIO worked closer together to exploit technology to flip this equation to focus on revenue, profit and business growth?

“By working with a new strategy to re-allocate resources and funding, there is a tremendous opportunity to leveragetechnology convergence through the ecosystem of partners to accelerate outcomes and growth for the business”

Let’s examine a trend that many CFO’s are implementing in their organizations–zero-based budgeting. Zero-based budgeting (ZBB) is an approach to decision-making that reverses the working process of traditional budgeting. In traditional incremental budgeting, managers justify only variances versus past years based on the assumption that the “baseline” is automatically approved. By contrast, in zero-based budgeting, every line item of the budget, rather than only the changes, must be approved. Zero-based budgeting requires that the budget request be re-evaluated thoroughly, starting from the zero-base; this involves preparation of a fresh budget every year without reference to the past. This process is independent of whether the total budget or specific line items are increasing or decreasing.

ZBB has transformed organizations from a very angst-filled activity that management undertook only during times of economic duress now to an ongoing, vital process. In times of volatility, profitable companies with a strong competitive edge are best positioned to innovate, grow, and beat the competition. ZBB helps companies identify oftentimes resources that are not generating an adequate return and encourages strategic redeployment of those funds in order to achieve business objectives and strengthen companies’ market positions. And in today’s era of digital disruption, many use those funds to invest in new technologies and capabilities that can help them out-compete traditional and non-traditional, digitally enabled competitors.

By working with a new strategy to re-allocate resources and funding, there is a tremendous opportunity to leverage technology convergence through the ecosystem of partners to accelerate outcomes and growth for the business.

Looking at the CFO’s responsibility from a slightly different angle—regulatory and compliance are additional expenses for the enterprise. ZBB can help to find where there are risks and gaps in an organization for new regulatory demands. However, as this CIO impacting expense is increased by the CFO, thealready planned operational improvement costs are now seen through a different lens as needed to meet a new regulatory mandate. Improvements in reporting, analytics and insight (and underpinning platforms) that are required for regulation can now also become revenue generators for the enterprise.

In conclusion, today's and tomorrow's CFO is best positioned to succeed and help drive their organization to further growth by embracing emerging technologies as an extension of their own technology to accelerate business, improve capabilities, and reduce risk. Those who can best change their mindset from one of competition and increased collaboration with continuous relevance for the customer will be able to help shape the hype from expectation to reality.

Weekly Brief

Top 10 Financial Control and Automation Solution Companies 2019

Read Also

Impact of Emerging Technologies in Financial Services

Impact of Emerging Technologies in Financial Services

Lena Mass-Cresnik, PhD, Chief Data Officer, Moelis & Company
Business & Technology Transformation Alignmen

Business & Technology Transformation Alignmen

Poonam Nath, Senior Director, Operations Excellence & Business Transformation
Why 'Convenience Culture' is Driving Big Business to Fintech

Why 'Convenience Culture' is Driving Big Business to Fintech

Chad A. Schmookler, Senior Director, International Operations, InComm
Robotic Process Automation - Overcoming Challenges to Add Day-to-Day Value

Robotic Process Automation - Overcoming Challenges to Add Day-to-Day Value

Drew Douglas, Head of Global Liquidity and Cash Management, HSBC North America
Transforming AR Through AI

Transforming AR Through AI

Tracy Bracken, Director - Credit & Collections Oldcastle Infrastructure
4 Keys To Surviving Your Digital Transformation

4 Keys To Surviving Your Digital Transformation

Jeremy Behler, Chief financial officer, Sargento Foods Inc.