Money makes the world go ’round. Score one: CFO. Technology moves the money ’round. Score one: CIO. Earning money is the point of business. Money is earned with technology. Score one each.
One would think that sooner or later these two chiefs would discover their common ground and mutual interests, and that stories about the “natural rift” between them would disappear from magazine pages. Here’s a starting point: both want a “seat at the table.” (Who doesn’t?) Both want to escape their image as technicians of arcane minutia and become players in the strategy game. (Who doesn’t?) Among all those desiring these things, however, CFOs and CIOs uniquely have not only the enterprise-wide view necessary to think strategically but also the tools―money and technology―to act strategically.
CIOs, of course, have always had to justify their schemes and dreams in terms of money; no more so than in times of economic weakness such as we are now facing. And CFOs are more in need of technology than ever. The new reporting requirements, the need for accurate, timely and consistent information, the growing complexities of working with partners outside of the firm, and the new emphasis on innovation―most often driven by and empowered by technology―all make getting the technology right imperative.
In a report last year on the evolving role of the CFO, KPMG concluded that successful CFO leadership has eight components. Interestingly, many involve technology indirectly and others directly:
- Efficient processes and systems so finance can spend less time gathering data and performing basic number crunching tasks and more time on implementing transformation and other strategic initiatives.
- Better information for decision making processes to provide greater transparency into business performance and risk.
- Up to date, integrated IT systems that drive better performance and risk management through high-volume routine processes.
These conclusions mirror our own findings that show a link between maturity in technology management and enterprise-wide financial performance. Companies that have converged the management of their business and technology consistently lead their industry peers in revenue growth, earnings per share growth, and returns on equity, assets and investments.
The data on which the BTM Institute’s Business Technology Convergence Index is built lend credence to an intuitive notion previously supported by anecdotal evidence: technology is strategic and companies able to manage it as one with the business will naturally develop a more realistic strategy and execute it more effectively. Firms unable to overcome the divide between technology and business, particularly finance, will never lead the pack.
Here’s the dirty little secret of strategy: it requires new kinds of information from outside of the firm. Information about markets. About customers, existing and potential. Information residing in the heads of researchers anywhere in the world. Or in the heads of existing or potential partners. Information about new technologies that might work for your company.
All of this information can be gathered electronically, as leading firms are showing: customer and public input, virtual “gathering places” for freelance technologists and other problem-solvers for hire, real-time data on the operations of partners. In this torrent of information lie signals of opportunities and threats―a shift in the buying patterns of your customers’ customers, the introduction of a new product based on a new technology by an existing competitor, the sudden appearance of an entirely new competitor.