How to Strengthen CIO-CFO Relations to Drive Business Growth

Tim dreaded talking to Sam. He considered Sam, the chief information officer (CIO), to be the geeky sort who talked all the time about networks, cybersecurity, machine learning, and artificial intelligence. He made him feel uncomfortable and outdated.

For Sam, Tim was the guy who dreaded costs and vetoed any budget requests he would put forward for modernization of the business. He believed that Tim, the chief financial officer (CFO), was archaic with technology and very manual in his methods. Therefore, Sam hated having to talk with that guy.

The chief executive officer (CEO), concerned about the growing distance between the CFO and CIO, decided to take things into her hands. Through this article, we look at why the CEO believes a strong CIO-CFO relationship is critical for the business. We will also explore a few ways to strengthen the CIO-CFO relationships in organizations.

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The imperative for a strong CIO-CFO relationship

There cannot be two people as vastly different as the CIO and CFO. Their educational backgrounds, outlook for the business, and experiences are poles apart. Yet, why do we say that they have to collaborate more? Here’re a few reasons for it.

Alignment with business goals

It doesn’t help your business if two of your key C-suite executives cannot see each other eye-to-eye. Poor CIO-CFO relationship hampers business growth and stalls modernization efforts that could have improved operational efficiency. It also affects customer relationships and internal collaboration, ultimately hindering your  organization’s ability to achieve its goals.

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Tackle the changing market environment

The market environment is constantly changing. So,you need to remain agile to stay relevant and keep up with the competition. The CIO-CFO combination needs to work together to redefine business strategies and technology investments and cater to the changing market environment, tech trends, and customer preferences.

Higher return on investment for digital transformation initiatives

The CFO often considers the CIO as someone who isn’t worried about cost controls and invests in random solutions. If they are able to have meaningful discussions, the digital transformation projects initiated will be more successful and yield a higher return on investment (ROI).

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4 ways to improve CIO-CFO relation

In this section, we look at some strategies to develop meaningful CIO-CFO relationships.

1. Build on the common interests in analytics

If there’s a subject that both CFOs and CIOs love, it has got to be data analytics. CFOs are adept number crunchers and CIOs know their way around all the latest technologies that make number crunching easier and more interesting.

Let your CFO and CIO explore how data analytics can help your business improve efficiency and profitability. Some of the topics that the CIO-CFO duo can discuss include the key business metrics to track, the data required for it, its collection and storage, and the tools that help make analytics and data visualization easier.

The CIO can work with the CFO to provide efficient and secure access to critical business data and metrics such as days sales outstanding (DSO), cash flow forecasts, etc. using automated reporting and visualization tools.

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2. Make innovation a criteria for success

There are several business processes, especially within the finance function, that could do with a complete revamp to catch up with the digital trends. For example, there are several affordable automation-driven alternatives to manual cash application and invoicing that use technologies such as robotic process automation (RPA) and artificial intelligence (AI).

Similarly, the IT team needs to rethink its operations and investments in legacy machines or environments. The CIO may have to revamp the organization’s IT structure to make it more agile and cost-effective. The office of the CFO can help the IT department calculate ROI, replacement costs, depreciation rates, etc. in a more accurate and practical manner.

Process optimization requires both the CIO and CFO to think out-of-the-box and pave the way for radical innovations, often with technologies such as cloud, data analytics, APIs, and artificial intelligence. The CIO-CFO combination has the power to fuel innovation across departments and make the business agile and more efficient.

3. Regular communication, right from when projects ideas are brainstormed

Often the CIO or the IT team loops in the finance department only when they have their investment proposal ready and the budget or expense document needs to be signed. Not fully aware of how the investment will benefit the organization, the files get returned to the CIO’s office seeking more clarification, and obviously without the necessary approval signatures. This leaves a bad taste in the mouth for both the teams.

Instead, the CIO-CFO duo needs to collaborate right from the start of each project, during the ideation phase itself. Having weekly or monthly meetings can help the CIO and CFO be on the same page. This way the CFO can be aware of the potential ROI of different digital transformation projects, right from the start. It can also help the IT team understand the opportunities and risks involved in the new venture. This reduces delays and the time lost due to back and forths.

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4. Have common employee engagement and customer service KPIs

The CIO-CFO duo may not have many common goals or KPIs, but both need to be closely involved to drive employee engagement and customer service objectives. These are the two key pillars that affect business reputation and growth.

According to a recent survey that HighRadius conducted along with CFO Dive, sourcing talent is a top priority for 67% of the CFOs. 57% of the finance leaders believe that the inability to attract and retain talent can cause them to risk missing their 2022 goals. CFOs also agree that hiring talent becomes tougher if the business isn’t invested enough in the latest technologies.

Source: The State of CFO’s Office 2022 Report

Similarly, exceptional customer service, today, requires the creative use of technology. If quick, easy-to-use, and seamless customer service isn’t offered, you risk losing valuable clients and increase your business’s churn rate. Technology tools play a large role in providing superior customer experiences that are unique and modern.

Source: The State of CFO’s Office 2022 Report

CIOs must work with the CFOs and plan the necessary technology investments to drive employee and customer engagement. The tech department should support the quick implementation of the tools necessary to drive these shared KPIs.

There are several other ways CIOs and CFOs can collaborate to drive initiatives that help modernize the business and grow and scale it. In the next section, we look at how CIO-CFO collaboration can improve the cash flow of your business with AR automation.

CIO-CFO combination brings more cash into the business with AR automation

Cash flow is a key factor that CFOs are concerned about. Offering credit to customers is a common technique used to gain new customers and expand sales with existing ones. But there’s always an element of risk when offering products on credit – you may not receive the payments on time or, even worse, incur bad debt!

Automating the workflows associated with managing receivables can help minimize credit risk and improve the cash flow. Working along with the CIO is crucial to automate the mundane order-to-cash (O2C) tasks, reduce inadvertent errors, and ensure that the customers don’t delay payments.

The CIO and CFO should jointly evaluate accounts receivable automation solution providers to ensure that the software they choose offers the necessary features to complete the workflows, is easy to integrate with the existing systems, and can be run with minimal IT support.

The CFO can check with the CIO whether a cloud-based solution works better and if the office needs AI capabilities and out-of-the-box integration. These inputs can help the CFO’s office calculate the ROI on the AR automation more accurately. Implementing the right accounts receivable automation software can streamline cash flow and optimize working capital.

If you are still working on your CIO-CFO relationship, accounts receivable automation can be a common area of interest that’ll help you collaborate effortlessly and build a fruitful relationship. Not to mention the reduced DSO, improved customer experience, and seamless system integration that it will bring.

Come watch a demo of HighRadius’ AR solutions with your CIO and see how we help automate invoicing, collections, deduction, and credit management to reduce DSO and bad debt.