The CFO role and the CIO role are facing tremendous challenges as part of the changing nature of enterprise software implementations. For CFOs, meeting the range of organizational demands -- maximizing company earnings, managing risk and creating effective internal controls in an ever-changing business landscape -- is not getting any easier, especially when the changes are fuelled by rapidly changing technologies. For CIOs, the challenges are equally daunting. According to the latest global research, many enterprise IT functions are struggling to keep up with their own organization's demands, let alone positively contribute to the growth of the business.
Yet most, if not all, organizations have an absolute dependency on their software systems to run their business. Whether these systems are cloud-based, internally operated or outsourced, the rationale for their selection and implementation remains ostensibly the same. This includes the need to increase the efficiency and effectiveness of the overall organization, support business growth and transformation, and lower costs. However, far too often companies fall short of these goals, and the approach to the selection and implementation of enterprise software systems is part of the problem.
To ensure a strategic approach and involvement in systems that affect finance, CFOs should consider the following questions:
- Who is accountable for deriving the value from implementing software systems? For example, if the CIO is accountable for the IT software, hardware and infrastructure; the CFO for cost and enterprise risk; and the sales director for margin, value and revenue, how are the linkages and relationships between these portfolios managed to ensure enterprise-wide collaboration?
- As part of your CFO role, are you able to achieve clear consensus, alignment and commitment across the entire c-suite as to the respective accountabilities for cost, risk, governance and value realization across all enterprise software systems that manage, or have an impact on, the organization's financial data?
At the enterprise level, the value of software systems is realised through the sharing of data, information and knowledge, not to mention the internal productivity and efficiency gains from all the internal processes playing nicely together. Where local business units select and implement systems that affect financial processes without the CFO's -- and CIO's -- involvement, these productivity gains can be lost. The cost and effort involved in building and maintaining interfaces between disparate systems can be substantial. As one example, a local business unit with P&L responsibility can prototype a cloud-based software system that suits its needs and subsequently present the selection decision as a fait accompli. At that point, it is very difficult for a CFO or CIO to counter this compelling proposition.
Those who fill either the CFO role or the CIO role must unite to ensure enterprise software implementations deliver business results with known risk, value and cost.
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