CIOs and CFOs often find themselves at opposite ends of the boardroom table, one tasked with reducing financial risk and the other looking to get as much productivity as possible from an often limited technological budget.
But financial services technology (fintech), data analytics and cloud-based solutions are playing a significant part in redefining the remit of these two executive roles.
In today’s hyper competitive environment, where every business is looking to do more for less, the financial and operational success of a business has as much to do with savvy investments and strategic risk management as it does with innovation and the ability to embrace new technologies.
However, no one person or department can lead all the changes required for digital transformation in the data-driven age. Given the areas of expertise of CIOs and CFOs, their collaboration is integral to the process.
As technology permeates new corners of business operations, we’re already beginning to see both of these executive roles expanding, even to the point of crossover.
While there is still a need for give and take when it comes to budget, CIOs and CFOs are increasingly taking a more collaborative approach to their responsibilities. According to a recent survey into CIO and CFO relationships conducted by EY, 61 per cent of CFOs report increased collaboration with their CFOs in the last three years.
The growing collaboration is leading to CFOs loosening their grip on the purse strings when it comes to IT spending. In fact, what’s beginning to emerge is what KPMG call the ‘Renaissance CFO’: someone who transcends all traditional executive roles, an organisational leader whose remit goes well beyond the finance function.
Today’s CFOs must be well versed when it comes to strategy, analytics, operations and even talent management. In many respects, these ‘Renaissance CFOs’ are now key drivers when it comes to effecting changes to operational efficiency, a clear crossover with the traditional function of the CIO.
A priority shared by CIOs and CFOs alike is that any investment must reap returns for the business, whether that return is measured in terms of finances or productivity.
Given this priority, fintech is increasingly attracting the attention of CIOs and CFOs across sectors, offering both technological innovation and financial efficiency. Even CFOs and CIOs in notoriously innovation-resistant industries such as construction are finding that Fintech offerings can provide a solution which meets both of their needs.
In fact, it’s often the CFO that’s better equipped to identify and introduce fintech solutions, given their deeper understanding of the financial services industry and their own organisation’s payment processes and business models.
Construction is one of the largest growth sectors in Australia, and worth around $300 billion a year to Australia’s economy. Yet it’s also a litigation-heavy industry, responsible for two-thirds of all industrial disputes in Australia. The majority of these disputes arise from missing payments and inaccurate invoices along the contractor chain, simple mistakes that can arise from the traditional arduous manual job of progressing claims.
When I moved across to start my nine-year stint as CFO for a building company, it was a real shock to see that even the most basic technology processes that had been used for decades in consulting and finance were nowhere to be seen in the multibillion dollar construction industry.
I knew there had to be a better way, especially when it came to processing progress claim payments; a major gripe for developers and building contractors around the world. Which is why Progressclaim.com was created to pull construction contract administration out of the dark ages of endless manual excel spreadsheets, reconciliations and email exchanges.
From our experience, the most innovation active companies we deal with have a CFO that can recognise the bottom line and risk mitigating benefits of a fintech solution and a CIO that can see the productivity and efficiency wins.
The adoption of our solution by major Australian construction companies such as Built, Mirvac, Icon, Grocon, Lendlease and 2Construct shows there is strong appetite within the industry for fintech to solve age old problems that left both CIOs and CFOs scratching their heads.
Yet despite the incredible progress that can be made when CIOs and CFOs, IDG’s State of the CIO 2016 survey worryingly revealed that in small companies only 31 per cent of CIOs currently collaborate regularly with CFOs, and the figure falls to 19 per cent in larger organisations.
It’s clear that there’s plenty of room for improvement, not least ironing out misunderstandings between CIOs and CFOs as to the challenges and complexities the other faces in their role. But, as can be seen in the construction industry, it’s clear that it takes collaboration between CIOs and CFOs to drive innovation. Only together will they be able to identify future-proof opportunities that new technological developments, particularly in the Fintech space, can provide for their business.
Lincoln Easton is a former construction industry CFO and the founder of Progressclaim.com, a cloud-based contract billing and approval software for the Australian construction industry.
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