April 14, 2020

Resolving IT-Finance Asynchronization on Cloud Improvements

By Bruce Guptill

Resolving IT-Finance Asynchronization

While CIO-CFO communications and alignment may never seem better, what is considered to be C-level, strategic “alignment” increasingly obscures realities that keep IT and Finance from synchronizing their thinking and activity. This in turn increase the costs of IT, decreases the ability of finance to plan, manage, and operate effectively, and will delay or derail any firm’s competitive ability in a fast-changing digital era.

Part two of this series explained how and why CFOs and CIOs can seem well-aligned while being out of synch when it comes to how finance can and should improve its systems and software. The two camps tend to see the same IT-related issues and needs, but differ significantly on prioritization and scope. This reduces any firm’s ability to invest effectively in business IT needed to compete.

This post looks at how that asynchronization affects the selection of cloud-based finance solutions for the enterprise, and why that asynchronization is too likely to lead to bad decisions. After years of deferring cloud adoption and adaptation, IT and finance organizations and leaders tend to agree that cloud-based, services-delivered infrastructure and software are key to enabling improved finance operation and management. But even still, we see major differences in how each party sees the cloud benefiting finance. That lack of synchronicity leads to strategic planning and management shortfalls, higher costs, and increased friction between these (and other) organizations.

The data analyzed for this post were amalgamated from surveys and interviews with finance and IT leaders from small businesses to the largest global enterprises. Figure 1 indicates the percentage of IT and finance leaders selecting each of five categories as a top choice from a range of selections. For simplicity, we’ve coalesced the data into five broad categories of benefits that IT and finance leaders look for when it comes to enterprise finance operations and management:

  • Improve Finance Data Security
  • Improve IT Service Capability
  • Provide IT for New Business Requirements
  • Upgrade Existing Finance IT
  • Improve Cost Management

One of the first indications is that IT leaders tend to see cloud solutions as having broader implications and capabilities for enabling finance improvement. All five of the categories were selected as top choices by at least 25 percent of IT leaders. But finance leaders indicate only two major expectations – improved data security, and improved IT services. Analysis of the data (including a review of interview answers) indicates that even when they appear to be aligned, finance and IT leaders are out of synch. When it comes to data security improvement, IT leaders see cloud solutions as improving their ability to deliver and maintain data security, while finance leaders expect cloud solutions to immediately provide improved data security. Likewise, IT leaders see cloud solutions as improving their ability to build and provide IT-as-a-service; finance leaders are more likely to expect improved IT services.

Figure 1: Cloud Solutions for Finance – Mind the Gaps

Asynchronization

Source: Addressable Markets LLC. Percentages add up to >100% due to sampling differences and multiple choices.

A lack of alignment and synchronicity is much more apparent when it comes to the three remaining opportunities for improvement. Even so, a surface reading of the data can be very misleading. While they do see cloud solutions as able to satisfy new finance IT requirements, finance leaders express much less certainty about what those new requirements are or will be. IT leaders tend to see more of what cloud-based solutions can do, and so express much greater optimism regarding their ability to satisfy new – even unforeseen – finance requirements.

Similarly, IT leaders usually see more of the broad, potential capabilities of cloud solutions versus existing systems and software. They also know what their organizations and providers can develop and deliver against finance needs. Finance leaders tend to see more process-specific context based on how systems work.

Such context also influences IT-versus-finance thinking about the cloud’s impact impact on the ability of Finance to manage its own IT costs. IT leaders are much more likely to see cloud platforms with more sweeping capabilities to streamline and manage finance operations both within and across processes. Finance leaders meanwhile are more likely to focus on process-specific limitations and improvements.

This difference in vision carries into our last category as well. Between 15 and 20 percent of senior finance leaders still don’t know how the cloud can improve what finance does. That suggests a widespread lack of synchronicity that will lead to gaps in understanding, planning, and execution – which in turn will inflate costs and reduce the ability of finance to improve the company, and reduce the ability of IT as a function to enable and support finance.

Alignment at the C-level is too often misleading and dangerous, and masks costly asynchronicity. CIOs and CFOs tend to report similar visions, and use similar terms, but apply and assume different definitions based on their relative spheres of influence and experience.

The solution is simple, but never easy: push responsibility for communication and understanding down the management stack. Make sure that every IT person managing the enablement and support of every finance operation understands, and can explain, that process correctly and completely to any level of enterprise operations and management.

Don’t make IT managers and directors into finance experts – but enable them to say, “This is what this group does; this is how this group works; this is how they use this IT.” Coalesce this insight through weekly or monthly discussions and/or problem-solving workshops with mid- and senior-level IT and finance leaders, and within a year you should be able to frame finance functions, systems, and operations in ways that (1) identify the effectiveness gaps noted in my previous post; (2) clearly identify the most likely benefits of cloud (or other) solutions; and (3) developed exceptional synchronicity between IT and finance.

Review and improve what works, and then apply it to Sales, Marketing, HR, and other functional groups within the company. A working digital business framework, complete with process and IT investment requirements, will emerge.

By Bruce Guptill

Bruce Guptill

In addition to directing the business of Addressable Markets, Bruce’s own research and expertise focus on the changing business value of IT software and services. His work for enterprise clients includes IT value and cost modeling, and business planning for IT that enables new business value, especially for Finance and IT organizations. His provider client work translates the changing business value of enterprise IT into improved business strategies and go-to-market efforts.

At Information Services Group (ISG; NASDAQ: III), Bruce had responsibility for enterprise-facing research services and global Research operations, and directed Research customer and Sales support staff globally. As part of the founding team at Saugatuck Technology, Bruce helped to build and lead that firm’s research and consulting business for almost 15 years. ISG acquired Saugatuck in 2015.

Bruce’s background prior to Saugatuck and ISG includes senior positions with research and consulting firms Gartner, TeleChoice, and Robert Frances Group, and editorial positions within the IDG publication group. His marketing focus was honed as an executive for software providers, IT VARs, airlines and manufacturers. His sales and channel experience began carrying a sample bag and calling on engineers, then marketing for IT VARs, advising telecom carriers on M&A and partner choices, and developing partner programs for software and services firms. He has been called as an expert witness in IT business court cases, and contributes IT business insights to business and tech media.

Bruce holds an MBA in marketing and finance, a BA in the psychology and business of mass media communication, and certification in several software, networking, and engineering disciplines. Married with three children, Bruce has served as Vice Chair of the Cape Cod Children’s Museum board of directors, supports local veterans’ groups and musicians, and is licensed to fly airplanes, pilot boats, and ride motorcycles.

Maximize IT Asset Efficiency: Discover 10 Leading Management Tools

Maximize IT Asset Efficiency In today’s digital age, IT Asset Management (ITAM) services have become [...]
Read more

SIEM Tools: Cloud-Based vs. On-Premises

What Are SIEM Tools? SIEM tools are designed to help security professionals identify, track, and [...]
Read more
David Cantor

Impact of AI in Storytelling and Creativity 

These are monumental topics that command volumes of diligent research, backed by empirical evidence and [...]
Read more
Andy Hilliard

Accelerance CEO Unveils the Future: AI’s Role in Software Development

In this edition of CloudTweaks, we feature an insightful discussion with Andy Hilliard, CEO of [...]
Read more
Vulnerabilities

Flashpoint’s Cyber Threat Intelligence Index Edition

Cyber Threat Intelligence In an era of rapid digital transformation, we have witnessed a concerning [...]
Read more
Laduram Vishnoi

8 Best Practices for Real User Monitoring

Real User Monitoring You have built an amazing website or app but still do not [...]
Read more

SPONSOR PARTNER

Explore top-tier education with exclusive savings on online courses from MIT, Oxford, and Harvard through our e-learning sponsor. Elevate your career with world-class knowledge. Start now!
© 2024 CloudTweaks. All rights reserved.