It’s something we encounter a lot in the New Zealand market, where most companies (even our bigger ones) count as small to mid-sized by international standards: the Chief Financial Officer is routinely either directly responsible for enterprise resource planning software or works very closely with the Chief Information Officer. In some cases, the CFO and CIO are even the same person. Now, new research from NetSuite confirms why this combination is such a ‘dynamic duo’ and often leads to improved outcomes from enterprise technology investments.
That’s not all the study shows, either. It’s been a tough few years of late, with the gloom of recession hanging over many organisations while yet others are experiencing weird trading conditions. Even where these are favourable, the one thing that CFOs really don’t like has been present – unpredictability. Be that as it may, NetSuite’s research indicates a shift in sentiment, with a significant number of small to medium organisations expecting a ‘return to sanity’, and along with it, growth is back on the agenda.
Where the CIO and CFO are two different roles within the business, the obvious question is, well, why would the CFO get involved in the technology selection and deployment? That’s fairly easily answered. For one thing, CFOs quite frequently have probably the most comprehensive understanding of the organisation from a process and information-flow point of view. The financial system is generally their responsibility and it is no secret nor surprise that the financial system (General Ledger, Accounts Payable, and so on) is also at the centre of the ERP system. The bird’s eye view of the CFO is therefore invaluable and their insight into process and strategy is instructive. And as we know from implementing plenty of ERP systems for all manner of Kiwi companies, process knowledge and strategic insight are big advantages in achieving a successful outcome.
There’s something else well worth considering. Of course, the CIO’s role in this partnership, (where that ‘hat’ is worn by a separate person) is understanding the organisation they serve along with a more comprehensive appreciation of the complete technology stack – everything from the PCs, to the connectivity, to the servers, the network, and other infrastructure supporting the ERP system and everything else. This differs from the CFO’s narrower focus on the ERP applications and the business processes the software supports.
And while the CIO comes at the ERP project from a technology/technical point of view – necessarily, as he or she must make sure it performs in terms of availability, reliability and performance, stuff that depends on server and storage and network specifications - it is precisely the ‘technology agnostic’ view that the CFO brings to what isn’t really a technology decision at all, which is so valuable. In other much simpler words, the CFO looks at form and functionality, while the CIO looks at the speeds and feeds. The combination of these two essential, but different, perspectives substantially increases the chances of a successful correctly performing ERP solution.
It is interesting, then, that NetSuite’s ‘Gearing Up for Growth? CFO, CIO Alignment Drives Success’ survey confirms that an increasing number of CFOs are planning to get more involved in technology decisions. From our perspective as a NetSuite partner and long-time provider of ERP solutions, this interest is quite targeted around the applications that the CFO is likely to touch, rather than the generalist interest you’d get from the CIO (and of course, it would be like that).
In any event, the study offers perspectives on several additional insights, including the perennial problem of siloed functionality, excess vendor proliferation which can lead to excessive costs and the potential for shelfware, and issues around data accessibility. These issues are ‘perennial’ perhaps at least in part owing to ineffective collaboration and interaction between CFO and CIO…and so the argument is made that for more effective business systems, the offices of these two crucial roles should arguably be collocated. If not physically, then certainly virtually.
I’d recommend looking at the study because it raises interesting points worth pondering for both CIO and CFO…and anyone else interested in a successful, high-performance ERP system Download it here, and expect to spend around 15 minutes reading through it. If you’ve got any questions or comments, or would just like a good old discussion over a coffee, do get in touch. When we’re not delivering the next NetSuite ERP solution for another forward-looking Kiwi business, the next best thing is talking it over!
