Higher stakes. Greater complexity. More risk.
These are some of the deeply-rooted, negative, and incorrect associations CFOs often connect with IT, and it’s starting to hurt their companies. It’s time for CFOs to become strategic with technology.
Accepting the Disruption
The successful integration of emerging technologies within a business determines the competitive advantage a company can gain, and positions it as an industry leader. Therefore, it’s essential for a Finance Department to thoroughly evaluate emerging IT trends and keep their digital strategy not just current, but competitive.
Getting Competitive With IT
Tech investments shouldn’t just be about maintaining the business;. They should focus on getting ahead of competitors and increasing shareholder value. In order for CFOs to do this, they need to think critically about where their financial investment is going and what impact it’s going to have.
Here are three critical questions that CFOs need to ask to become strategic about technological investments.
- How does this technology strengthen our department and the company as a whole?
Or, simply put, why do we want this? CFOs can be overwhelmed with technology requests, and there are a lot of tech options vying for investment.
This question gets to the point and helps differentiate investment opportunities by distinguishing their levels of priority. Use it to investigate whether the technology is essential for business, delivers a competitive advantage, improves processes, or is just something that is nice to have.
- How does this technology impact our current IT strategy and investments?
It’s important to know how incorporating new technology will change the status quo and get an idea of the extent to which things will be disrupted. This question is essential because it not only prepares you for the disruption of your current strategy, but also helps you plan for potential internal pushback.
The last thing any CFO wants after investing a significant amount of money in technology is for it to be rejected. Technological changes can be difficult; however, that does not diminish their necessity. Understanding the extent of the impact this technology will have will help your department and your company appropriately plan process and change management.
- What ROIs can we expect to see from this project?
To strategically invest in IT, it’s essential to have clear expectations and time frames. This includes both short and long-term ROI to make sure you’re maximizing your investment.
This question also helps open the door to future discussions regarding what stages there are to roll out this technology, and the amount of time it will take to develop and deploy new features and functionalities.
Make Tech Your Champion
The perception of technology is changing as Finance Departments realize its significance. Gartner predicts a 2.4% increase in IT investments this year, and as they become a progressively larger portion of the budget, CFOs need to prepare themselves for the IT conversations that will help them invest strategically. While there will always be risks in adopting new technology, there are more and greater risks in refusing to advance.
Using the questions above, CFOs can structure practical, detailed conversations to evaluate potential IT investments and take calculated risks. Incorporating these questions as a standard part of IT discussions will help CFOs determine which investments are most beneficial, not only to their department but also to the company as a whole.