CFOs Try to Focus on Strategy, but Information Technology Systems (IT) Get in the Way
A number of our Financial Professionals and CFOs expect to evolve their Information Technology (IT) for their Firms in the coming year, but some are dreading the journey via clunky legacy systems. 1
Frequently information technology (IT) for CFOs and finance professionals and sometimes for entrepreneurs can be a “Black-Box”. Throughout our offices, we hear “I know I have to have it, but I don’t understand how it works.” 2
Why buy into something that’s good today and obsolete tomorrow? As a responsible business leader overseeing an Enterprise System, I expect that I’m going to make an investment into an IT System that I expect to last 5-10 years. So, it seems my best option is to purchase a Complete System.
“I know I have to have it, but I don’t understand how it works”
Spending forecasts related to IT spending have risen in four consecutive quarters among finance decision-makers in a survey by the AICPA. In the first quarter of 2016, CPA executives expected spending on IT to increase 2.3%. By the first quarter of this year, that number had risen to 3%.
Beyond SoHo (Small Office, Home Office); More than QuickBooks
Imagine you have a Medium sized multi-location enterprise business. You’re not huge, but you’re still sizable and you still need to pay attention to your Point of Sale Systems that integrate with your credit card processor, that has to integrate with your bank, that has to integrate with your bookkeeping, and your payroll system, not to mention that you have to monitor labor costs, wages and your business’s infrastructure. So, you can see as a CFO and/or business owner, you have to start to tie all of these business components (information) together.
A common belief among CFOs frequently prevents them from focusing resources on growth and digital transformation initiatives by the need to invest in expensive Legacy IT systems and maintenance.
Buying into the Process; a Commitment
Information Technology (IT) Systems are like our Legacy; if I purchase a Building, I have to live within the footprint of the building; I can remodel it, but I can’t change the building.
A common belief among CFOs frequently prevents them from focusing resources on growth and digital transformation initiatives by the need to invest in expensive Legacy IT systems and maintenance. Those inherent and expensive IT costs could be the greatest barrier to future growth as a result. 3
What Other Things Do I Need to Consider
When you make an investment, it’s learning a new language, teaching people to use the new system, it changes the way you think, it has to do with how your customers interact (user interface).
A CFO’s concern is;
“I’m going to make this investment, but what other things do I need to “Deal With” to make this work. Like…”
- Information that that comes in and out of the System
- Can I have a Common language inbound and outbound?
- How seamless will the evolution of this System be moving forward
- What are our “What If” scenarios?
- If we grow really large, will my infrastructure grow with me?
- What are your choices?
The ability to operate more efficiently is the chief investment area among the 404 U.S. executives Grant Thornton surveyed. The top four areas of investment focus for 2017 are:
70% Operational improvement
46% Sales and marketing
42% Information Technology (IT)
41% Customer experience
Attention to Strategy and Operations
CFOs including myself are still prioritizing the finance department’s focus on increasing cash flow and cutting costs, but they also are being counted on to take part in companywide strategic planning.
I would recommend that there be a larger focus on strategy. That goes hand in hand with the need for predictive information in order to advise where your company should be going. … If you don’t have the right predictive information, then your strategy is reduced to looking into a crystal ball.
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JOE FOOS
June 22, 2018 (4:04 pm)
Just came across this article Dan. Great points you make, and exactly the type of strategic technology planning more organizations should be making these days. Unfortunately, most companies rely on their legacy IT staff to make strategic choices. And sometimes, those decisions are stuck in the dark ages with regards to old-fashioned ways of doing things. I remember when Blackberry devices first came out, IT wanted nothing to do with them and actively discouraged executives and managers from adoption. Those legacy IT folks were more worried about the extra work they had to do to make Blackberry devices function with their email server, than the actual ROI and instant productivity gains the business leaders could touch and feel right away. It took a while, but eventually, business leaders told IT leaders to help them or get out of the way. It’s the same with cloud services, IT security, and more these days.