Economic and Digital Disruption Merge in the C-suite
By Rich Penkoski, Deputy CEO, Markets, Deloitte Consulting LLP
The stakes are high as businesses recover from the pandemic-induced economic downturn and strive to synchronize innovation and financial strategy. But such an undertaking is only possible with C-suite buy-in. While chief information officers (CIOs) and chief financial officers (CFOs) have traditionally stayed in separate lanes, alignment of the two roles is essential to creating future long-term success.
CIOs and CFOs are facing new challenges and responsibilities within the ever-changing COVID-19 business world where digital transformation is rapidly accelerating. Employees and companies were forced to shed any “techlash” thinking as they had no choice but to fully embrace technology for remote work. Some organizations embraced this change and are poised to quickly recover and thrive in crisis mode. Others took tentative steps forward and are now making material investments in digital technologies to stay relevant with their customers, employees, and stakeholders.
Amid the COVID-19 crisis, CIOs have been balancing the demands of remote work, cybersecurity risks, and the unexpected strain on technical infrastructure with the need to be fiscally prudent as revenues and profits are under pressure. Similarly, CFOs took center stage as companies sought to rapidly fund new technology investments, while taking a more detailed look at spending and questioning traditional business practices in the new digital normal.
Together CIOs and CFOs can improve resilience in this unpredictable landscape. As we consider a variety of potential scenarios for the world remade, the importance of technology investment is clear. Maximizing the benefits of investments requires a higher level of strategic alignment between IT and finance. This alignment is vital in certain areas that are essential for long-term success:
Elevating the Human Experience
Keeping human connection top of mind is fundamental for leaders as they navigate the evolving scope of technology and financial management. CIOs and CFOs need to respond to the evolving expectations of internal and external stakeholders as it relates to the way they engage with technology. Customers expect seamless integration between their physical and digital interactions with an organization. In many cases, this requires a fundamental redesign of critical business processes, with IT being the primary solution architect. Similarly, elevating the human experience can help CFOs effectively present management reporting that prompts better decision making, and external reporting that better informs the investor community. Shaping the way constituents consume information should be the cornerstone of a CIO and CFO joint leadership strategy.
Funding Technological Innovation and Introducing New Technology to Markets
The pace and level of technology investment required to react to external events and support new business models is often constrained by available funding. This puts unnecessary pressure on the CIO/CFO relationship at time when these two key leadership roles must act as a team. New technologies and methods of implementation can make ROI more difficult to measure, yet at the same time accelerate innovation within an organization.
Refining how return on investment is measured opens an opportunity for CIOs and CFOs to think more broadly around where to invest, and how to take advantage of the financial and intellectual strength of ecosystem partners. Co-innovation with major software and service providers is becoming more prevalent and accelerating value for many organizations. CIO leadership is essential in assembling the ecosystem partners needed to deliver a solution, while CFO expertise is needed to create commercial arrangements that offer value to all parties. This well-aligned CIO/CFO team can actually help their organizations realize increased value at a faster pace while reducing their overall financial investment and risk.
Migrating to the Cloud
The COVID-19 pandemic marked a dramatic shift in cloud migration acceleration. Many companies that made a smooth transition to remote work had already made significant progress on their migration to the cloud, while others were effective in deploying cloud solutions as remote work became a necessity. Regardless of approach, the pandemic served as a catalyst for companies to revisit their business models and embrace cloud technology at a faster than expected pace.
As companies embraced new ways of working and employees have become more reliant on virtual collaboration, many of the traditional barriers to cloud adoption are being lifted. For example, seeing durable and resilient cybersecurity solutions working at scale provides confidence to those who were reluctant to adopt cloud applications for their business. In addition, the cost savings associated with remote work can be used to accelerate cloud migration activities. Finally, cloud software providers continue to enhance their offerings, providing more robust solutions that can effectively scale to organizations of any size. These factors offer a platform for CIOs and CFOs to sponsor cloud solutions to meet the evolving needs of their business. As champions for technology-enabled change, these C-suite roles are well-positioned to use this time of uncertainty to position their organizations for long-term success.
We are facing two simultaneous disruptions, a forced digital transformation, and a sudden economic recession. Unshakable yet balanced, adaptable executive leadership can guide companies as they embark on a path toward recovery.
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