The CFO has always been considered to be more powerful than the CIO. The source of this power is the CFO's authority to approve and sign-off on technology investments. The CIO's role is to propose, the CFO's role is to approve, and sometimes dispose. The questions are: Did the CFO ever have his skin in the game of running the technology function? Did technology matter to the CFO at all?
If we were to trace the evolution, the CFO's direct relationship with technology has been limited to the automation of financial processes and accounting which was largely taken care of by ERP. The outcome of this was the facilitation of financial information and reporting that was the most fundamental requirement. In most organizations, the CFO's brush with technology is still limited to this fundamental area. For the CFO, shifting from software-based accounting to an ERP has been the biggest shift ever in technology.
But CFOs are expected to do much more with technology; even in the area of information and reporting. For example, information is power in the hands of its users. A collaborative environment where information is shared creates higher business impact. Ensuring that multiple types of data from multiple sources are corralled into an information system enhances the richness of data. Differentiating between types of information-transactional or analytical-and processing them accordingly increases the value of information. All of these fall directly within the ambit of the CFO.
Using information to manage business performance has the highest impact. Traditionally, this role has been relegated to line of business managers to use information to manage specific business metrics like supply chain performance, pricing, demand forecasting, marketing performance and such. However, the CFO is well positioned and also responsible to manage the levers of business performance, profitability, asset utilization, financial returns and more, or what the IT world calls ‘corporate performance management' (CPM).
Governance, risk, and compliance are the other areas that directly relate to the CFO. IT solutions help manage corporate governance procedures, identify and quantify various risk parameters and monitor them, and ensure compliance with various regulatory requirements. GRC solutions have been around for a while, but have not seen a high rate of adoption amongst organizations.
Most recently, business intelligence and analytics have become powerful tools at the CFO's disposal. Big data, predictive analytics, data visualization are tools that help higher value decision-making. Also, the nexus of forces (cloud, social, mobile, and analytics) has implications, both positive and cautionary, for the CFO.
The specter of the digital enterprise is not far; digital enterprises would need CFOs who will ally with the CIO, who will access the power of disruptive forces of technology, and who will align themselves to higher business value.