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This piece was originally published on Quartz.
Thirty-eight percent of CFOs are responsible for IT departments, but many finance departments operate separately from their IT counterparts. As CFO duties evolve to include greater technology responsibilities, it is vital for modern finance departments to prioritize a data strategy. In fact, digital transformation is a necessity. Without evolving the relationship between finance and IT to prioritize data and actionable insights, your business risks falling behind competitors and achieving full potential.
Every business sits on mountains of data, but applying that data to arrive at strategic insights will help businesses achieve their transformational goals. This requires input from IT. As Gartner, Inc. states, “In a world where data science still offers competitive advantage but ‘possession’ of a data scientist does not, the source of competitive advantage shifts to the organization that can apply data science analysis to the most compelling use cases and ensure adoption of the resulting insights.” Begin conversations early with IT and have them frequently to prepare for adoption of new technology. If you embrace your role as an innovative finance leader, and elevate your partnership with IT, improvements to budgeting, planning, competitive analysis, and differentiation will happen.
IT and finance departments share more similarities than differences. Both use data for accountability and decision-making, and they share responsibilities to oversee data security, quality, and governance so regulations like General Data Protection Regulation (GDPR) are followed. And IT departments are at the forefront of establishing data management standards and implementing systems that enable a data-driven organization.
As lines blur between finance and IT, understanding the technological risks and needs for data management becomes necessary to achieve success. Working with financial data across a larger team requires a secure, powerful, and flexible platform with centralized data management that allows for a custom, scalable approach to user access. IT can help finance achieve their corporate objectives, if both departments work together to keep corporate data secure.
It's likely that your finance team uses systems, company hardware, and public cloud providers that all rely on your IT department. While complex, you rely on this infrastructure and technology stack to run daily operations, which makes close collaboration with IT essential to ensure processes are efficient, secure, and scalable.
Changes that seem only finance-related, like updates to the existing ERP revenue-module, can have downstream effects on order processing or customer-billing systems. By involving IT in these decisions, finance leaders can identify cross-system dependencies and develop a project plan to seamlessly implement updates. Or, if your team wants a new technology to improve a certain function like shortening close periods, IT can suggest a process change or how to use existing software.
IT can empower and support your finance team during critical times like period-end and planning cycles. But, the partnership can be much more valuable, if you connect beyond the corporate reporting cadence. IT teams are at the forefront of tech advancements and should be your in-house experts on applying new technologies like artificial intelligence or machine learning. A close partnership gives IT the ability to discover and implement systems that are uniquely suited to address finance’s needs, helping your team spend less time updating tedious reports and more time uncovering insights that generate success.
Aggregating and analyzing data sources is a dizzying task to manage for most businesses, but it’s critical to make the right decisions based on the right data. Align with IT to determine your data infrastructure needs and you can free up finance talent for valuable strategizing.
There is a massive opportunity to transform finance departments from a record-keeping, reporting, transaction-processing function into a strategic function that drives value with data. Instead of merely transacting data, accounting and finance teams can focus on analysis: interpreting what data means for the bottom line; determining how to address difficult transactions; and investigating the most effective accounting strategies for your operations. After all, you’ve hired talented individuals to help run your business—not just run reports.
Systems and applications implemented by IT can have a profound impact on how finance departments manage and analyze data. With both teams working together, your business can solve complex problems and achieve its objectives evolving to a modern, data-driven finance team that is differentiated and thrives in an increasingly technical industry.