Our first-ever assessment of business expense management yielded some startling outcomes. Among these was the discovery that UK organizations are the most passionate in Europe about developing collaboration between finance and IT.
In fact, 40% of companies in the UK said that their finance and IT departments worked closely together and in a recent Robert Half survey 82% of CFOs said that they were collaborating more closely than three years ago. Naturally, that led us to ask what the attraction was.
In this post, we’re looking at the benefits of close cooperation between finance and IT and how you can encourage cross-team working.
The benefits of collaboration between Finance and IT
Understanding the problems and opportunities facing our fellow workers is no longer optional.
Now more than ever teams need to work together to achieve the aims of the company because it provides real business benefits and if your company isn’t encouraging collaboration then you can bet that your competitors will be.
When the finance team is looking to implement new systems and digitise their work, having a direct line into IT means that the two disciplines can work together to ensure that the adoption process works seamlessly.
It’s important that when finance is looking to implement new tools they work with IT to leverage the specialist knowledge that they can bring to bear and also give the CIO the ‘heads-up’ that internal resources might be required for the project.
From a finance point of view, understanding the work of the IT department provides greater insight into the ROI of particular projects and just as importantly the unseen value that they add.
Understanding why server costs have increased or what the capital outlay is for a new roll-out is useful, but if the finance team can get access to that sort of information in advance it makes forecasting so much easier and more reliable.
Although finance is often seen as the gatekeeper to the cash needed to introduce products and the policemen of company expenses the truth is that finance does need to keep an eye on costs and understanding where there may be fat to be trimmed is helpful.
But of course, it isn’t all about saying ‘no’.
So often CIOs complain that they aren’t able to speak the language of finance and find making their case in business terms difficult. For IT departments greater collaboration means that they can enlist a powerful ally in the fight to get funding for important development projects and can also get advance notice of any new system developments that finance is planning.
There are so-called ‘soft’ benefits to collaboration too.
Having an open and honest two-way dialogue between the departments leads to a lot more information sharing and joint problem-solving. This fosters teamwork and helps develop a collaborative culture.
The future of the finance and IT world
In the past, there has been a good case to say that finance and IT have been walking different paths and the potential for crossover has been limited however in the future that is unlikely to be the case.
Now, more than ever, there are many aspects of business life that may initially present as being either finance or IT but that upon closer inspection are actually closely interlinked.
Blockchain is a perfect example of something that may initially have only appealed to tech-minded departments but that is now turning into joint finance and IT areas of interest.
Finance teams naturally have a vested interest in understanding the implications of digital currencies like Bitcoin and it is difficult to see how they could make the best use of distributed ledger systems without working closely with their IT professionals.
The impact of big data has meant that more information is now available to more departments around the business but how are they to make the best use of it?
The advent of analysts that sit between the two departments who can interrogate IT systems but present in understandable ways means that many companies have actually developed a new class of ‘hybrid’ finance/IT role.
Over 1 million professionals worldwide are using Rydoo.
Cloud services have revolutionized the way that companies work with user services like Rydoo being a good example of the type of application used by finance.
In addition, many companies are using cloud virtual servers and back-end solutions like AWS that have totally changed the cost base and business model of their IT.
Without a close integration between finance and IT, the chances of being able to successfully forecast the costs and risks involved are fairly remote.
Rydoo is a case in point of a system where finance needs the help and understanding of IT to make a significant difference in the way that they work with a central cloud system and distributed users connecting using mobile devices.
If finance is to make the best use of new systems like robotics and AI then it is going to need expertise along the way. The use of robotic systems for Accounts Payable processing or Artificial Intelligence as a method of automated decision making is obviously attractive to finance leaders who want to make efficiency gains but also carry with them inherent risks.
Bringing in and working closely with IT specialists means that finance can quickly understand the impact of new developments in tech and form a clear understanding of whether they will be useful or indeed pose a threat.
The interlinking of the two departments means that they form a whole that is much greater than the sum of its parts, bringing together expertise from two opposed sectors that actually compliment each other.
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Finance and IT collaboration is here to stay
It’s clear that collaboration between finance and IT delivers at the micro-level with team members working together but collaboration can also provide huge strategic benefits.
Having a joint finance/IT focus on development in technology means that potential opportunities won’t be missed and risks can be spotted early.
Hardly a day goes by without some new development that could have massive consequences for both finance and the wider company so it would appear that finance collaboration is likely to become the norm.
As our survey shows, companies are seeking to encourage collaboration and this is arguably a natural response to the increasing pace of technological development in terms of finance systems.
We confidently predict that as systems evolve we’ll see more and more collaboration between finance and IT, especially in the most forward-thinking companies.