The common perception of finance executives is that they are pragmatists who cleave to the tenet that if you can’t count it, it doesn’t count. But it may be that finance leaders take a relatively rosy view of progress in digital transformation when compared with their peers in HR and even IT itself.
Unit4’s recent State of the Digital Nation 2023 survey found that 32% of international finance senior decision-makers were significantly more confident about completing public sector digital transformation in the next 12 to 18 months. By contrast, just 17% of HR and a low 11% of respondents in IT agreed with that timescale.
Finance leaders are generally more confident than HR, who are significantly more confident than IT
Or, looking at this from another angle, about half of IT respondents (49%) said that transformation would take two to three years, compared with 42% of HR and just 19% of those working in finance.
Examined from another prism, more than half of finance leaders (55%) were confident that digital projects will be delivered within budget, compared with 41% in HR and 35% in IT. And on yet another count, finance was once again the most likely department (55%) to believe that there will be high levels of interoperability, compared with 44% in HR and 37% in IT.
Moving the goalposts
So, the big picture is consistent: finance leaders are generally more confident in IT success than HR, who in turn are significantly more confident than IT. But why the relatively high confidence level – and is it misplaced?
One possible reason is that respondents define digital transformation differently. Digital transformation is an umbrella term that provides cover for many commercial activities, from digitising products, sales and marketing through to supply chains and strategic planning.
In the public sector, it encompasses consumer self-service portals, facilities booking, procurement and much more. Finance leaders often sign off IT projects as individual entities that have a beginning, a middle and an end. However, the very premise of digital transformation is that it is an ongoing cycle of multiple transformational exercises.
All progressive organisations should be perpetually seeking to transform, but technology never stops evolving, so there is always an element of challenge in talking consistently about projects and, perhaps, an element of moving the goalposts, with different people defining projects differently.
Finance will always have an excellent grip on the three Rs of risks, rewards and return on investment
Changing one service will often have a domino effect on another related one, and chief information officers (CIOs) understand the vagaries of integration and shared data models in a way that few CFOs will. Smart CIOs know that they need to be permanently tuned into technology change and poised to go further in automating and digitising, hence the scepticism in viewing digital transformation as ever being ‘complete’. Indeed, CIOs will often argue that transformation is a journey or a stream of activities and can therefore never be viewed as such.
As for the questions of confidence in meeting project budgets, finance will always have an excellent grip on the three Rs of risks, rewards and return on investment. IT leaders know that the innate complexity of projects can lead to overruns that impact costs. Similarly, on the question of interoperability, CIOs and chief technology officers understand that complex webs of dependencies mean that integration and interoperability can be tough to achieve. This in turn can hurt availability and performance, leading to slowness, reliability issues and data silos.
Consistent vision
The different interpretations of decision-makers are interesting and somewhat troubling: can anything be done to forge more consistency of vision? Yes, it can, and the most efficient organisations already benefit from executive alignment and shared strategies where CIOs work closely with their counterparts in finance, human resources, marketing and revenue.
For those who can align finance and IT, the rewards are potentially large
Digital technologies are increasingly central to the running of businesses and so it makes sense for IT leaders to work closely with peers. Some even go so far as to work ‘two in a box’ on projects, and CIOs know that they have to get better at being storytellers, explaining the impacts of technologies in business language rather than jargon and three-letter acronyms.
For those who can align finance and IT, the rewards are potentially large. By taking advantage of real-time data analysis and IT financial planning technology, CFOs stand to become better at assessing risks, anticipating market opportunities and appeasing boards, watchdogs and regulators. Chargeback programmes can help leaders to better understand the importance of IT investment and the costs of their usage models.
IT is an unusual department in that it can be difficult to understand, costly, constantly changing and in many ways still maturing. But then finance isn’t an easy practice for non-specialists to understand either, and of course it has its own lexicon and a seemingly never-ending regulatory and legal framework. A CIO is unlikely to become a finance expert capable of filing accounts or explaining an end-of-quarter report to an analyst, just as a CFO will rarely be in a position to deploy a data centre or orchestrate a cloud computing policy.
But the two areas frequently overlap in matters such as compliance and risk, for example. That’s why it’s critical CIOs and CFOs work together to understand respective opportunities and obstacles and how they define their terms. Whether it’s a regular lunch or a weekly coffee, the opportunity is there to foster mutual understanding at a time when digital is defining the future of so many organisations.
