In this blog, we discuss the collaboration between the CFO and CIO for successful Digital Management. We highlight the complexity of implementing Electronic Data Interchange and the necessity of effective communication and collaboration with internal and external stakeholders.

Research from Gartner indicates that to ensure successful investment outcomes, strong collaboration between the CFO and CIO is crucial. The CFO and CIO must define and communicate the mission and vision of the digital initiative within the organization, and then focus on key execution elements.

Harbe emphhasizes this conclusion, and practical experience shows that a solid implementation plan for an integration issue addresses this. Harbe has developed a methodology based on an Agile Transformation matrix, incorporating the right resources, timeline, project charter, and costs, which contributes to the successful rollout of the implementation plan.

Additionally, Gartner advises that the executive leadership team and often the board of directors must be aligned with the CFO and CIO to ensure that expectations regarding digital capabilities and outcomes are well-defined. Harbe’s methodology aligns organizational priorities with business objectives, ensuring that implementation is not disrupted.

CFOs report that digital expenditures do not meet expectations

According to Gartner’s “The CFO’s Playbook for Improving Digital ROI: Increase CFO-CIO alignment for enterprise-wide digital success,” the acceleration of digitization has increased the pressure on CFOs to ensure that technology expenditures deliver value. However, the research reveals that digital investments underperform, and the study identifies two main reasons:

• Poor or insufficient alignment between the CFO and CIO
• Lack of organizational transparency about digital performance and accountability

Here, we outline how organizations achieve success with digital investments by cultivating a shared vision for better digital outcomes. Harbe’s Transformation matrix provides a roadmap for improving alignment between the CFO and CIO—and the digital return on investment (ROI).

The same research among CFOs and CIOs shows that strong collaboration between these two functions is crucial for digital success. Although 71% of CFOs and 77% of CIOs consider themselves responsible, this lack of collaboration results in only 36% being fully aware of digital innovation investments within the organization. Breaking down these silos and fostering strong CFO-CIO collaboration is essential to fully realize the potential of digital investments.

Discover key areas of alignment

The challenge: CFOs and CIOs are often only aware of their alignment on a few objectives but miss the bigger picture.

Identify and align key objectives: The previously mentioned challenge can be addressed by mapping shared objectives, starting with understanding priorities, motivations, and goals. Harbe’s Agile Transformation matrix provides tools for this.

In summary:

• Clear alignment: Where CIO and IT objectives support the CFO’s financial objectives to achieve strategic priorities.
• Unarticulated alignment: Where the CFO and CIO need to discover or develop relationships between financial and IT objectives that do not clearly align.
• Driving results: Measurable objectives based on defined priorities and activities.

Redefine expectations of digital investments

Challenge: As reported in the research, it is often difficult to assess the relationship between digital investments and enterprise value. Only 35% of CFOs believe their teams can accurately estimate the value creation potential of digital investments.

Collaborations: Collaborative CFOs and CIOs are 33% more likely to redefine expectations for the success of digital investments.

Assess the impact of digital investments on business value from two perspectives:

• Digital skills: The digital competencies deployed within the organization are sufficient for the intended solution.
• Digital economic outcomes: The impact of digital investments on the business model and value proposition.

To fully realize the potential of digital investments and optimize Supply Chain performance, companies need to invest in the right technologies and partnerships. This helps address:

• Inefficiency: Without effective B2B integration, processes remain manual and time-consuming, leading to higher operational costs.
• Lack of collaboration: Not onboarding suppliers and not obtaining accurate forecasting data from customers can reduce the effectiveness of automation solutions.
• Unexpected problems: When B2B integration fails, the consequences can be severe, such as disruptions in the Supply Chain and missed business opportunities.
• Underperformance: Companies that do not invest in advanced IT solutions risk their digital investments not delivering the expected results, leading to stakeholder disappointment and missed growth opportunities.

As CFOs prepare their organizations for significant productivity gains through digital expenditures, they can rely on Harbe for expert advice and guidance to improve digital ROI for integrations. This enables companies to optimize their business strategy for integration issues.