The Corporate “Odd Couple” Can Drive an Organization’s Operational Success

April 17, 2008

The old clichés about the bean-counter versus the gadget guru are still hard to shake. Yet, today’s CIOs and CFOs can find common ground for productive collaboration by embracing technologies like performance management.

For many business executives, it’s a conventional boardroom image. The CIO pleads his case for some over-acronymed technology that promises to transform something while the pinstriped CFO, pores over spreadsheets, slowly shaking his or her head in disapproval. They never seem to agree on anything meaningful.

Is the cliché really true? Are today’s CIO and the CFO a little too much like Felix Unger and Oscar Madison — Neil Simon’s legendary Odd Couple? For forward-thinking enterprises, the corporate variation on those stereotypical images — the expense-obsessed bean counter and the gadget-evangelizing guy with the pocket-protector — are about as relevant as an old floppy diskette of VisiCalc.

The good news is that more than ever before, information technology and finance are ideally suited to cooperate and collaborate. In recent years, businesses have garnered a more accurate assessment of what technology is actually needed to drive business goals.

IT is no longer the black box; today’s generation of financial professionals — indeed, the vast majority of all enterprise employees — are far more comfortable with, even fluent in, a wide range of technologies. That’s fostered a greater transparency and trust between IT and virtually all areas of the business. There’s a greater appreciation of the IT discipline and, of course, far greater expectations as well.

Viewed properly, IT is not simply a utility service — it’s a strategic resource. The question becomes: What’s the best way to leverage the strategic business opportunities that effective IT/finance collaboration can provide?

Performance Management: Forum for Finance/IT Collaboration

Today, IT and finance increasingly share common goals and a unified vision — for both pragmatic and strategic reasons. From a pragmatic perspective, the CIO and the CFO are virtually joined at the hip with, thanks to an increasingly strict environment for corporate governance that has led to new levels of collaboration to ensure documented compliance with explicit regulatory frameworks.

But, from the more important strategic perspective, IT and finance face an unprecedented opportunity to work together to drive their business forward in bold and innovative ways by embracing performance management as an enterprise-wide discipline.

Until recently, performance management had been viewed merely as a compartmentalized function for most organizations. The absence of a true partnership between IT and finance has led to shortcomings in performance management goals.

However, thanks to the “shotgun marriage” arising from Sarbanes-Oxley Act compliance and other regulatory requirements, IT and finance are setting aside their historical differences and embracing their complementary skills and strengths — all to improve the quality of financial data and integrate it with operational data. This ensures that both parties appropriately align with one another and use that information to plan for future risk through better financial and operational forecasting. In short, they’re pledging to get the right information to the right people at the right time.

Four Breakthroughs that Enhance the Finance/IT Relationship

Performance management is best described as a continuum that begins with basic automation of specific business functions and evolves over time into a transformation of the broader business. The key is to achieve early gains — and, to be honest, those typically happen in the finance area — and spread those across the organization.

That requires a unique relationship between IT and finance with progressive organizations embracing the business value of information. Let’s look at the breakthrough phases that characterize how this collaboration can create effective performance management.

Eliminate the Baggage to Resolve Pains for Immediate Gain. In almost any financial organization, there are areas where numbers never quite seem to align or reconcile, where mysterious spreadsheets and plugged numbers are needed to keep things on track. They’re often historical artifacts that roll forward because, well, they work for now. These areas are ideal starting points for performance management — opportunities to resolve chronic pain points and achieve immediate gains.

Spreadsheets in particular, while valuable for personal productivity, were not designed for and cannot cope with critical business processes on an enterprise scale. Spreadsheets are inherently disconnected. They create a host of obstacles for any finance organization trying to reduce process cycle times, increase the reliability of forecasts, dedicate staff time to added-value analysis instead of data collection or simply get a better idea of what is happening within the organization.

Not surprisingly, of course, financial people are often deeply reluctant to let go of those spreadsheets that, for all their drawbacks, have served their limited purposes. When IT and finance find common ground, there’s a greater likelihood to let go of the old ways and embrace new technologies to automate some of the fundamentals.

Performance management can break through the single-user spreadsheets and silos. It can reduce the close, consolidate and report cycle and provide the transparency needed for sustained compliance. It eliminates the disconnected pockets of data.

With dramatically fewer versioning and control errors, which are so common to spreadsheets, you increase the reliability of information on actuals and forecasts. You deliver critical financial reports faster, with less manual input. You save time and cost, and drive greater accountability.

Open to Change. So, you’ve automated some key fundamental processes. Why is that a noteworthy milestone? Well, once you have those basic processes automated, you’re in a better position to drive best practices. Your people are freer to spend time on activities that truly add business value.

The overarching value of tactical automation is the liberating opportunity to focus on strategic gains. But that only happens to those bold enough to reexamine their processes and embrace new techniques to optimize them.

Expand Your Horizons. Here’s where the IT/finance collaboration really kicks in for the entire enterprise. By acting as role models for the organization, you’re in a far stronger position to share those benefits with other departments, units and divisions and take performance management across the corporation.

Replicating the IT/finance partnership enables you to achieve best practices in planning and performance management throughout the organization and close the loop between operational planning and financial results.

Make the Connection — Planning and Operations. The ultimate goal of performance management is to coordinate and align your plans, activities and resources. That enables you to forge reliable and continuous connections between corporate strategy, financial management and operational execution. It also helps identify critical performance gaps with enough lead time to assess alternatives and respond appropriately. You are better able to focus on the value-driving activities necessary to achieve your corporate strategy. The result is more effective, more consistent execution.

Today, the connection is no longer viewed as a necessary evil, rather, forward-looking enterprises are learning that it can result in strategic investments, facilitated by performance management.

To make this a reality, IT and finance must go well beyond the water cooler chat to create meaning and a singular data set out of disparate financial and operational data. That moves the relationship from “odd couple” to “ideal match.”

Doug Barton is the Vice President of Product Marketing for Cognos, an IBM Company. Barton also is the author of For the CFO, Even Good Surprises are Bad.

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