In this COVID-19 pandemic era, every CFO out there is scrutinizing his or her company's spend. Fortunately, data's role has exploded. To properly assess a company's financial position, a CFO must effectively access data. The key is narrowing down a large amount of information to action items, which can be difficult.

IT has evolved from being a background cost center, generated reports used to close the books, to a place where data is housed, manipulated and made available, which is key to running a business.

IT is no longer in the background. It is capturing vital data and providing a strategic voice. When a CFO captures and analyzes data, he or she can improve their strategy. CFOs and CIOs are collaborating more than ever as IT formats data and provides insight into what might be most helpful to finance.

COVID-19 Challenges

Most CFOs are unaware of his or her company's specific technological nuances. As the pandemic brings businesses unprecedented financial challenges and pressures, the CIO can give the CFO perspective on which tech costs are needed and which can be done without.

Buying equipment is a cash outlay, and companies are currently laser-focused on cash flow and expenses. Some expenditures will have to be delayed as cash is prioritized away from capital expenses. Many CFOs may be unaware of which IT costs to reduce without a collaborative conversation with the CIO.

One consistent strategy I employ with our CIO: a regularly scheduled, detailed review of all ad hoc expenses across the company. Together, we look for technology items that should be aggregated, or that don't comply with our standards. This process requires CIO input and experience.

Relying on each other

It can be very difficult for CFOs to keep up with IT. IT evolves so rapidly and requires specialty knowledge; generalists are left in the dust when it comes to technological progress. A CFO can measure costs, but determining capabilities, and staying ahead of tech trends, requires the CIO.

At the same time, technology often offers glitzy new products, and it's imperative that IT professionals stay focused on what type of capital is available, what they want to spend it on, and how their values are aligned with the business.

CIO collaboration helps validate the financials of development projects. A working knowledge of the ever-changing standards in technology protects financial projections and budgets.

CFOs focus on maintaining activity without increasing expenses. Gartner has reported that third party maintenance is less expensive than what OEMS have to offer, and the service is just as good. If anybody came to you and demonstrated, "You’re paying $100,000 for this service. I can do it for $50,000-$60,000 and I'm going to do it better," any CFO would take that deal.

But it requires CIO scrutiny and expertise.

IT’s unique contributions

In my collaborations with IT leaders, I have learned IT is uniquely positioned to scan the entire company for technology-enabled improvements: revenue opportunities, productivity increases, and cost savings.

When the CIO and the CFO work collaboratively to find and implement these improvements, the company becomes more effective than when they take a siloed approach on a per-department basis.

The COVID-19 pandemic presents an opportunity for identifying improvements. As people are suddenly forced into working in a different model, traditional ways of business can change form. A CFO-CIO collaboration can present opportunities in office utilization, software purchases, and greater hardware deployment, just to name a few.

While hardware and software expenses are relatively easy to monitor and measure against the company metrics, the implementation of IT projects is a key area for CFO-CIO collaboration.

Every project brought to IT can have cost structures that include outside purchases as well as internal labor. Projects need to bring value to the company, and the calculation of that value, perhaps in the form of ROI, requires the CIO and CFO to jointly calculate the value accurately, and measure the results once the project is in place.

I consult our Park Place CIO, with an ongoing process analysis team, to look for cost-reduction opportunities that don’t impact customer satisfaction. This input is key to ensuring a potential financial decision that may benefit the company doesn’t touch customer service.

Additionally, CFOs and CIOs together can protect their business revenues and their business-critical IT by "sweating" their IT assets for longer through value-added life-cycle support services. Maximizing payback and ROI on hardware infrastructure can also yield financial benefits for the longer term.

We all hope the pandemic passes quickly, but the long-term necessity of CFO-CIO collaboration will continue well beyond the current crisis, and will remain an ongoing part of any business’s evolution, strategy and long-term health.