The following is a guest article authored by Tony Tricarichi, Chief Financial Officer of Park Place Technologies. The views expressed in this article are solely those of the author.

In the era of the COVID-19 pandemic, every CFO is rigorously scrutinizing company expenditures. Fortunately, the role of data has dramatically expanded. To accurately assess a company's financial position, CFOs must efficiently access data. The key lies in distilling vast amounts of information into actionable items, which is no easy task.

IT has evolved from a back-office cost center of the past (used solely for generating closing reports) into the core hub for data storage, processing, and sharing, which is vital to business operations.

IT is no longer behind the scenes. It is capturing critical data and providing a strategic voice. When CFOs access and analyze data, they can optimize their strategies. As IT formats data and gains insights into which information is most useful for finance, collaboration between CFOs and CIOs is closer than ever.

Challenges brought by the pandemic

Most CFOs do not understand the specific technical details of their companies. As the pandemic brings unprecedented financial challenges and pressures to businesses, CIOs can help CFOs determine which technology costs are necessary and which can be cut.

Purchasing equipment is a cash expenditure, and companies are currently highly focused on cash flow and expenses. Some expenditures must be deferred because cash takes priority over capital spending. Without collaborative communication with the CIO, many CFOs may not know which IT costs to cut.

The strategy I have consistently used with our CIO is to conduct detailed reviews of all temporary expenditures on a regular basis. Together, we look for technology projects that should be consolidated or that do not meet our standards. This process requires the CIO's input and experience.

Interdependence

It is difficult for CFOs to keep pace with the evolution of IT. IT advances rapidly and requires specialized expertise; generalists often fall behind in the face of technological progress. CFOs can measure costs, but determining technical capabilities and staying ahead of technology trends requires the CIO's involvement.

Meanwhile, the technology field often sees flashy new products emerge, and IT professionals must focus on the types of capital available, where they want to invest, and how their values align with the business.

The CIO's collaboration helps validate the financial viability of development projects. A deep understanding of evolving technology standards can protect financial forecasts and budgets.

CFOs focus on maintaining business activities without increasing expenditures. Gartner has reported that third-party maintenance is cheaper than services offered by OEMs, with equally good service quality. If someone shows you: "You pay $100,000 for this service, and I can do it for $50,000 to $60,000, and do it better," any CFO would accept that proposal.

But this requires the CIO's rigorous review and expertise.

IT's unique contribution

In working with IT leaders, I have learned that IT has a unique advantage in scanning the entire company to find technology-driven improvement opportunities: including revenue growth, productivity gains, and cost savings.

When CIOs and CFOs work together to discover and implement these improvements, the company is more efficient than when departments operate in silos.

The COVID-19 pandemic provides an opportunity to identify improvements. When people are suddenly forced to adopt different work patterns, traditional ways of doing business can change. CFO-CIO collaboration can bring opportunities in office space utilization, software procurement, and hardware deployment, to name a few.

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

Every project submitted to IT may include cost structures such as external procurement and internal labor. Projects need to create value for the company, and calculating that value (for example, in the form of ROI) requires both the CIO and CFO to accurately assess it and measure results after the project is implemented.

I consult our CIO at Park Place and leverage an ongoing process analysis team to find cost reduction opportunities that do not affect customer satisfaction. This investment is crucial to ensuring that financial decisions that may benefit the company do not compromise customer service.

Additionally, CFOs and CIOs can work together to extend the useful life of IT assets through value-added lifecycle support services, thereby protecting business revenue and critical IT systems. Maximizing the return on investment and ROI of hardware infrastructure also brings long-term financial benefits.

We all hope the pandemic will pass soon, but the long-term necessity of CFO-CIO collaboration will far outlast the current crisis and will continue to be part of the evolution, strategy, and long-term health of any enterprise.