Software, Tech Upgrades & Your CFO: What’s At Stake and How to Make the Right DecisionSep 6, 2023
Technology is often a major factor driving business success. It can be a powerful tool, but it’s also an expensive, complex proposition, so CFOs have to weigh the costs and benefits of tech investments carefully; as ever, they’ll see things from a unique perspective. That’s why it’s important for business and tech leaders to have a solid understanding of the CFO’s role when making large software and technology decision-making and how to bring them into the process.
Overview of the CFO’s Role in Tech Decision Making
CFOs are ultimately responsible for the strategic financial functions of the company, so when it comes to tech investments they’ll be valuable in considering costs and investments as well as hidden or less obvious costs. They are responsible for ensuring that the company is getting the most bang for its buck when it comes to technology and that the investments are aligned with its overall goals. This means that CFOs need to understand the technology itself, as well as the potential costs and benefits of any investments. Responsibility, then, is two-sided. Leaders should ensure the CFO is in the room when considering and deciding on things like ERP or CRM installations or migrations, major security upgrades, or even hardware upgrades. CFOs, on the other hand, have to understand business technologies and their use cases well enough to be discerning and opinionated in the process.
Tech leaders, which can include vendors and their sales teams, must explain the potential value of the investment and how it will help the company achieve its goals. CFOs are looking for the data that will help them make the best decision, so it’s important that tech leaders present the most accurate data possible. This means that tech leaders should be prepared to answer any questions that the CFO might have about the proposed technology, as well as discuss potential risks and challenges.
Major Tech Change Decisions
There are a number of major tech decisions that a CFO might have to make. Two of the most common are ERP migrations and CRM implementations. Both of these decisions can have a huge impact on the company’s bottom line, so it’s important that the CFO understands the potential risks and rewards of these investments.
ERP (Enterprise Resource Planning) migrations are a major undertaking for any company. There are a number of potential challenges that come with these migrations, including potential disruption of existing operations, compatibility issues, and the need to retrain staff. Additionally, the cost of the migration itself can be significant.
However, ERP migrations can also be a great opportunity. Companies that migrate to an ERP system can see increased efficiency, streamlined operations, and improved data analysis.
CRM (Customer Relationship Management) implementations are also a major undertaking for companies, and they have similar challenges and opportunities to ERP migrations. Companies need to consider potential compatibility issues, as well as the potential disruption of existing operations. Additionally, the cost of the implementation can be significant.
However, CRM implementations can also be a great opportunity. Companies implementing a CRM system can often see improvements in customer service, increased customer loyalty, and improved data analysis. Customer retention can improve and sales velocity can be increased.
How to Make the Right Decision
Making the right tech decision can be a complex process, but there are some steps that tech leaders can take to ensure that the CFO has the information they need to make the best decision possible.
Gathering the Right Data
The first step is to gather the right data. Leaders need to make sure that they have a clear understanding of the potential costs and benefits of the proposed investment. This means gathering data on the cost of the investment, as well as potential risks and rewards. Additionally, leaders should look at potential alternatives and gather data on those options.
Identifying the Right Stakeholders
Once the data has been gathered, it’s important to identify the right stakeholders. This means bringing in people from various departments who can provide different perspectives on the proposed investment. This can help ensure the CFO has all the information they need to help make the best decision possible. It’s important here to be mindful that the end-user and the decision-makers are often not the same people, and each of their priorities should be considered. Executives might like the idea of spending less on an option that users will find more complicated or time-consuming – thus eliminating “savings” for increased labor costs or even added inefficiencies.
Invoking the Right Process
Finally, it’s important to invoke the right process. This means having a process in place that ensures that the decision is made in a timely manner and that all stakeholders have a chance to provide input. This process should be designed to ensure that the decision is made in a thoughtful and deliberate manner. And remember, consensus isn’t necessarily the goal – commitment is. You’re unlikely to find a solution that pleases everybody in all ways, but the team should ultimately commit to a way forward with confidence.
Making the right technology decision is a complex process, but it’s one that CFOs are uniquely suited to tackle with the right insight and information. Tech and team leaders should understand the CFO’s role in tech decision-making and how to bring them into the process. They should also be prepared to provide the CFO with the necessary data to help make the best decision possible. This includes gathering the right data, identifying stakeholders, and invoking the right process.
Making the right tech decision is crucial for any company, and CFOs play a major role in this process. By understanding the CFO’s role in tech decision-making and how to bring them into the process, leaders can ensure that their companies are making the best decisions possible.