Collaborate with IT to build profits say UK finance directors
The gulf between the finance and IT functions is closing rapidly as important new IT initiatives such as mobile, ecommerce and big data are introduced, finds new research1 with UK finance directors from leading recruitment specialist Robert Half Management Resources. Over half (53%) of UK FDs surveyed said that collaboration between finance and IT had increased in their organisations compared to three years ago.
On a regional basis, Midlands-based executives have seen the greatest collaboration with more than six in 10 (62%) citing increased alliance followed by 58% in the South West and Wales. Executives in the North and Scotland have been the least collaborative with less than four in 10 (38%) indicating a closer partnership compared to three years ago.
The majority (96%) of UK FDs take a substantial role in influencing decisions about IT investments and initiatives. Only 4% said they only give budget approval or have no involvement at all. More than three quarters (77%) of FDs said they are either primary decision makers (37%) or secondary decision makers (40%). The remainder said that they play a consultative role in IT investments.
FDs also have a greater influence over strategy and business operations within their organisations, with almost half (47%) reporting that they own this responsibility, compared to 24% who indicate that IT had the biggest influence. Almost a third (30%) said that finance and IT wielded equal influence over strategy and business operations.
Half (50%) of FDs report that greater collaboration between finance and IT is primarily driven by the need to share responsibility for financial system implementation, while 41% said that the biggest factor behind collaboration is that IT report directly into the head of finance. The rise of mobile technology and ecommerce was cited by 35% of FDs while managing big data (33%) and business partnering strategy (28%) were also important factors.
Phil Sheridan, Managing Director, Robert Half Management Resources said: “Technology plays a significant role in a company’s overall strategy as it drives efficiency and bottom line savings, but also as it is a significant expenditure for the business. Finance leaders are therefore taking a more hands-on approach to technology decision making, leveraging financial analytics and scrutiny to deliver initiatives across the business. As such, there is a strong requirement for finance specialists to understand the impact of technology on their business and to work closely with IT to implement the right programmes. Many firms are opting to engage interim IT finance professionals and business partners with strong commercial acumen and technology expertise to manage critical initiatives.”
Successful collaboration has a massive impact on profitability, efficiency and costs, say UK FDs. Over half (54%) said that collaboration between finance and IT had led to increased profitability, while 48% said it had led to improved efficiencies and 41% said it led to lower business costs. Importantly, 37% of FDs said that collaboration led to a reduction in errors, while a third (33%) said it reduced risk. Almost one in five (14%) reported up-skilling for finance and IT teams as a consequence of better collaborative working.
When it comes to identifying factors for fostering collaboration between finance and IT, 28% of FDs believe that mutual respect is important along with technical understanding of competencies (26%) and regular frequency of communications (23%). Business partnering was identified as an important factor by 14% of FDs.