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CIOs and CFOs: the innovation dream team
IT and ERP transformation: picking the smart path
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CIOs and CFOs: the innovation dream team
How can the twinned goals of CFOs and CIOs combine to improve a company’s outlook?
The pragmatism of a CFO, driven by numbers and stats. The vision of a CIO, pioneering change through technological innovation. In harmony, they accelerate business growth and profitability. In discord, they lead to stagnancy. So, the multi-million-pound question: How can they form a tight-knit dream team to lead the business to unmatched success?
All good things start with good communication
As decision-making committees grow larger and more complex, and with the CIO increasingly reporting to the CFO in many firms, a common set of goals and language between executives is essential for making the right decisions.
A recent Censuswide survey of more than 1,500 CFOs and CIOs in the EMEA region revealed that most believe their partnership has strengthened. However, there is still room for improvement in communication given 85% of CFOs would like their CIO counterpart to be more business savvy and 87% of CIOs would like their CFO counterpart to be more tech savvy.
“If those two functions aren't aligned, you're not going to create the synergy that [they] ought to be able to drive between the two of them simultaneously,” says Mark Freebairn, partner and head of CFO and board practice at executive search firm Odgers Berndtson.
Marrying the pragmatic realism of a CFO with the analytical innovation of a CIO can be challenging – but it’s not impossible. “The CIO function has had to evolve, not only the commercial skills to read the music in the organisation, but to work in lockstep with the CFO around value realisation,” says Matt Cockbill, partner in the CIO and technology officers practice at Odgers Berndtson.
Aligned priorities can lead to growth and competitive advantage
Developing synergy and building out collective targets can be a game-changer, unlocking benefits in several areas. By aligning both perspectives and priorities, CIOs and CFOs can make informed decisions about technology investments, ensuring that the organisation’s tech stack is optimised for maximum efficiency and cost-effectiveness.
The combination of both executives’ expertise makes it possible to improve how a business operates. Taking the CIO’s expertise in data management and analytics, then combining it with the CFO’s understanding of financial metrics and key performance indicators, can help organisations leverage real-time data insights to drive strategic decision-making and identify opportunities for growth and optimisation. If CIOs and CFOs can align their priorities, then this can play a significant role in helping an organisation stay ahead of the competition.
But it’s not just how your business operates in comparison to others that can be improved with CIOs and CFOs working in lockstep. By collaborating on process improvements and digital transformation initiatives, CIOs and CFOs can streamline operations, reduce inefficiencies and enhance the overall productivity and effectiveness of their business. “IT and finance are incredibly natural bedfellows in that regard, because they were designed up to improve the creation of the infrastructure that overlays a business’s ability to manage itself,” says Freebairn.
Collaborate to innovate
In today's world, data is the new currency. To take advantage of the latest technologies such as AI/ML and predictive analytics that can help lower costs and create unmatched efficiencies for the business, learning machines must be fed information to learn and evolve from. CIOs and CFOs have a critical role to play in protecting their data sources (as well as maintaining the quality of their data) and directing investments to fund the next generation of innovation. Collaboration between the two functions can make it happen without disrupting the business.
An example of how to enable innovation without disruption is the preservation of mission-critical software such as enterprise resource planning systems (ERPs) – tools that are vital to a company’s management of its core business processes. These hold an unbelievable amount of data that can be used to fuel innovation, yet many CIOs are being pressured by software vendors to move on to the next release and leave behind untapped resources.
Instead CIOs and CFOs must come together to assess whether an upgrade, migration or replatforming will yield the ROI they need for the business. Doing so can accelerate their timeline for innovation while being fiscally savvy.
By focussing on communication, alignment and collaboration, CFOs and CIOs can create a power dynamic from which every business and industry can benefit.
Commercial Feature
Composable ERP: the right path to business success
IT transformation should be conducted at a pace that suits the business rather than a vendor
Duncan Jefferies
In association with
Duncan Jefferies
In association with
IT transformation can unlock the efficient workflows, robust security and agile business models crucial for success in today's competitive landscape. It enables data to flow freely throughout an organisation, powering the insights and tools needed to deliver innovative products and services.
Each business must follow its own smart path to a more efficient, data-driven and profitable future. This is far from easy. Indeed, contrary to the claims of some vendors, you cannot simply rip-and-replace your way to a more effective IT environment.
“Organisations may have hundreds of software products, and there is simply too much risk and not enough time, money, labour or ROI to rip and replace or continuously upgrade all of the systems," says Seth Ravin, CEO of Rimini Street, which provides third-party support for enterprise applications like SAP and Oracle. “CIOs and CFOs need to allocate more budget to the kind of innovation that will enhance competitive advantage in a fiercely competitive world. That requires an approach that extends the lifespan of ERP and other enterprise software platforms.”
Implementing a composable ERP strategy can extend the lifespan of key platforms by allowing ‘innovation around the edges’. Such an approach can maintain a firm’s existing ERP, which is stable, reliable and customised to the business, while also enabling teams to further innovate by adopting artificial intelligence (AI), machine learning (ML) or other technology solutions.
Extending the lifespan of ERP systems
For many organisations, layering best-fit solutions on top of existing, robust enterprise systems could be the fastest route to a more flexible and scalable IT infrastructure. Rather than spending a fortune to replace ERP solutions that work perfectly well, organisations can extend their lifespan and turn them into a profit centre for innovation elsewhere.
“The average lifespan for an ERP product release before the vendor pressures a licensee for a major upgrade is just too short for most organisations – and especially for governments,” says Ravin. “Major software upgrades or migrations occur almost every 3 to 5 years, but the reality is that Rimini Street believes a core ERP platform can have a useful life of 30 years or potentially longer if it is supported with updates to tax, legal and regulatory changes, resolutions for issues that arise and solutions for interoperability and security.”
Extending their lifespan with third-party support maximises the return on investment for these systems. It also means organisations won’t be forced to undertake a costly, time-consuming migration before it’s necessary. In other words, it frees them from vendor pressure to upgrade and allows them to transform their systems at a pace and cost that’s right for them.
Even when freed from a vendor's upgrade cycle, most CIOs will still face the pressure of transforming IT with constrained financial, people and time resources. They may therefore struggle to convince their CFO that the solution they have in mind will lead to real business benefits. This might be because the CFO doesn’t have the technical skills to evaluate IT investments in the same level of detail as the CIO. Or perhaps the CFO feels that previous upgrades failed to deliver a decent ROI or didn’t lead to any significant business benefits.
This can create tension that a partner like Rimini Street can help the organisation resolve. “We help them to really understand where to spend and where to cut…[so] helping them figure out where to invest the limited resources of time, people and money in their IT infrastructure,” says Ravin.
Navigating the hype around new technologies
This help includes cutting through the hype around new technologies, which can blind people to their real long-term value. Indeed, when it comes to buzzy technologies, organisations are often “desperate to differentiate themselves and get a head start on competitors,” says Ravin.
It's a movie we've seen before, he says, pointing to the number of businesses that rushed to adopt public cloud services and multi-cloud environments – a growing number of which are now finding them too expensive and shifting back toward on-premises or hybrid setups.
This rush to the cloud – and more recently the rush to integrate Gen AI into the business – stems in part from the pressure CIOs are under to adopt new technologies, all while there's still uncertainty about their long-term impact on the business.
“Being a CIO is one of the hardest jobs in the world,” says Ravin. “Everyone's asking you to predict what technology is going to make an impact, and you're having to make investments [based on what things might look like] ten or fifteen years from now.”
Innovating on your own terms
Whether with AI or other technologies, it’s important that organisations are free to innovate on their own terms. For example, Rimini Street's support services helped enable a telco firm to postpone a major ERP upgrade and invest the savings in 5G services, which delivered more value for their customers. “We're focused on the results – what's the best way to get there, what software will work best for you,” says Ravin.
Despite the all-too-common desire for rapid change, he emphasises that true IT transformation is about playing the long game. "Discipline is the name of the game in IT, because you can easily go down a hundred different roads every time something new comes out."
Rather than rushing into large investments, organisations should create an innovation team to experiment with new technologies and assess their true business value before full deployment. Some might see this as the CIO adopting new technology too slowly. “But actually, they're being methodical and financially responsible about it,” says Ravin.
Ultimately, IT transformation can unlock tremendous benefits, in customer insights, agility and future preparedness. But it can best do so if organisations have the freedom to transform their IT systems when it's right for them, rather than when it suits a vendor’s agenda and pocketbook.
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For more information please visit riministreet.com
Four ways to improve your adoption of AI
The AI road is paved with potential benefits – but also includes major pitfalls you need to avoid
The AI revolution is here, with eye-catching figures about the impact that AI can have on improving the bottom line of businesses. But for all the promises of AI, the process of putting it into action is full of twists, turns – and potentially serious pitfalls.
This places IT leaders in a quandary. If their AI investment is successful, they will be celebrated as heroes of innovation. But if the investment goes wrong, the impact to the business may not be easily reparable; in fact, it could lead to significant loss of capital and put them behind competitors.
So, what should IT leaders and executives know before embarking on an AI journey, and how can they set themselves up for AI success?
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Start small, gain big
It’s no use enacting a broad series of changes within your organisation if they’re going to lose their impact and be smothered by organisational challenges. Implementing AI for AI’s sake isn’t useful. “Inaction is not an option, but directionless adoption is likely to cause more problems than solutions,“ says Duncan Kerr, presales architect at Infinity Group.
It can be difficult to decide what to do given the level of competition – and the hype around AI. Sometimes vendors may pressure your organisation to undertake hefty costs and actions to gain access to a few AI features. But this could also be achieved by taking on a flexible ERP approach, resulting in potentially faster results in a more cost-effective way.
Start with a specific use case for AI for the business. Bring the right team together to understand how to achieve this with minimal disruption to the business. By considering the business’s appetite for change and managing expectations, IT leaders can gain trust from stakeholders as they continue to stack up wins.
“Starting small, testing use cases, developing proofs of concept and failing fast will accelerate innovation,” advises Kerr.
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Respect, preserve and celebrate data
Every organisation sits on an unbelievable amount of data, most of which is unique to the business. Customised systems deliver customised data, offering deep insights of competitive differentiation.
“Data is the lifeblood of AI, and effective ERP systems centralise data and eliminate data duplication,” says Kerr. So, why do software vendors continue to sell the idea of leaving behind all your data in favour of a few new AI features that are only available in a new system?
“The pressure from vendors and the big four to undertake costly migrations and re-implementations is undeniable,” says Iffi Wahla, CEO and co-founder of global hiring platform Edge, which has implemented AI in its processes. “While these off-the-shelf solutions are seen as quick fixes, they may not always be aligned with the broader strategic AI goals of a company.”
Industry analysts suggest a composable ERP strategy, which can allow organisations to adopt the latest innovations while preserving their hard-earned data.
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Invest in data cleanliness
A common saying in the world of AI is “garbage in, garbage out.” It means that any AI solution is only ever going to be as good as the data it’s trained on. To prevent devastating outcomes, you must prioritise activities to clean the data.
“The value and effectiveness of any gains relies on the availability of high-quality data,” says Kerr.
Even after successful organising of the data, a watchful eye must be kept on it at all times. When it comes to data, it should very much be a case of don’t run before you can walk, he advises
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Train for speed, scale and scope
Undertaking an AI journey that involves such a fundamental shift needs to be done with the right support. It requires agreements not just with the CFO but with HR, as many of the new technologies will require a mix of new skills and deep knowledge of existing systems for stability.
Data that lives inside these systems is critical to AI success - it needs to be managed and the processes documented. Upskilling IT staff and adding the right mix of new talent is strongly recommended, while it is also a smart strategy to turn to external partners that can help speed up, scale and fill gaps.
“Choosing the right technology partner is crucial when it comes to adopting advanced solutions,” says Kerr. “Filtering through third-party providers by looking at how well they understand the context of their pain points, as well as their core competencies, is important.”
Utilising AI to overcome industry challenges
Adding AI to existing ERP systems could help manufacturers, retailers and energy firms overcome some fundamental business challenges
ERP software is often described as an organisation’s central nervous system, connecting core processes such as finance, sales and supply chain. So, what happens when you supercharge this nervous system by adding generative AI capabilities through a composable, enterprise-level AI strategy? Could it help firms in key industries like manufacturing, retail and energy tackle big business challenges?
And, perhaps most importantly: how can IT leaders take advantage of potential AI benefits in their industries without incurring significant costs or delays?
The manufacturing industry
ERP systems contain data that form the basis of market trends, sales information and defects and product recall records, all analysed by AI algorithms. These can inform designs to improve product functionality, usability and customer satisfaction, notes Dr. Nandini Chakravorti, associate director of digital engineering at the Manufacturing Technology Centre, an independent research and technology (RTO) organisation.
Such systems could also unlock information leading to more efficient supply chains and manufacturing processes. “For example, by examining supplier performance, transportation costs and lead times, manufacturers can develop more efficient transportation routes with the potential to lower costs and energy consumption,” Chakravorti explains. “AI algorithms can also analyse processes, including production schedules and equipment settings, to improve resource efficiency and productivity.”
While AI can improve outcomes, IT leaders must not depend entirely on the technology for strategy. To achieve such a vision requires leadership teams to be focused on the stability of their ERP, which is one of the most important yet complex systems in the supply chain process. A non-stop upgrade cycle can create major hurdles to this goal.
The retail industry
Retailers are battling tough economic forces, with margins shrinking at a rapid rate while costs of goods continue to soar. Predicting which products to create – and how much – to meet the changing tastes and demands of today’s consumers is becoming a greater challenge, one that AI can help overcome.
AI’s ability to identify key triggers and patterns in customer behaviour could help retailers identify new market opportunities. “For example, a company can use it to automatically analyse the combinations of firmographic, demographic and geographic profiles that most likely lead to repeat sales to help identify a potential new sales channel,” says Mark Simon, vice president of strategy at Celigo, an integration platform as a service (iPaaS).
David Lees, CTO of Basis Technologies, which provides an automated DevOps and testing platform for SAP, says that AI can offer helpful insights in managing production cycles and predicting needed inventory. “By analysing historical sales data, market trends and consumer behaviour, AI can forecast demand far quicker than manual processes, and without the risk of human error,” says Lees.
In fact, AI add-ons could even provide recommendations for actions. “Not only would the AI assist with identifying the trends and opportunities, but it would take that additional step and explicitly suggest who to pursue, with what product and via what channels to maximise impact,” says Simon.
What’s more, AI can help retailers with repetitive tasks that would normally require additional headcount. Simon explains: “For example, companies that still enter invoice data manually can use AI to read these documents, make sense of what they are and what that data is and properly accrue them into the ERP while minimising errors.”
The energy industry
The energy sector is facing disruption to ingrained business models, along with ever-growing pressure to shift to renewables and meet environmental, social and governance (ESG) regulatory demands. Ongoing economic volatility has added further complexity to these challenging market conditions.
“Energy is a particularly exposed industry to geopolitical and macroeconomic factors, which is why intelligent forecasting, and the identification of market trends is crucial,” says Duncan Kerr, presales architect at Infinity Group, which provides technology services and solutions. “AI can analyse customer input, market data, purchasing history and global supply chains to help innovate new, more agile offerings.”
In addition, AI could improve the tracking, reporting and analysis necessary for compliance with ESG regulations. “With so much complexity around ESG analysis and evolving reporting mandates, getting a grasp on ESG data and implementing this into a sustainability strategy is a steep challenge for energy companies,” Lees explains.
Organisations can also balance their ESG efforts with consumer appeal by investing in smart meters, smart technology and other tools to help consumers better understand their energy use. Much of this can be done by leveraging already existing systems for a fraction of the cost and time of a heavy migration or replatforming effort.
The benefit of enterprise AI strategy versus AI in ERP
While some vendors may have IT and finance executives believing that AI features can only be made available in the latest software or application, many customers have found this to be a long, arduous road that could even further delay the progress of their IT strategy.
Organisations that take a vendor-agnostic, composable approach to AI are better equipped to provide advice on the ways that AI can supercharge an ERP system. Such firms are ultimately those best able to help organisations address the complexities involved in applying this cutting-edge technology to business-critical processes.