From managing financial resources to overseeing IT infrastructure, the role of a Chief Financial Officer (CFO) has traditionally been varied and complex but clear-cut. Now, however, the CFO’s role is much broader, especially when it comes to cloud investments. When cloud technology boomed in the early noughties, businesses flocked to the cloud for its cost-saving promise over physical servers. But rising costs and ‘bill shock’ have made cloud efficiency a top priority for the modern CFO – especially those planning for or dealing with a merger or acquisition.
We all know the saying ‘teamwork makes the dream work’, and a CFO’s collaboration with IT is vital for optimizing cloud efficiency. Close collaboration between a CFO and their IT team is needed not just to strategize but to ensure effective execution of FinOps practices, and long-term ROI.
CFOs and IT leaders must all commit to open communication, mutual support, and actually doing what they say they’ll do. This approach leads to better cloud management and overall business success.
In this guide, we’ll explore the evolving role of the CFO in cloud investments, the importance of cloud efficiency, and how collaboration with IT can make all the difference.
The challenges faced by the modern CFO
Being a CFO is more than just crunching numbers – it’s about steering the company through ever-changing waters. But many CFOs don’t come from a tech background, which can make it more challenging to bridge the gap between dollars and data. Here are just a few of the challenges faced by the modern CFO:
- Bridging the technical-financial gap: Many CFOs come from a strong financial background but may lack extensive technical expertise. This can create a gap in understanding when it comes to integrating financial strategies with the technology needed to monitor or make changes to financial reporting systems.
- Interpreting technical jargon: CFOs often face the challenge of making sense of complex tech terms and concepts, which can be challenging without a technical background. This could slow down decision-making on tech investments.
- Collaboration with IT: Effective collaboration between the finance and IT departments is important for optimizing cloud systems. CFOs need to collaborate with their tech counterparts to make sure financial decisions align with what’s happening in the server room.
- Evaluating ROI on technology investments: CFOs have to weigh up the cost versus the potential payback of new technology, including cloud storage. It’s about striking a balance between cost management and long-term benefits – sometimes the benefits aren’t immediately obvious and are about futureproofing the company.
- Regulatory compliance and risk management: Keeping the company on the right side of the law is a full-time job, and it’s usually up to the CFO to stay on top of how tech choices measure up to rules and regulations.
How has the CFO role evolved?
The role of the CFO has expanded significantly with digital transformation. No longer just number crunchers, modern CFOs are now key players in strategic planning and analysis. Financial accountability in cloud spending is vital to maximise ROI, and this is where the concept of FinOps (Financial Operations) comes into play – merging finance and technology to manage cloud costs effectively.
Having operational or sales experience can be a big advantage for CFOs as it provides a broader perspective on the challenges faced by IT teams in procurement and delivery. Successful FinOps today is all about collaboration and accountability – ensuring financial decisions are grounded in technical realities and vice versa.
Find out more about how FinOps can help maximise your cloud ROI.
What’s the CFO responsible for in cloud efficiency?
When it comes to cloud efficiency, CFOs wear many hats to keep things running smoothly and cost-effective. Here’s a rundown of what they’re juggling:
- Cost management and optimization. CFOs oversee the costs of using cloud services to ensure they’re getting the best value. They closely monitor how much is spent on using, storing, and retrieving data to avoid overspending and make sure resources are used efficiently.
- Data security and compliance. Keeping data safe and following regulations like GDPR and HIPAA is crucial. CFOs work closely with IT to set up strong security measures and address risks related to where data is stored and how it’s managed.
- Vendor management. Choosing and managing relationships with cloud providers is a big part of the CFO’s job. They evaluate providers based on factors like cost, reliability, security, and level of support. They also need to negotiate contracts that protect the company’s interests and allow for future growth.
- Understanding cloud technology and terminology. CFOs need a solid understanding of cloud computing concepts such as IaaS, PaaS, SaaS, multi-cloud, and hybrid environments. This knowledge enables informed decision-making and strategic planning regarding cloud investments.
- Business continuity and disaster recovery. CFOs make sure the company has plans in place to keep operating smoothly if there’s a problem with the cloud. They oversee how data is backed up, redundancy measures, and how quickly the company can recover if something goes wrong.
- Strategic alignment with business goals. CFOs regularly assess how well the cloud supports business objectives, encourages innovation, and brings value to the company and its stakeholders. This ensures that cloud investments contribute effectively to the company’s growth and success.
Why is cloud collaboration between CFO and IT important?
Effective collaboration in FinOps means finance, IT, and other teams collaborating to squeeze the most out of cloud costs and boost efficiency. For example, CFOs and IT managers could work together to analyse cloud usage stats, spotting areas where resources aren’t fully used and tweak service plans accordingly.
By setting clear goals to save costs and tracking progress, they keep everything aligned with what the business needs while keeping services running smoothly. This teamwork ensures everyone’s on the same page, making data-backed decisions to trim cloud expenses without sacrificing quality or security. It’s about being proactive, scaling up smoothly, and constantly improving how to handle cloud operations.
Also, by working closely with IT, the CFO will have a clearer overview of training and development needs, both in terms of their own skillset and what their IT colleagues need to keep up to speed. With insights from an IT team, a CFO can make informed decisions on how to spend the training budget. Whether it’s through in-house workshops, online courses, or partnerships with educational institutions, good quality training and development will pave the way for a more capable and adaptable workforce.
How to achieve successful collaboration between CFO and IT
A successful partnership between CFO and IT is a labour of love and is much more than just a couple of scheduled catch-up meetings and a few email chains with relevant parties copied in. We’ve rounded up three key areas to keep in mind when building a strong working relationship between the CFO and IT team:
Develop key strategies
Key strategies for effective CFO-IT partnerships include:
- Clear communication channels. Make sure CFOs and IT teams are in sync with regular check-ins and established protocols for updates and approvals.
- Joint goals and KPIs. Start off by setting common efficiency goals and KPIs for cloud operations. Regularly review these to keep them relevant and achievable.
- Regular audits. Keep things in check with routine financial and technical audits.
- Data-driven decision making. Combine financial insights with IT metrics to optimize spend on cloud services.
- Joint training sessions. Arrange training sessions that bring both Finance and IT teams up to speed together.
Focus on the outcomes
These KPIs may help to measure the success of CFO/IT collaboration efforts:
- Employee satisfaction. Survey employees on their satisfaction with cloud services.
- Meeting effectiveness. Monitor how often CFOs and IT meet, track outcomes, and make sure everyone is accountable for the decided actions and progress made towards them.
- Cloud spending reduction. Measure how much is saved on cloud costs through various cost-cutting measures.
- Resource utilization. Track the percentage of used vs idle cloud resources.
- Service reliability. Keep a close eye on the operational time of cloud services against SLA targets to ensure value for money.
- Strategic alignment. Continuously assess how cloud projects align with overall business goals to stay on track.
Use effective tools
Having the right tools is also important for successful collaboration:
- Cloud management platforms. Use tools like our Surveil platform to help the CFO and IT teams manage cloud spending.
- Financial planning software. Make use of software designed for financial planning and analysis.
- Security software. Stay updated on the latest security tools to prevent expensive rule breaches.
What does the future hold for CFO-IT collaboration in the cloud?
The future of CFO-IT collaboration looks promising as the role of the CFO continues to adapt. Modern CFOs need to be agile, continuously focusing on cloud efficiencies and productivity. By creating a collaborative ethos throughout the finance team, this top-down cooperative approach can trickle into the entire organization, maximizing cloud ROI and driving better business outcomes overall.
Want to learn more? Check out more guides in the Surveil blog.