Technology is expanding the role that CFOs and CIOs play in an organization. More than just purely handling the financials, CFOs are now expected to have a thorough understanding of customers and markets and the role of technology in reaching them.
Likewise, CIOs have become increasingly involved in strategy decisions, with one out of every four saying that market growth is their top priority for 2018, according to a survey of more than 2,500 IT leaders in CIO magazine.
Both executives are now charged with transforming data into a competitive advantage, enabling innovation across all customer touch points—all the while ensuring the security of the organization along with its partners, suppliers and customers.
According to a recent Forbes Insight Report, nearly all of respondents (96%) say that CIO and CFO collaboration is critical. But at the same time, most (89%) say there are significant barriers that prevent such cooperation.
And in a recent poll from Deloitte, fewer than one-third of respondents said the CFO and CIO at their company “share a strong partnership characterized by mutual understanding.”
Drilling Down on Data
One way to improve the relationship is through better use of data. First, I recommend that the CIO and the CFO work together to identify, establish and track operational and customer experience Key Performance Indicators (KPIs).
For instance, if you’re an ecommerce site, time to ship is an important KPI for the customer experience, as is the number of incoming calls to the customer care center inquiring about a late package—and even the rate of cancellations that stems from those calls. By combining those data points, the CIO and CFO have enough targeted information to make strategic decisions together, such as whether to invest in better warehouse operations to get goods shipped faster.
The next step is to identify behaviors that signify a positive or negative experience—for example, inquiries to customer care about the package shipments mentioned above.
Are there certain types of customers (by product, location) who call into the help center more frequently than others? What is the impact of those interactions on customer lifetime value (LTV)? Are specific products or product categories returned more frequently? If so, what’s the impact of such purchases on customer sentiment? Tracking these data points will help the company hone in on issues and products that negatively affect the customer experience and take corrective action.
These are strategic questions that have a huge impact on the company’s bottom line, but they can’t be answered unless the CFO and CIO together identify the range of metrics that define better efficiency and customer experiences.
The same holds true for financial efficiency and business growth metrics. Every company wants to add new customers to their rosters, but how well do they really understand the cost of acquisition and LTV by customer segment?
By tracking these two metrics simultaneously, merging data from multiple sources—GL, CRM, ERP, help desk—into a variety of views on an analytics dashboard, an organization will have a better understanding of where to concentrate efforts to drive profitability. Moreover, companies can proactively identify when actuals fall short of plan—and institute an appropriate course correction.