For virtually all CFOs, there’s more digitization in the future. But will those IT investments be made as wisely as could be? And can finance pros even tell if they’re not?
A staggering 41% of your peers admit they lack good financial metrics for IT return on investment.
So exposes Grant Thornton in a new research study, 2018 CFO Insights on New Technologies.
Here’s how to keep the push to stay competitive from pushing your organization into the red.
Why you can’t afford to get it wrong
The stakes are certainly high when it comes to any type of IT project.
But the larger they are, the less you can afford to get it wrong. According to the folks at McKinsey, large IT projects:
- run over budget 45% of the time, and
- deliver 56% less value than planned.
The stakes are higher than most realize: 17% of projects go so bad that it threatens a business’s survival.
Now add in the fact that many digitization technologies are even more risky because they’re so new.
So how to stack the odds of success in your favor? A few strategies on the front end can help.
Clarify your objectives from the start
It’s near impossible to gauge the success of an IT project if you’re not crystal clear why you’re doing it.
And be aware: Those reasons are changing for many finance execs.
Currently, these are the goals driving CFOs’ tech investment strategies today:
- Improved operational performance
- Reduced costs
- Improved customer experience
- Better performance management
But compare it to what your peers say will guide their choices in just two years’ time:
- Improved customer experience
- Improved operational performance
- Reduced costs
- Improved competitive differentiation
With projects like these, you want to take the long view. It may be a good time to step back and re-evaluate your objectives.
Making sure there’s consensus on an end goal will influence the metrics you put in place to determine an initiative’s success.
Recognize what can undercut progress
Even if you’re ready to go full speed ahead with new tech plans for Finance, other things may be lurking which can hijack dollars intended for those forward looking improvements.
Anything from the upkeep of legacy systems to IT talent shortages are causing more strategic tech plans to get put on hold or – even worse – stalled once in progress.
And that can make achieving ROI you’re after a near impossible feat.
Going in with eyes wide open and having a Plan B for any unexpected deflection of resources, financial or time, can help keep you on the right side of the financial metrics you set up to achieve the competitive edge you were after in the first place.
Info: For the Grant Thornton study, go to grantthornton.com/library/survey-reports/CFO-survey/2018/investment-in-new-technologies-reaches-the-finance-function.aspx
