3 Ways Finance Executives Can Support IT Investments  

21 April 2021:

When identifying new opportunities to reduce costs while gaining better returns on IT sourcing investments such as digital transformation, software licenses, or outsourcing, the business is better positioned for success if CFOs and CIOs approach the sourcing process together. While this has always been the case, new dynamics due to COVID has meant CFOs and financial leaders can drive greater sustainable savings and growth opportunities when there is collaboration with IT leaders to determine sourcing and contracting strategies.

A key for CFOs is to get connected and involved early in the process. Finance leaders should be key stakeholders in IT vendor selection and contracting activities. And while it may not be necessary for CFOs to actively participate as members of the “table team” for IT negotiations, they should be kept apprised of key milestones so they’re fully prepared when their perspectives and expertise are needed.

Finance executives play a pivotal role in ensuring IT sourcing negotiations provide the proper structure and ongoing analysis to support the overall business case. That’s true whether determining the proper accounting treatment for a purchase, pressure testing financial engineering models, or assessing the bottom-line impacts of termination fees or deal “sweeteners” like deferred charges and supplier investments. Additionally, finance should have a seat at the table to help assess relevant financial impacts of contract terms and ensure projected costs are built into the budget.

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Source: Financial Executives


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