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CFOs and IT Management
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General
For many years, IT departments were seen primarily as “cost centers”, meaning IT costs money to operate and does not add to profits (or value) of businesses. This mindset has evolved alongside the responsibilities of the small business CFO. While we still sometimes hear the sentiment “how do we pay less for IT?” most CFOs are now asking us how their investment in IT positively impacts the business for the most optimized outcome.
CFOs can take an active role in IT management. CFOs are no longer responsible for just finance, but now can oversee keys areas of technology, including digital transformation, cybersecurity management and compliance. A focus on specific areas: cybersecurity, Key Performance Indicators (KPIs) and competitive edge can provide an overall framework for analyzing current and future IT investment.
Cybersecurity: Mitigating Costly Risks
The costs associated with data breaches continue to trend upward. Proactively investing in a multi-layered cybersecurity defense reduces the risk of ransomware, data breaches etc. CFOs should be aware of all vulnerabilities so that critical gaps can be fixed. Not only should the cost to fill these gaps be known, but also the cost if these gaps are not addressed.
According to the Canadian Centre for Cyber Security, the average cost of a data breach is $6.35 million per breach. The average cost of a ransomware attack specifically, including payout and recovery, is $2.3 million per attack in 2021.
At Nucleus, all of these gaps are identified in a Cybersecurity Scorecard. Assessments are administered on-site and remotely and include a review of staff security awareness and security policies. Once an assessment has been completed, a Cybersecurity Scorecard is delivered that highlights the current state, risk level, and recommendations for remediation. The outcome being the following:
- Risk determination and mitigation
- A roadmap for your organization
- A detailed report to help management
KPIs
The pandemic accelerated digital transformation and businesses became even more reliant on data. CFOs are increasingly reliant on KPIs to manage and analyze data to drive success. This data quantifies return on technology investment through actionable initiatives like IT roadmaps.
A Competitive Edge
Investing in cloud-based solutions can position businesses to be more competitive. Here is a list of just some of the benefits CFOs can evaluate to understand how cloud technology best provides businesses with a competitive advantage:
- Scalability and flexibility
- Availability
- Productivity
- Automation
- Reliability
- Security
Choosing a Provider based on Cost
Despite the evolving mindset and duties of CFOs on technology costs, we still meet with business leaders and CFOs who decide to choose an IT provider based on cost alone. Perhaps the real problem is that all the providers appear to be providing the same solutions so they choose the one with the lowest pricing model. When changing providers, consider why a provider may be cheaper and the risks associated with basing your decision alone on cost. Is the provider using a technology stack that meets industry best standards? What is their capacity? Do they have just a handful of technicians with limited IT skillsets? What internal KPIs, tools, and processes have they invested in to ensure efficiency in service delivery?
vCIO Services and IT Budgeting
Our vCIOs work with CFOs to evaluate your current spend on IT and partner with you to define an investment roadmap: solutions/services that have a positive ROI. We call this “supercharging your technology investment”. With a defined IT roadmap CFOs can focus on the tangible improvements that either saves money or has a return on investment that positively impacts both the business and bottom line. Working with a long-term Managed Services provider can reduce your costs and risks. If you are interested in learning more about our vCIO services and IT roadmap process, reach out to us.
