Vital Allies: CFOs and Tech Chiefs Form a Bond to Scope Out Customer Needs

[Editor’s Note: This is the first in a series of CFOworld articles that will run from time to time, discussing the ever-closer relationship between top executives in finance and technology.]

At technology services provider TradeCard, chief financial officer Steve Ford and chief technology officer Nestor Zwyhun often find themselves putting their heads together — to help them understand the minds of the CFOs and CTOs of the companies that are TradeCard’s customers.

That’s because New York-based TradeCard’s software-as-a-service product — a hosted platform for everything from sourcing, logistics, and supply chain finance — is heavily used in its customers’ finance and technology departments, among others. Thus, it helps bring together their finance and technology leaders, as well.

“In a sense,” says Ford of TradeCard’s relationship with its customers, “we’re living the service we’re selling.”

An Ever-Stronger Alliance

For George Westerman, a professor at MIT Sloan School of Management and coauthor of The Real Business of IT: How CIOs Create and Communicate Value, what’s really turning CFOs and technology chiefs into corporate partners is the drive for transparency, something that IT is enabling now as never before. “What we’ve found in our research is that the number one way to improve operations is to create transparency about performance,” he says. More than any other executives, “CFOs understand transparency and the discipline that can grow from it.”

At companies that are relying more heavily on cloud-based services, the strong alliance between the CFO and top tech officials, whatever their titles, has become particularly vital to corporate success. Nearly always, for example, the heads of the two departments are finding they need work in concert on issues related to the company’s enterprise resource planning system, along with other IT systems.

That’s certainly true of Ford and Zwyhun — as well as for the many corporate finance and tech leadership “pairs” that have been formed at the companies that subscribe to TradeCard’s SaaS product.

Ron Gill, CFO of NetSuite, provider of TradeCard’s own ERP, says that Ford and Zwyhun “are both key points of contact on the account, and collaborate significantly when it comes to their relationship with us.”

But it’s only the start of the work they do together, much of it involved with understanding the needs of their SaaS offering’s corporate users as they too pursue operational transparency together. Indeed, the two men suggest that these days a close finance-tech relationship is essential in preventing dysfunction in numerous areas within companies, which increasingly are tied together by a single data system.

‘Security Through Obscurity’ No More

Take the area of data security, a quality that TradeCard’s SaaS product seeks to deliver — and certainly is an area of serious concern for both tech and finance.

“In the old days you had security through obscurity,” CTO Zwyhun says, recalling how difficult it was to know what was going on in area disciplines within companies. “That’s what used to happen when organizations had so many different systems.” And, for example, “it was hard to do a data dump.” But now, with a single cloud-based system instead of multiple systems, company data “is globally accessible” across the range of disciplines — although that creates potential vulnerabilities, of course, mandating that the system “has to be managed very well.”

Agreed, says Ford. But he notes the importance, also, of the data systems being “accurate and reliable.” If it is, that can fortify the security of the system. “Therein lies the corrective measure,” he says. “If something is incorrect, it’s caught very quickly.” And just as quickly, the company can install fixes to minimize future inaccuracies.

More Tension than Friction

In a joint interview, Ford and Zwyhun sometimes tend to finish each other’s sentences, another reflection of how deeply they work together.

“From my perspective,” says Ford, “the best outcome is when both tech and finance view things with a business approach, rather than just a finance and accounting approach or a technology approach. You jointly put your efforts together to solve the business problem.” At which point, Zwyhun notes that his “responsibility is to provide a platform for the entire company” — a single platform that, he jokes, works for him “because I’m selfish and lazy, and I want to be able to reuse and share the same data” throughout the TradeCard enterprise. For finance, technology, and other areas, including sales, “I want us all to be speaking on the same page.”

Having that single data system also makes it easier for the CTO to encourage improvements in Ford’s department. “I’ve been pushing finance to do a variety of things,” including improving the budgeting process, he says. That sometimes creates friction between Zwyhun and Ford, but “I think the friction is good,” he adds.

To which Ford responds: “It’s actually extremely helpful — and I’d call it more tension than friction. Getting that meeting of the minds is an extremely powerful place. In essence, budgets and software are mostly controlled within those two groups” of finance and tech.

That kind of sharing “enforces the set of commonality,” adds the CTO, noting that in old multiple-system 1990s, for example “a lot of the lines (of communication) that did exist became blurred or even dissolved.”

The Cloud’s Forerunners

It’s a multiple-system that Steve Ford remembers well, having worked in finance for 23 years before joining closely-held TradeCard in 2009. As CFO at other tech services companies — where he had experience with public offerings, acquisitions and turnarounds, among other situations — he watched the evolution of shared services Internet-based delivery, the forerunners of the cloud. A key difference, he says, is that in today’s cloud environment “you can move larger amounts of data more efficiently, and at lower cost.”

The NetSuite ERP installation “was in process when I came onboard” at TradeCare, he says. And it quickly brought him together with Zwyhun, proving to Ford the power of having both finance and technology work toward solving a business problem, rather than pure departmental problems. “There’s a need on the part of the CFO to have each area run its own operation effectively,” and a successful ERP implementation achieves that. “But it goes to the entire CTO’s operation,” because he manages the system.

The SaaS product that TradeCard provides similarly gives increased functionality to its customers — while enabling tech executives and finance to communicate more easily.

“It’s a really critical factor as a company grows,” he says. “It helps them run their business, monitor their performance, and track how they’re doing against targets.” Each employee, “operates as a sort of CFO,” if the system is right.

In the area of sales, for example, “you just need an Internet connection, and every sales person sees the same information.”

The Rise of the Dashboard

And from Zwyhun’s point of view, that’s only the beginning of what a simplified ERP system delivers. “It’s kind of easy now to see what’s going on in the company,” he says, compared to 2005, when he became one of TradeCard’s early employees, and before the NetSuite system was installed. Then, multiple systems included an Oracle financial system, a Salesforce.com system for automation and customer relations, and, of course, Excel spreadsheets.

Now NetSuite is the main system at TradeCard. “One benefit of that system has been the increase in the number of KPI (key performance indicator) dashboards on employee computers,” says Zwyhun.

Many of those same qualities are included in the SaaS approach that TradeCard delivers to its customers. “Groups of employees that should be working together in theory,” he adds, “now they’re really working together efficiently and crisply, with the same set of data.”

And TradeCard has made it possible for companies to improve their external communications, as well. “We helped some of our customers become Sarbox compliant,” says Zwyhun. That compliance advantage comes because “we connect the physical movement of goods with the ability to pay for the goods.”

Cooperation between IT and finance isn’t dependent on a reporting structure that runs through finance. At TradeCard, for example, Zwyhun reports to CEO Kurt Cavano.

“I have experienced both the way it is at TradeCard, and also having technology report to me as CFO,” says Ford. “I believe both can work.” He believes that at technology-providing companies like his current one it may be preferable for a CTO to report to the CEO. At other companies, where “technology is primarily part of the internal service and support function,” having IT report through the CFO often is better.

“In either case,” Ford adds, “it is absolutely vital that both CFO and CTO work closely and well together.”