For most organisations, T&E spend follows salaries as the largest controllable expense. Even in today’s connected world, with virtual meetings and online collaboration making a significant change in the way companies work, there are many instances where face-to-face human interaction is indispensable. And travel is an essential aspect of forging and strengthening business relationships, within the company or with customers and other stakeholders.
T&E management has been historically seen as a) a manual process-intensive facet of the organisation and b) a cumbersome procedure that uses up a lot of time and effort, and is wrought with potential for human error.
The work done by the finance department can become significantly more efficient and faster with the adoption of an intelligent spend management solution. And it can also lead to a seamless and more enjoyable employee experience.
Finance-IT partnership begins at the top
If we look at the bigger picture, transforming a business using technology is a decision that has to be taken at, and nurtured by, the C-suite level. The relationship between the CIO and the CFO is crucial to ensure that the right technologies are selected to drive the organisation forward – a decision that could mean the difference between success and failure.
Rather than viewing the CIO as a functional head with siloed responsibilities, the CFO needs to see the role as a partner in driving the business vision. Collaborative actions will see a development of synergies rather than initiatives that pull in different directions.
A recent Gartner survey highlighted that companies with strong CFO-CIO relationships are 51% more likely to easily find funding for digital initiatives. ( https://www.gartner.com/en/newsroom/press-releases/2022-04-20-gartner-survey-reveals-only-30-percent-of-cfos-and-cios-have-a-collegial-and-business-centric-relationship)
According to Randeep Rathindran, Vice President of Research in the finance practice at Gartner, “We’re operating [in] an environment where companies’ margins are under pressure from input price inflation and potentially stagflation. Generating higher revenue or asset productivity from discretionary technology spending and digitalisation can help offset this margin pressure. This is why CFOs and CIOs need to be ‘joined at the hip;’ to make sure that the benefits of digitalisation initiatives are being extracted and harvested.”
The survey also revealed that when the CIO-CFO relationship is strong, the company is 18% more likely to achieve its intended business outcomes.
A productive relationship between the C-suite occupants helps set the tone for the collaboration and cooperation of the finance and IT teams. This means the implementation of appropriate software that works to increase efficiency, improve productivity, and enhance employee experience.
Finance and IT in T&E management
An interesting example where finance and technology work together is in managing T&E. As mentioned earlier, T&E is a controllable cost, and technology can play a vital role in not just controlling costs, but gathering data that can lead to better business outcomes.
The most obvious difference that implementing a spend management solution is in making the process itself faster, seamless, and more compliant. A comprehensive solution, it streamlines every aspect from application through to approvals and final reimbursement. For example, rules set within the program ensure that non-compliant requests from employees are not accepted inputs during the application stage itself, thus eliminating the need for manual compliance checks.
The larger impact that technology adds to finance originates from the data that is gathered. The ability to consolidate all the data and slice and dice it opens up possibilities to rationalise spends, renegotiate better deals, and enable more accurate forecasting.
Analysing spend by travel vendors can reveal opportunities for cost control and rationalisation. For example, data may reveal tie-ups with two very similar hotels in close proximity. Consolidating business with fewer one of them can set the ground for stronger negotiation and travel sourcing optimisation.
The transparency that a spend management solution brings to the data can also reveal trends and patterns that lead to better forecasting and budgeting. This is a key factor in the collaboration between IT and finance. This collaboration envisions not only the removal of silos, but an active collaboration that generates robust analyses and actionable insights. Spend management transforms into a catalyst for business growth and a tool to guide business vision.
When the outlook of finance and IT are in sync, the results are more than the sum of the parts; the impact is tangible and can influence the trajectory of the business for the better.