CFOs & CIOs > Developing a Winning Team

In part two of our technology special feature, CFO Magazine journalist Nicole Madigan speaks to the AFL’s Rob Pickering about the organisation’s digital transformation, and why CFOs and CIOs require a basic understanding of each other’s core responsibilities.

While AFL CIO Rob Pickering describes his relationship with c-suite colleague, CFO Melissa Azzopardi, as a “great, multifaceted” one, the organisation’s recent digital transformation project tested both its strength and its depth.

The pair co-led the introduction of a new ERP across the AFL and its 13 clubs – with Azzopardi and her team managing the business process change, while Pickering and his team handled the technology implementation.

Pickering says the project necessitated a deeper partnering to ensure that “we could get the best for the entire AFL ecosystem”.

“This was a great success,” he says.

“Delivering us the end-to-end project inside of nine months across the 13 clubs, the AFL/Marvel Stadium and over 200 operating entities inside of those systems.”

Digital and technology transformation has been a key priority for the AFL over the past two years, requiring a strong partnership between the pair to effectively co-create business cases for technology investments.

“To ensure that we’re focused of course on the costs, but also the benefits that would accrue across the industry.

“Collectively we’ve been working together on our risk agenda, along with our audit and risk committee and our clubs around cyber security.”

MUTUAL UNDERSTANDING 

According to Pickering, both the CIO and CFO require a mutual understanding of each other’s role, removing any ‘finance’ or ‘technology’ blinkers to take a “general management” approach to decision-making.

“Our jobs as General Managers is to take a broader than our portfolio view to deliver for the business and we’re completely aligned on that,” says Pickering.

“That’s not to say there isn’t challenge around ensuring the right value is being delivered, or value is being realised – but more that we put that challenge on ourselves to ensure we’re getting the best bang for buck we can.”

Just as finance teams must be open-minded to the value of technology investments, IT departments can’t close their eyes to financial requirements, says Pickering. In fact, he says, financial ignorance – whether wilful or otherwise – is one of the biggest areas of conflict between the two departments.  

“A lack of rigour from technology teams in their finance processes – insufficient budgeting, lack of capital planning and disinterest in finance operations can breed a culture of finance having to ‘clean up’ after IT,” Pickering explains.

“For me this is solved by taking an active interest and learning how these processes need to work for finance and then making sure my teams and I have the requisite rigour to show that we’re as focused on strong financial governance as the finance teams are.”

At the AFL, investments in technology endure a rigorous business case process, where the department seeks input from across all areas of the business – including finance – to ensure all aspects are considered.

“This is just good governance,” says Pickering.

“Again, for me, finance isn’t an esoteric thing that I don’t pay any attention to – I’d like to think I’m just as interested in positive business cases that adequately consider all financial elements as our finance leadership is.”

“We’ve built out a comprehensive IT budget in the last two years coming out of COVID which is detailed and phased across months – we’ve had great support from our finance teams to do this and we’re now in a good place.

“With the transformation done over the last two and a half years we’ve moved significantly from large capital forecasting activities to more predictable operational expenditure approach – which makes planning and forecasting a little easier.

“In saying that, through our ownership of Marvel Stadium we’ve also established a capital replacement forecast through to 2030 for technology assets – which makes for predictable replacement schedules and no surprises around the impacts of depreciation and replacement activities.”

MEASURING SUCCESS

Measuring the success of both departments is a constant balancing act.

“The AFL is always looking at whether technology investments drive incremental revenue, unlock new business opportunities, remove costs, or reduce risk,” says Pickering.

“We’re only recently completed the large-scale transformation we’ve been undertaking so now we’ll move into a phase where we’ll acquit the benefits, delivered against the benefits positioned in the initial business cases.”

When it comes to metrics, IT is measured in the same way other initiatives at the AFL are measured – by talking quantitatively about the benefits that are being realised in a straightforward way.

“Our focus across our IT initiatives is to deliver efficiency that can be realised across the business, helping to automate manual processes so that our broader business can focus on value adding activities rather than manual work.

“Additionally, technology systems underpin the surfacing of data to the broader business – especially finance – to assist in better decision making through the use of that data.”

MANAGING CYBER SECURITY

CFOs intuitively understand risk so they’re a great partner for CIOs to help set, measure, and monitor the organisations risk appetite, explains Pickering.

“They’re also able to help value risk, which can be powerful to help technology teams gain investment for areas that can be hard to quantify benefits from a risk perspective.

“It has certainly borne out with recent high-profile hacks that in the same way data can be incredibly valuable, it can also be an incredible liability, even when handled well – given perfect cyber security posture is impossible.

“It’s a good discussion to be had with the broader business as to what data are you storing, where, for what purposes and for how long should that data be stored.”

Pickering believes if the data is not going to deliver value to the organisation, then it’s not worth the risk of holding that data.

THE NECESSARY DIALOGUE

CFOs and CIOs could be talking more about how they enable and lead whole of business transformation, says Pickering, not just from a technology perspective but also a people and process perspective.

“CFOs bring a wealth of understanding in how a business runs that is often much greater than technology leadership is exposed to – leveraging that to deliver business transformation is incredibly valuable.”

While Pickering says it’s not essential for CFOs to be particularly digital savvy – providing there’s a strong and trusted relationship – Pickering does believe there’s benefit to mutual exposure to each department’s core reason for being.

“Having a level of exposure, interest and understanding helps to ensure that the respective teams can work together,” he explains.

“For me personally, in my team I have two senior technology staff that are actually accountants by trade – so that helps us with a more fulsome understanding of how finance processes work.”

What is essential though, says Pickering, is that CFOs and CIOs agree on a road map for future investment in technology.

“CFOs (must be) clear on the future investment pathway, given CFOs are largely responsible for maintaining the capital/cash management plan,” he says.

“It is also important that CFOs have the clarity of the CIO’s tech strategy to assist with future financial planning.”

TIMES HAVE CHANGED

While the stereotypes of CFOs always wanting to reduce spend, and CIOs having a money-is-no-obstacle approach to investing in tech, Pickering says in reality, things have changed.

“The biggest change I think is a generational one, as we’re seeing CFOs who are interested, capable and have been involved in many technology projects,” says Pickering.

“There’s a stronger understanding that CIOs aren’t just there to do value-less tech projects and that correctly leveraged, there’s a real superpower that can be unlocked.”

From a CIOs perspective, Pickering says leaders are coming through the ranks who are interested in finance, maybe have finance backgrounds, and see the value of partnering with CFOs in delivering business value.

“These respective changes of attitude through experience I think has brought us to where we are today.”