Bridging the Gap: The Dynamics Between Finance and IT Teams in Tech Scale-Ups

‍Fast growth is a challenge for all teams inside a scale-up. Each team needs to scale their processes and organisational structures while collaborating with other teams to achieve the company goals. Those cross-team interactions are  necessary but can come with frictions. One crucial yet often overlook dynamic is the connection between finance and IT teams. At Corma, we’ve seen firsthand the benefit when these two departments work hand-in-hand and the mess it creates when they fail to cooperate to centralise license management and streamline operations. Bridging the gap between finance and IT teams can be a challenge due to their distinct identities, cultures, and educational backgrounds but there are good strategies to overcome this gap.

The Divergent Worlds of Finance and IT bring a communication challenge

Finance professionals are typically detail-oriented, cautious towards risks, and focused on numbers and compliance. They bring a structured approach to their work, emphasizing accuracy, budgeting, and cost control. In scale-ups where structures have the tendency to get messy during periods of growth and change, it is the finance team that is often expected to bring guidance and structure into the company.

In contrast, IT teams are often more dynamic and adaptable, driven by innovation and problem-solving. They tend to prioritize efficiency and technological advancement, which can sometimes lead to a trial-and-error approach. IT often works in the background. Sometimes this goes as far as to the IT team basically being ignored - until something breaks. IT is seen as a cost center if it is a pre-requisite for the company being able to operate.

Given these differences, it’s no surprise that communication between finance and IT teams can sometimes be tricky. Finance teams may view IT’s experimental mindset as risky or uncontrolled, while IT teams might see finance’s emphasis on compliance and budget restrictions as stifling innovation.

For example, when implementing a new license management system, the finance team might be primarily concerned with cost, while the IT team focuses on functionality, efficiency and the employee experience. These differing priorities can lead to misunderstandings and friction if not managed properly.

Why Finance and IT need to speak together?

Effective communication between finance and IT teams is essential for several reasons. The allocation of resources and budgets for IT projects requires finance to understand technical needs and priorities. Likewise, IT must appreciate financial constraints to plan realistically. Both teams play crucial roles in risk management: finance assesses financial risks while IT handles cybersecurity and operational risks. Coordinated communication ensures comprehensive risk mitigation strategies. Strategic planning, including decisions on investments in new technologies and AI, necessitates input from both teams to ensure technical feasibility and financial soundness. Moreover, collaboration between finance and IT can drive forward a better profit structure by developing automated solutions that enhance operational efficiency. Accurate, timely, and secure data management, which is vital for compliance and reporting, relies on seamless communication between these teams to meet regulatory requirements.

Strategies for Effective Collaboration

To foster better communication and collaboration between finance and IT teams, we are happy to share the secret sauce to to smoothen communication from our experience:

consider the following strategies:

1. Cross-Functional Training: Encourage team members to learn the basics of each other’s fields. Finance professionals could benefit from understanding basic IT concepts, while IT staff could gain insight into financial principles and constraints. Those don’t need to be formal training but some simple job shadowing does the trick. From what we see software licence management, a topic which is relevant for both teams, is a good opportunity to share common experiences.
2. Joint Meetings and Workshops: Regularly scheduled meetings and workshops where both teams discuss projects and challenges can help bridge the knowledge gap and build mutual respect. This also avoids misalignment on priorities and can leader to a better attribution of resources.
3. Clear Communication Channels: Establish clear, open channels of communication. Esure that there is a shared understanding of terminology and objectives. Finance might speak of SaaS Management while IT refers to IT Asset management but both mean the same.
4. Align Goals and Objectives: Make sure that both teams are aligned on the overall goals and objectives of the company. A joined session for to prepare OKRs might do the trick. When finance and IT understand how their roles contribute to the bigger picture, they can work together more effectively.
5. Leadership and Mediation: Strong leadership is crucial. Leaders should mediate discussions and ensure that both perspectives are considered in decision-making processes. This can prevent one-sided decisions that may overlook important aspects from either team.

The Importance of Smooth Collaboration on licence management

Effective collaboration between finance and IT is not just a matter of internal harmony; it’s an aspect for the success of the company. When these teams work well together, they can create more efficient processes, better manage resources, and drive innovation while maintaining financial stability.

At Corma, our experience in centralizing license management has underscored the importance of this collaboration. We’ve seen how companies that foster strong communication between finance and IT teams can better navigate the complexities of scaling up and adapting to new challenges.

Conclusion

In tech scale-ups, where rapid growth and constant change are the norms, a strong, collaborative relationship between finance and IT teams is vital. The positive ROI of a tech scale-up that leverages finance and IT collaboration can become evident in a few months across different key metrics.

Companies that integrate these functions not only improve their operational efficiency and risk management but also drive innovation and enhance their profit structure.

In contrast, those that do not embrace this collaboration face significant inefficiencies, higher risks, and overspending. The data clearly supports the critical importance of fostering a strong, collaborative relationship between finance and IT teams in tech scale-ups.

At Corma, we believe that bridging this gap is not just possible but essential for the sustained success of any tech-driven enterprise.