As the financial health of the enterprise becomes more closely connected to digital technologies such as big data, analytics, mobile and cloud, it’s more critical than ever for IT and finance leaders to get along. However, a productive partnership is not a reality in many organisations. How can CIOs bridge the gap?
The two roles have historically been at odds, as the CFO worked to reduce risk and avoid overspending, forcing the CIO to wring as much as possible out of technology assets. According to Ernst & Young’s recent global survey of 652 financial executives, cost discipline, rather than strategic value, continues to define the IT investment mindset, and lack of mutual understanding between CIOs and CFOs still a common problem.
While the push-pull between budgets and IT investments will likely always exist, the dynamic of the relationship has changed and there’s now more of an emphasis on collaboration. As Ernst & Young’s research found, over the last three years, 61% of CFOs said they have been collaborating more with CIOs, and 71% said they are more involved in the IT agenda. In organisations where the relationship between IT and finance leaders isn’t so good, CFOs say it’s their insufficient understanding of IT issues that’s to blame.
In what is a good sign, IDG’s 2016 State of the CIO survey showed that IT and business leaders agreed on the top business drivers for technology investments in 2016: increasing operational efficiency and improving the customer experience. This indicates that CFOs are recognising the strategic importance of IT. In fact, some CFOs say keeping up with technology is the most important and stressful part of their jobs – and they consider it to be more important than regulatory compliance, harnessing/managing big data, and finding and retaining skilled staff.
What CFOs want
Depending on the maturity of IT within an enterprise, the CIO-CFO partnership can involve misaligned expectations. Many misunderstandings arise from their diverse backgrounds and the fact that each may not understand the challenges and complexities their counterpart faces.
Both leaders must develop a dynamic business partnership in order to garner the best business results, and according to CIO Magazine, there are five ways the CIO can make this happen. These include:
- Align IT investment with business strategy
CIOs have the opportunity to turn IT into a strategic asset for the business by ensuring there is a clear line of sight from the technology investments to positive business outcomes. David Axson, Managing Director of Accenture Strategy, Finance and Enterprise Performance, says, “Smart CIOs bring a high level of business acumen to the table and understand that investments in technology must be grounded in a clear explanation of the business value they will deliver”. He adds, “Above all, CFOs are looking for CIOs to be accountable for the design, deployment and operation of the technology environment that supports the business”.
- Be proactive about forming business partnerships
CIOs need to collaborate with financial teams to understand what reports and information they need to make decisions, as well as to provide them with the technological know-how they require. PureStorage CFO Tim Riitters told CIO Magazine, “Be proactive. Even if a CIO doesn’t sit at the CEO level staff they still should spend time with leaders across the organisation to understand the company’s strategic imperatives, in order to know how to leverage technology to support these strategies”. The best way to gain an insight into the CFO’s world it to communicate. As Riitters said, “If you aren’t getting the strategic context from your CFO, ask for it”.
- Speak the language of the customer
CIOs need to guide CFOs through priority issues to illustrate how technology can be leveraged to achieve business results, such as enabling strategy, increasing competitiveness, or improving operational efficiency. Doing so effectively means keeping IT jargon out of conversations – something that is standard for most CIOs today.
- Be transparent about pricing
CFOs may lament working with a CIO that does not exercise transparency and strategic decision-making when it comes to the costs associated with IT projects. A CIO who strategically vets investment ideas that don’t make enough business sense, while ensuring there are no overlapping IT projects or duplicated spending, will always be a good partner to the CFO.
- Assist with data analytics
With an increased focus on data and analytics, the CIO is a valuable source of information for CFOs who are navigating this new arena. As Axson said, “From the personal standpoint of the CFO, one of the biggest issues is that their finance teams are relying on inconsistent – or worse, inaccurate – data to develop insights and guide key decisions or still using spreadsheets as their primary analytical tool. CIOs can, and should, be helping the CFO and his team analyse available data and apply it to their respective areas of the business in a way that creates value.”
In today’s digital economy, the financial wellbeing of the enterprise depends on a solid CIO-CFO partnership. As technology permeates every corner of the business, both leaders’ roles are broadening and becoming more and more intertwined. As the lines blur, finance and IT are only going to have more to do with each other – so they might as well get along.
For more tips on building relationships with C-level executives and the line of business, download our business-IT alignment how-to guide for IT leaders here.