Optimizing the CIO and CFO Relationship

The CIO-CFO dynamic has undergone some improvements above the previous 10 years. What are these improvements and how do they influence corporate dynamics?

Previously this calendar year, I visited with Gina Mastanuono, CFO at ServiceNow, which delivers a cloud  system that allows companies handle electronic workflows. As a previous CIO, I recounted my early experiences to her about CFOs who have been skeptical of new IT projects, and whose objections have been a regular presence in budget funding meetings.

Mastanuono laughed. “That’s so outdated school!”

“Today, CFOs roles have improved substantially,” she explained. “As CFOs, we identify that we can not just stay in the economic world. We have to be organization strategists, capable of main our organizations by means of a crisis like COVID, but also comprehension how we will occur out potent on the other facet by strategically supporting innovation.”

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It was a breath of fresh air to listen to Mastanuono — nevertheless in the back of my mind, I nonetheless wondered if it was truly “old school” for CIOs to perceive the CFO as a undertaking blocker and a skeptic.

Seemingly, I’m not the only 1.

“Ninety-six p.c of survey respondents claimed that CIO and CFO collaboration is critical to IT transformation results,” famous Anna-Lee Muck, an editor in main for Dell who was reporting on a Dell survey. “However, a disheartening 89{446c0583c78045abf10327776a038b2df71144067b85dd55dd4a3a861892e4fa} cited substantial limitations — ranging from outdated strategies about the purpose of CIOs to obsolete reporting buildings — to this collaboration.”

Out of date reporting framework is well understood by CIOs, wherever typically the CIO have to report to the CFO alternatively of to the CEO. Early in my CIO job, I dealt with this reporting framework and it stifled me to the point of producing me established to get out from under it. So I utilized for a CIO posture with a further organization wherever I claimed instantly to the CEO and I felt I would have additional autonomy and influence.

I was appropriate about that — but I nonetheless experienced to fulfill with the CFO to get factors carried out — so I established to understand additional about our diverse approaches of viewing the world.

“CIOs are additional probably to be pioneers and/or integrators, although CFOs are additional probably to be guardians and drivers,” according to consultancy Deloitte in a description of diverse corporate individuality kinds. “Pioneers are novelty-trying to find, they like acquiring a wide range of opportunities, producing new ideas….On the other hand, the guardian individuality values framework and loyalty, are much additional methodical, element-oriented, and possibly a minor additional risk-averse.” 

I located this to be real from my have working experience. Nonetheless, I also learned above time that I could take pleasure in these differences. The CFO could also carry effective economic and expense insights into projects that would support us body up much better price propositions for technology suppliers when they have been doing work to generate our organization.

“CFOs recognize that they have to alter and grow their skills,” explained Mastanuono. “The fashionable CFO understands technology and how it can remodel the organization. He or she also requires to recognize the upcoming of what finance will seem like, and be a transformer of men and women, processes, and systems. The CFO have to transfer from getting a reactive to a proactive collaborator so the finish organization can be positioned to have the appropriate systems and knowledge at the appropriate time. Breaking down silos and building empathy and cross-useful collaboration are prerequisites, and the CFO-CIO partnership is a critical piece.”

Offered this, what can CIOs and CFOs do to get the best out of the CIO-CFO partnership for them selves and their companies?

  • Understand wherever the other particular person is coming from – Increasingly, CFOs bone up on IT although CIOs understand finance. In equally situations, it’s not to become an skilled in a further discipline. Rather, the objective is to build adequate doing work knowledge of the other discipline so they can be conversant. CIOs, for instance, really should be ready to recognize corporate economic reports, the company’s economic troubles, and what the repercussions are probably to be for any IT undertaking extensive in advance of the undertaking is presented for funding.
  • Fulfill often – In the previous, it was not unheard of for CIOs and CFOs to get together for the duration of budget setting up season, but rarely at any other time. Nonetheless, there’s a real profit in staying “connected” calendar year-spherical by collaborating on organization strategies that interact equally finance and IT. “By aligning finance and IT at the get started of each individual undertaking, you get greatest organization price,” explained Mastanuono.
  • Co-build tips for investments – Pretty much each and every organization financial investment right now has a technology part. In this ecosystem, CIOs and CFOs can seem at things these as return on financial investment (ROI) or the management of undertaking pitfalls that could effect financials down the street. They can also seem at concealed earnings prospects and decreased prices that can occur about with the appropriate technology investments.  CFOs can give recommendations on how to best organize the funding of a undertaking. Does it make feeling to operationalize a undertaking budget in a calendar year in which the business is carrying out well? Or is it additional prudent to amortize the undertaking technology shell out above time so the complete economic effect can be spread above many years?
  • Collaborate on a framework for IT financial investment governance – If CFOs and CIOs can build a frequent technique to IT investments that looks at strategic pitfalls as well as gains, it creates frequent ground for undertaking conversations and evaluations. That can strengthen the finish final result for the organization. Dangers getting seemed at could be economic, but they could also relate to other parts, these as IT stability, or the viability of favored suppliers and technologies to endure as companies for the extensive haul. In a dialogue these as this, technology investments really should be prioritized in accordance with requires of the in general corporate organization way. Opportunity regulatory and buyer concerns and pitfalls can be talked over, as can the risk of prolonged integrations with systems of record that have to be undertaken by IT at the cost of other projects.
  • Measure for organization outcomes – At the onset, each and every undertaking has an predicted rosy outcome—but some projects do much better than others above time. By maintaining a finger on the pulse of concluded projects and what they are offering to the organization, equally the CFO and the CIO can fulfill and consider what worked and what dissatisfied, then understand from there. “An instance is a recruiting technique that IT installs for HR,” explained Mastanuono. “The CIO may well think of the undertaking in conditions of it getting effectively installed. But the CFO may well check with, is attrition down considering that we’ve been working with this technique? And if attrition is down, how is that influencing the bottom line?”

Associated Information:

Approaches to Aid CIOs and CFOs Calculate Cloud Charges and ROI

What Will become of CFOs In the course of Electronic Transformation?

The At any time-Increasing List of C-Stage Technological innovation Positions

 

Mary E. Shacklett is an internationally acknowledged technology commentator and President of Transworld Info, a advertising and marketing and technology companies agency. Prior to founding her have business, she was Vice President of Product or service Analysis and Program Improvement for Summit Information and facts … Look at Complete Bio

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