As IT evolves into a crucial business function, CFOs and CIOs must develop a dynamic business partnership in order to garner the best business results. Yet depending on the maturity of IT within your firm, the partnership can involve misaligned expectations.
The two roles have historically been at odds, however according to a 2013 report, 'The CFO as Catalyst for Change', produced by Longitude Research and commissioned by Accenture and Oracle, 84 per cent of CFOs have seen cooperation with their CIO improve, while all the CFOs we spoke to have a good working relationship with their CIOs.
To keep up this trend, here are the top five things CFOs want from their CIOs.
1. 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.
“CIOs have a real opportunity to have a seat at the table and to get involved in not only developing strategy but really helping to execute strategy,” says Michael Bradburn, CFO at Brisbane Airport Corporation.
“Their core capability can help enable so much improvement in the organisation. When a good CIO walks into a management meeting, they aren’t simply a CIO, they’re a business person solving business problems with their special expertise.”
This includes making timely recommendations as to how to streamline disparate legacy systems, when and how to deploy new technologies such as cloud, analytics or big data, and ensuring that the organisation is adequately protected from emerging cyber attacks, he said.
“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,” says David Axson, managing director, Accenture Strategy, Finance and Enterprise Performance.
“Above all, CFOs are looking for CIOs to be accountable for the design, deployment and operation of the technology environment that supports the business.”
2. Be proactive about forming business partnerships
While a good CIO will engage with overall business strategy, not all will be invited to the meeting, but that doesn’t mean they can’t have those interactions and build professional partnerships.
“Be proactive,” says Tim Riitters, CFO for PureStorage. “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.”
Riitters says it’s a good idea for CIOs to regularly sit down with their CFO, who can serve as another conduit for illustrating the company's business strategy.
“The best way to avoid miscommunication is to over communicate - early and often. If you aren’t getting the strategic context from your CFO, ask for it.
“It is a key piece of information that will ensure technology is being used optimally,” says Riitters. “It is an ongoing partnership where two heads are really better than one.”
These interactions can also ensure that the c-suites will gain a deeper understanding of what the CIOs role entails, which aids them in developing realistic expectations.
3. Speak the language of the customer
Being an IT leader means guiding CFOs through priority issues to illustrate how technology can be leveraged to achieve real results, such as enabling strategy, increasing competitiveness, or improving operational effectiveness.
Communicating these benefits, however, means recognising that not everyone is adept at speaking the technical language of IT.
“CIOs need to spend more time tailoring the benefits of the IT function to each of the different business divisions, because each of those leaders will have different needs,” says Bradburn.
“An IT leader that talks only about what their function does isn’t going to connect with them emotionally; they need to sell the benefits that are specific to each of the different divisions.
“This means listening to what those needs are and packaging an emotional solution that is focused on the benefit, and not the function, of IT.”
Adopting a shared language is also beneficially from a cultural point of view. Without it, working relationships for both internal and external partners can suffer.
Riitters recalls a previous role where the implementation of a large-scale global financial system was disrupted thanks to a communication block between in-house and third party IT teams.Read more: NEXTDC hires new CFO
“One team was very focused on a rapid implementation and agile development, while the other team was a more traditional long-term phased development team,” says Riitters. “It would be great for CIOs to size up cultural fit as part of the initial due diligence.”
4. Be transparent about pricing
CFOs may lament working with a CIO that does not exercising transparency and strategic decision-making when it comes to the costs associated with IT projects.
“IT will always cost more if the business doesn’t have transparency on pricing,” says Bradburn.
“If they’ve got transparency the business will always make a better decision. If a business requests a new program or system, if they don’t have transparency as to what those costs are (which is generally the case) they’ll always ask for more than they need.”
The server that’s available 24/7 with no down time seems most appealing, but if the CIO presents a transparent pricing guide that shows an alternative with an hour of downtime a day for a million dollars less, this will lead to better business decisions, says Bradburn.
“Quite often they’ll say they don’t want to pay that much of a premium for 24/7, they can actually deal with it being down for an hour, particularly if it saves them a million bucks.
"So those are the conversations that a good CIO will have, and as a CFO I’ll see good business decisions being made.”Read more: What companies look for when recruiting CIOs
Bradburn adds that 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.
5. Assist with data analytics
Companies in which a CFO and CIO work together to improve corporate decision making will thrive, especially when it comes to sourcing and analysing relevant, accurate data and taking equal responsibility for the integrity of that data.
“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,” says Axson.Read more: How to future-proof your ICT career
“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.”
By aligning around how decisions are made, the techniques employed, the analytical engines created, and the information delivery tool set used, both CFOs and CIOs can radically increase the impact they make within the organisation, according to Deloitte’s recent CFO Insights report, Data-Driven: The New CFO/CIO Dynamic.
“A good business person in the past was someone who could make reasonably good decisions most of the time, with imperfect information,” says Bradburn.
“Nowadays with big data and the sophisticated software for performing predictive analytics, using that information and those systems we can actually make better decisions every time. The CIO can help organisations reduce the risk and variability of those decisions.”
According to Deloitte’s 2013 CFO Signals survey, most CFOs in the US view the transformational impact of technology as far-reaching.
When asked about their priorities for capability improvement, CFOs listed IT/information management second after strategic planning, emphasising further the need for a strong business partnership between CIOs and CFOs.
“In the nearly two decades I've been in the industry, I've seen a steady ‘coming together’ of the IT and finance business functions. As IT continues infusing business context into their thinking and process, and business executives continue to get smarter on technology - it really feels more like a combined team versus a customer and a service provider approach,” says Riitters.
The consensus from the CFOs we approached, a good CFO recognises the true value of the CIO and IT team, and also ensuring proper communication to aid the CIO in strategic objectives.
“It is up to the CFO, and other members of the c-suite to make sure that the CIO knows exactly what [current] issues are and what success looks like, because the needs of the organisation can change rapidly and unexpectedly,” says Axson.
“It’s extremely important for both CIOs and CFOs to act as true business partners and keep an open dialogue to ensure that these new investments are keeping pace with any changes that may be happening.”