CIOs are constantly being told that they need to form stronger alliances with the chief marketing officer (CMO), the chief data officer (CDO), and, of course, the CEO. Now there’s another C-suite executive in need of attention: the chief financial officer (CFO). And for some reason, the burden always seems to be placed on the CIO to improve the relationship.
Granted, in some organizations the CIO actually reports to the CFO, so it does indeed behoove the CIO to cultivate a good relationship—upwards, in this case. But in organizations where CIOs and CFOs are peers, experts are advising CIOs to make more of an effort to partner with CFOs. Especially since CFOs are starting to forge better relationships with CMOs as the latter become more involved in driving business innovation.
Most of what CFOs want from CIOs boils down to thinking in terms of the business and less in terms of technology, writes Bonnie Gardiner in CIO. “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,” she writes. “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 ensure that the organization is adequately protected from emerging cyber attacks.”
In fact, not doing this is leading some to predict that reporting structures may change over time and a CIO will report to the CFO, rather than the CEO. “CIOs screwed up a golden opportunity 10 years ago,” writes Myles Suer, senior manager of solutions marketing at Informatica. “At this time, CIOs one by one clawed their way to the table and separated themselves from the CFO. However, once they were at the table, they did not change their game. They continued to talk bits and bytes versus business issues. And one by one, they are being returned to the CFO to manage.”
CIOs also need to make sure that CFOs understand the interesting challenges that IT projects can provide in terms of return on investment, writes David McLaughlin in CIO. “Make sure your CFO understands the typical risk/return profile of IT projects and how you plan to manage the risk,” he writes. “Most CFOs think (as they should) that a dollar invested should produce a dollar plus a specific risk-adjusted return. It’s how they think about any investment, whether acquiring manufacturing equipment, buying real estate or completing an acquisition. But IT has a challenging risk/reward profile that is frustrating to some CFOs,” writes McLaughlin, noting that Standish Group research showed that 53 percent of IT projects overrun their budget and timeline, while 31 percent are cancelled.
Part of the way to do this is to speak the CFO’s language, McLaughlin continues. CIOs have to be able to cite figures such as capital and operational expenses, show how they compare with other companies in the industry, and speak to key business metrics and how IT contributes to them. In particular, CIOs and CFOs should be teaming up on analytics, Gardiner advises. “Companies in which a CFO and CIO work together to improve corporate decision making will thrive, especially when it comes to sourcing and analyzing relevant, accurate data and taking equal responsibility for the integrity of that data,” she writes.
In fact, Deloitte CEO Frank Friedman goes so far as to say that CFOs should “own” analytics. “CFOs’ position as the steward of value and impartial guardian of truth across the organization gives them the credibility and trust that is needed when analytics produce insights that debunk some of the myths or accepted wisdom that can reside within the business, or about constraints on business performance,” he writes in CFO—an article that, incidentally, doesn’t even mention the CIO. “When people are provided observations that do not align with their thinking, there is a tendency to say, ‘That can’t be right,’ and it can be challenging to convince them that the results and the data they’re based on are accurate.” How to do this without involving the CIO, well, that he doesn’t go into.
The good news is there are some people saying that the CFO should be making more of an effort to get to understand the CIO’s wheelhouse as well, particularly as companies strive to become more digital. “The general perception of CFO as bean counter, rather than digital ninja, does not help the case for inclusion. In addition, the CFO often plays a background role when it comes to marketing, social media, and communication about innovation,” writes Michael Krigsman in ZDNet. “CFOs must adopt a new ‘mental mindset’ that embraces digital thinking. CFOs who fail to adopt this kind of thinking put their companies at risk.”
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