In the past, the CIO and CFO rode parallel but separate journeys to boardroom influence. Now, with the growth of data analytics and cloud-enabled ERP systems, as well as significant cybersecurity concerns, neither can afford to constantly lock horns over ownership of data and technology decision-making. Instead, they require a collaborative partnership in which each complements the other for maximum future impact.
That’s partly because of the shifting IT landscape, in which digital transformation across the enterprise is breaking down silos and boosting collaboration. In fact, more than a third of IT projects are now collaborative ventures, according to a Forrester study, including jointly by CIO-led teams and business groups. Furthermore, the study found, the share of IT projects primarily or exclusively run by IT will decline from 55% in 2009 to 47% in 2015.
However, while CEOs from high-performing organizations say leveraging IT should be the main focus of CFOs in the future, according to KPMG’s “View From the Top,” less than half think the finance function is doing a good job in exploring and implementing the best new technology. The CIO is in a unique position to lead the way toward building momentum and encouraging alignment between technology investments and company strategies — as, essentially, an evangelist in the C-Suite. Clearly, a strong, collaborative relationship is key to success in an age of digital disruption.
Keep this CIO-CFO checklist in mind as you work to bring these two leaders closer together in your organization:
1. Keep the Focus on the Business
KPMG’s The Visionary CIO emphasizes that when it comes to applying innovative technologies, there is one simple question that needs to be answered: “What are we trying to achieve as an organization and how can technology help us achieve it?” As the CIO and CFO work together, the focus needs to remain on the business, customers and people — which will inform positive and innovative technology decisions.
2. Develop Mutual Respect
CIOs continue to fight perceptions that they are simply managing IT costs rather than developing innovative strategies, found a Forrester Research executive survey. On the other hand, CFOs are expected to be more strategic and continue to gain a deeper understanding of IT, but CIOs may not always easily interpret the CFO role and where they are coming from. It’s essential to develop mutual respect and come together for the benefit of the business.
3. Learn to Speak a Common Language
CFOs may not immediately be able to translate the technical terms that CIOs use among their peers. At the same time, it may be hard for CIOs to communicate the value of IT in a bottom-line way the CFO immediately “gets.” The key? To establish a common, shared language around business value that both sides can embrace. The good news, according to the Harvey Nash/CIO survey, is that business intelligence and analytics has surged in importance, IT budgets are growing, and the role of the CIO is becoming more strategic and networked than ever before — which means CFOs may be more open to understanding the language of IT.
4. Work Toward Common Goals
CIOs can focus on the technologies CFOs are interested in, in order to show how even wider investments can pay off, according to Gartner’s Financial Executives International (FEI) CFO Technology Study. For example, the study found that CFOs have a strong interest in cloud and mobile technologies to gain access to key business information using these tools. By building a relationship that hones in on those areas, CIOs can create a space for discussions about their own technology priorities.
5. Measure Together
Even in today’s era of digital disruption, CIOs may struggle to communicate the value of IT to their business leaders, including the CFO. According to Forrester’s Business Technology Value Scorecard, it’s essential for CIOs to link technology to external outcomes and risk mitigation in ways that the CFO can embrace. For example, traditional operational-level IT metrics may not fit the bill — while KPIs that focus on business value and results will.
6. Identify Industry Trends
Both the CIO and CFO are integral members of the executive team. They both need to identify and understand the latest industry trends in the other’s area of focus, even if they each understand them from different points of view. For example, the CFO must remain up-to-date, at a high level, on technology and digital trends — from data security to ERP cloud solutions — while the CIO has to be cognizant of the business implication of those trends.
7. Plan For the Long Term
According to Gartner, 95% percent of organizations that conduct long-range planning (five to 15 years) are more likely to outperform organizations that don’t plan ahead. That means long-term strategic planning by the CFO and CIO is an essential collaborative exercise, especially since the tech-buying process in organizations has become increasingly complex and team-based.
8. Engage, Engage, Engage
The State of the CIO 2016 found only 31% of CIOs collaborate regularly with the CFO in smaller organizations, while only 19% do at larger enterprises. At the same time, Gartner Research recently predicted that worldwide IT spending would top $3.5 trillion in 2016. With that kind of investment as companies walk the path towards digital transformation, CFOs can’t afford not to engage regularly with their CIOs, while CIOs have to do all they can to nurture this essential strategic relationship.
9. Take an Integrated View of Technology Investments
As the CIO looks to lead the IT journey from technology provider to value-focused business partner, it’s essential to work with the CFO to create an integrated view of technology investments. According to KPMG’s whitepaper “Moving Information Technology from a Cost to an Investment”, that means managing those investments across several interrelated domains, including the technology portfolio as well as financial resources and business demands. Some of these areas are controlled by IT, others by the business — so all require ongoing conversation.
Today’s CIO embraces the C-Suite, creating meaningful partnerships to drive real business value. For examples on how you can effectively lead this change in your organization, download KPMG’s whitepaper “Tips for the Visionary CIO.”