For the CIO, chief financial officers have historically been adversaries at worst, obstacles at best. This magazine has done more than a few articles on how to relate to the CFO (see a list of those articles at www.cio.com\/printlinks). Although fewer CIOs are reporting to CFOs these days, the moribund economy and the tightening of the expense screws have once more pitted the CFO against the CIO. Again we leap to the rescue with advice on how to work well with CFOs. But this time the wisdom comes not from one side or the other, but from people who have simultaneously occupied both roles and seen the conflicts and solutions through one pair of eyes. David Goltz and Vincent Laino both fill a dual CIO\/CFO role at their respective company?Bethesda, Md.-based Destiny Health insurance company (where Goltz was interim CIO through June 2002) and West Chester, Pa.-based environmental consulting service Roy F. Weston. Here they offer CIO readers their unique perspective.\n\n \n\n\n\n\nCIO: Where do CIOs and CFOs get disconnected? What are the typical points of disagreement?\n \n\nGoltz: It\u2019s pretty straightforward. CFOs always look at [a proposal] and say, What\u2019s my return on investment? How can I make this pay for me? CIOs are typically saying, If I spend this much more on technology, I can deliver this wonderful functionality or product or service, though nobody can say, Here\u2019s how much time and money it\u2019s going to save. So to the CFO, it looks like technology for technology\u2019s sake, without any real gain for the company. And the reality is, in some cases it is technology for its own sake. But on the other hand, technology is a fact of business life; you have to have it in order to provide a certain level of service or access to your constituents and customers. Some of it is just overhead you have to have.\n\n \n\n\n\n\nWhat\u2019s the most effective way for the CIO to communicate with the CFO? Particularly when it comes to getting a budget or project approved.\n \n\nGoltz: The most obvious approach is to say, Look, we need to spend money on this project; this is how it will support our business objectives. Some IT projects have that immediate impact. But the next level of difficulty?and this is where you\u2019re going to have to educate the CFO?is when you have to spend money to stay in stable technology. If you buy a PC today, it\u2019s shipped with Windows XP; it\u2019s not NT anymore. So at some point we\u2019re going to have to move all of our PCs to XP in order to keep a stable platform. The question is, When do you do it? What\u2019s it cost?not just in terms of the cost of the software, but also what we\u2019re spending in terms of support and so on? Then, the best approach is to come into the discussion with your CFO armed with lots of information: If we upgrade now, here\u2019s what it will cost, and here are the savings we\u2019ll have for supporting a single platform instead of multiple versions. But here are the risks: XP is not the most common operating system out there. So you\u2019re presenting it as a business case, even though it\u2019s not always about ROI specifically. \nLaino: You must be able to have the conversation around value?not numbers, but value. For example, we worked on a portal project last year, allowing employees to customize our website for their individual use. You have to do a prototype, and sit down with the people in senior functions and say, This is what I think is going to help you do your job every day. Am I close? And have that kind of open conversation about the benefits of what you\u2019re creating. If you get their buy-in?Yes, that would really help me?then you can drive down to the math, figuring out how much time it\u2019s going to save every day. Then it\u2019s just a question of whether we have the money to get the project done this year.\n\n \n\n\n\n\nBecause of the economy, one could assume that CIOs and CFOs alike are focused on ROI. Yet there\u2019s also an IT spending backlash due to years of heavy investment and disappointing return. So are CIOs and CFOs on the same page, or are they still locking horns?\n \n\nGoltz: The successful companies in the long term are going to be the ones that say, I\u2019ll live with not quite the profits I might have had, and I\u2019ll invest in technology, product development and things that will carry us into the future. Some CFOs understand that. But if they don\u2019t, then the CIOs should be locking horns with them right now. \nLaino: That makes sense, and I\u2019ll give you an example. We\u2019re working on a learning management system. Right now I probably can\u2019t fund that project. I can fund a piece of it but not a lot. We\u2019re looking at what it\u2019s going to cost us to: A. put the infrastructure together, meaning the learning system itself; and B. fill in the infrastructure with content. My guess is that this will be a three-year project, and we may do 10 to 20 percent of it this year, depending on how well we do as a company. Those conversations are happening now on a rolling quarterly basis, so we can anticipate the need for cash flow and forecast when we want to spend this money. \n\n \n\n\n\n\nSo today there\u2019s still debate between CIOs and CFOs. What is the CFO really looking for? How does the CIO make the CFO his ally?\n \n\nGoltz: CFOs typically look at business plans and the intentions of the business, and then they spend their time building a budget and capital allocation plans behind that plan: Here\u2019s how we\u2019re going to grow our business, here are the sales targets and expectations. They do a functional analysis and ask each department or area, including systems, What is it you need in order to be able to support this plan? To get the CFO on your side, the best thing you can do is understand that business plan and the dynamics and the cost structure of whatever your particular function is. Know what it\u2019s going to cost to build each piece, and always have options. Don\u2019t paint yourself into a corner and say, This is the only way to do something?unless of course that\u2019s truly the case. To have the CFO in your corner, you want to present a recommendation but also give options. The recommendation part is important. The worst thing you can do is go to the CFO with options but no recommendation, because then the choice is always going to be whichever option is cheapest. The more information you can provide them so they can make an informed decision and the more you support the business strategy, the more they\u2019ll be your ally. That\u2019s good advice no matter what your position is.\nLaino: There are a lot of technical decisions you have to make about the infrastructure. And those things are very hard to present because people don\u2019t see direct value. I\u2019m upgrading to Windows 2000 because I need to keep a stable platform to provide all these services, and the natural response is, But the services have been stable for two years; I don\u2019t see why we have to spend money on it. However, I\u2019ve gotten to the point where I have an annual range of dollars to do infrastructure work, and it\u2019s not questioned. I rolled it up into one big infrastructure project, the network, the data storage, and said, "Here\u2019s our infrastructure upgrade project for the next year, the sum total is $700,000," and I don\u2019t even do an ROI anymore. That\u2019s because of my relationship with the senior leadership team. If the cost is within your decision-making authority, you can go ahead and do it. \nGoltz: This is where the typical CIO fails: They don\u2019t [establish that credibility by] looking at technology in the scheme of how the company wants to position itself. The best CIOs understand that and say, I don\u2019t need the latest version of Oracle. I don\u2019t need to be out there pushing that. We\u2019re a health insurance company with a leading-edge product, but I don\u2019t need bleeding-edge technology to deliver it. \n\n \n\n\n\n\nWhat else do CIOs do that drives CFOs nuts? \n \n\nLaino: Whether you\u2019re in the CIO role or any significant leadership role, you can\u2019t do the job in a vacuum. If you make decisions about things that impact many people without getting input, you\u2019re going to fail. This is something that frustrates me even among my own IT staff. We\u2019ve got maybe a dozen corporate reengineering initiatives right now, and we haven\u2019t been looking at the impact of the sum of all this on the folks who have to go out and earn money every day?those who have to change their processes or workflows. So we\u2019re stepping back to make sure we\u2019re not asking the same person to do 15 different things at once. \nGoltz: There are CIOs who think they\u2019re building software to save the world. They get all bound up in rational unified theory, system development life cycles, release management. All those things are great if you\u2019re a software development business, but for me, I don\u2019t care. The real question is, How does that move our business forward? So CIOs who can\u2019t move beyond that are difficult to deal with.\nThen you get CIOs who just want to say they\u2019ve got the latest and greatest technology. Guys come up with solutions that are killing a fly with a stick of dynamite. I understand that people in systems push hard because they want to be on the bleeding edge, to do the latest and greatest thing to advance their careers. But that doesn\u2019t help the business. It\u2019s difficult to balance those needs, but CIOs have to do it. \n\n \n\n\n\n\nWell, since you\u2019re filling both roles, presumably you can avoid that conflict altogether. Do you cut your CIO-self any slack when it comes to cost-justification and budgeting?\n \n\nGoltz: That\u2019s absolutely the case. Systems people come to me on a day-to-day basis for stuff they know they need, and if the cost is reasonable, I just tell them, "Go." If I were solely the CIO, I probably couldn\u2019t do that. As CIO and CFO I can, up to a certain spending level. And they like that. But getting back to the issue of making the CFO your ally, your ability to commit funds and resources to projects is far greater if you\u2019ve built the credibility. Once you\u2019ve established that credibility, the CFO isn\u2019t going to get in your face. They\u2019re just going to ask, How are we doing against what we said we would do?\nLaino: In a sense I cut some slack in that I don\u2019t have to do an ROI on every single project. But understand that the areas I\u2019m responsible for account for something like $10 million in expenses, and I have to stand up for that in front of 13 other executives. Other people in the group stand up and say things like, We\u2019re delivering $4 million of profit margin to the company this year, and I\u2019m standing up saying, I\u2019m spending $10 million of that margin. I\u2019m accountable for that, so I have to be sure that I\u2019m delivering the right, high-quality services. If I do my homework and build my budget numbers through conversations with the guys who report to me, it\u2019s not a tough role.