Earlier this year, I visited with Gina Mastanuono, CFO at ServiceNow, which gives a cloud platform that allows companies regulate electronic workflows. As a former CIO, I recounted my early ordeals to her about CFOs who were being skeptical of new IT projects, and whose objections were being a consistent presence in spending budget funding conferences.
Mastanuono laughed. “That’s so outdated faculty!”
“Today, CFOs roles have altered substantially,” she explained. “As CFOs, we acknowledge that we just can’t just live in the fiscal globe. We must be business strategists, able of main our companies by a disaster like COVID, but also knowledge how we will come out potent on the other side by strategically supporting innovation.”
It was a breath of contemporary air to listen to Mastanuono — nevertheless in the again of my intellect, I still puzzled if it was actually “old school” for CIOs to understand the CFO as a task blocker and a skeptic.
Seemingly, I’m not the only one particular.
“Ninety-6 per cent of study respondents described that CIO and CFO collaboration is significant to IT transformation accomplishment,” noted Anna-Lee Muck, an editor in main for Dell who was reporting on a Dell study. “However, a disheartening 89% cited major limitations — ranging from out-of-date tips about the part of CIOs to obsolete reporting constructions — to this collaboration.”
Out of date reporting framework is effectively understood by CIOs, wherever normally the CIO must report to the CFO as a substitute of to the CEO. Early in my CIO career, I dealt with this reporting framework and it stifled me to the stage of making me established to get out from less than it. So I used for a CIO situation with yet another firm wherever I described right to the CEO and I felt I would have far more autonomy and influence.
I was ideal about that — but I still experienced to meet with the CFO to get matters completed — so I established to find out far more about our different strategies of viewing the globe.
“CIOs are far more most likely to be pioneers and/or integrators, even though CFOs are far more most likely to be guardians and drivers,” in accordance to consultancy Deloitte in a description of different company individuality forms. “Pioneers are novelty-searching for, they like getting a wide range of options, generating new ideas….On the other hand, the guardian individuality values framework and loyalty, are substantially far more methodical, depth-oriented, and maybe a tiny far more threat-averse.”
I identified this to be real from my have encounter. Even so, I also figured out above time that I could respect these variations. The CFO could also bring effective fiscal and price tag insights into projects that would help us body up superior benefit propositions for technological know-how vendors when they were being doing the job to get paid our business.
“CFOs recognize that they have to modify and grow their capabilities,” explained Mastanuono. “The present day CFO understands technological know-how and how it can remodel the business. He or she also demands to recognize the long term of what finance will look like, and be a transformer of folks, procedures, and devices. The CFO must shift from being a reactive to a proactive collaborator so the conclusion business can be positioned to have the ideal devices and data at the ideal time. Breaking down silos and establishing empathy and cross-practical collaboration are prerequisites, and the CFO-CIO relationship is a significant piece.”
Provided this, what can CIOs and CFOs do to get the ideal out of the CIO-CFO relationship for them selves and their companies?
- Fully grasp wherever the other person is coming from – Progressively, CFOs bone up on IT even though CIOs find out finance. In the two situations, it’s not to become an qualified in yet another field. Instead, the objective is to create enough doing the job know-how of the other field so they can be conversant. CIOs, for case in point, should really be capable to recognize company fiscal stories, the company’s fiscal problems, and what the repercussions are most likely to be for any IT task extensive right before the task is offered for funding.
- Meet frequently – In the past, it was not unheard of for CIOs and CFOs to get with each other during budget planning period, but rarely at any other time. Even so, there is a true reward in keeping “connected” year-round by collaborating on business strategies that engage the two finance and IT. “By aligning finance and IT at the get started of just about every task, you get highest business benefit,” explained Mastanuono.
- Co-create recommendations for investments – Virtually each business expenditure right now has a technological know-how element. In this setting, CIOs and CFOs can look at features this kind of as return on expenditure (ROI) or the administration of task challenges that could effects financials down the road. They can also look at hidden income prospects and decreased costs that can come about with the ideal technological know-how investments. CFOs can give suggestions on how to ideal set up the funding of a task. Does it make feeling to operationalize a task spending budget in a year in which the business is executing effectively? Or is it far more prudent to amortize the task technological know-how shell out above time so the total fiscal effects can be unfold above numerous several years?
- Collaborate on a framework for IT expenditure governance – If CFOs and CIOs can create a popular strategy to IT investments that appears at strategic challenges as effectively as advantages, it creates popular ground for task discussions and evaluations. That can make improvements to the conclusion outcome for the business. Threats being appeared at could be fiscal, but they could also relate to other places, this kind of as IT stability, or the viability of favored vendors and systems to endure as companies for the extensive haul. In a dialogue this kind of as this, technological know-how investments should really be prioritized in accordance with demands of the in general company business course. Prospective regulatory and shopper challenges and challenges can be reviewed, as can the threat of lengthy integrations with devices of file that must be undertaken by IT at the cost of other projects.
- Evaluate for business outcomes – At the onset, each task has an predicted rosy outcome—but some projects do superior than some others above time. By preserving a finger on the pulse of concluded projects and what they are delivering to the business, the two the CFO and the CIO can meet and appraise what worked and what disappointed, then find out from there. “An case in point is a recruiting program that IT installs for HR,” explained Mastanuono. “The CIO may possibly imagine of the task in terms of it being productively put in. But the CFO may possibly ask, is attrition down considering that we have been applying this program? And if attrition is down, how is that influencing the bottom line?”
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Mary E. Shacklett is an internationally recognized technological know-how commentator and President of Transworld Info, a marketing and technological know-how expert services company. Prior to founding her have business, she was Vice President of Solution Exploration and Computer software Advancement for Summit Information and facts … Look at Comprehensive Bio
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