Launching an important new venture requires various resources, not the least of which is money. That’s why it’s important for a CIO to work closely with the enterprise’s CFO to ensure that adequate funds will be available to achieve success, even if initial cost estimates prove to be overly optimistic.
Technology has never been more important for business than it is today, and CFOs are finely attuned to the challenge, says Matthew Guarini, executive director of the Technology Business Management Council, a community of business technology leaders dedicated to advancing technology business management. “CFOs now prioritize technology over areas such as talent and supply chain, which demonstrates a significant shift in strategic investment focus toward technology for boosting growth and revenue,” he observes.
Working closely with the CFO allows the CIO to shift the perception of IT from a cost center to a strategic enabler, says Beth Weeks, executive vice president of development at project planning technology and services provider Planview. “CIOs need to be able to provide real-time visibility into delivery friction, bottlenecks, and flow metrics so they can present a clear, financial narrative that helps CFOs see what’s working and what needs reevaluation,” she explains.
A Mutual Partnership
CIOs can build closer partnerships with CFOs simply by providing full transparency into how tech investments create value for the business rather than just the IT department, Guarini says. CIOs also need to demystify tech spend by showcasing the value their investments deliver to the business in terms of revenue, productivity, innovation, risk reduction, experience, and sustainability. “With a clearer understanding of tech’s value and its drivers, CIOs can help their CFO counterparts create better strategies that deliver shareholder value while enabling more accurate budgets and forecasts for optimizing internal delivery.”
A CIO should work side by side with the CFO, particularly in terms of project funding, advises Uku Sööt, organizational growth strategist at communication and collaboration services IPB Partners. “It’s not only understanding tech, it’s also knowing more about the wider financial world,” he says. “Once CIOs and CFOs are on the same page, funding decisions can be based on a professional grasp of both the return on investment and financial priorities.”
Building an Alliance
To establish a strong relationship with the CFO, the CIO must avoid the prevailing attitude of IT versus finance while adopting a business-first approach, Sööt says. The first step should be learning the CFO’s priorities — cost control, risk management, and profitability — and then discussing technology decisions around those issues, he recommends.
Sööt recalls he’s personally achieved success by demonstrating to CFOs how IT projects can have a positive impact to revenue generation and/or cost-saving. “As an example, in a conversation on cloud migration project, I demonstrated how it can scale operations without spending more on infrastructure,” he says. “I always focus on establishing trust through alignment of technology and business objectives.”
Achieving a Balance
The biggest mistake CIOs make when working with a CFO is failing to understand what’s important to the business and the CFO, Guarini says. This can result in misalignment when the CIO is delivering on their plan, yet the strategy isn’t helping the CFO deliver on their goals.
Still, despite a CIO’s best efforts, it’s often not easy to handle a CFO who’s primarily interested in saving costs, Sööt observes. He recommends focusing the discussion on value rather than expenses. “I’ve encountered cases where the CFO was obsessed with the immediate cost of a certain project, yet I altered the course of the discussion by demonstrating the advantages of the long-term results,” Sööt says. “For example, with a client interested in using an AI-based customer support system, I focused on the lower long-term cost of customer service and the possibility of serving more customers without increasing the number of employees.”
Final Thoughts
The most productive CIO-CFO partnerships prioritize transparency and shared accountability, Weeks says. “When these two functions are working in lockstep, more strategic, confident investment decisions can be delivered across the enterprise.”
Building a strong partnership between the CFO and CIO is the ticket to technology success, Guarini says. “With the right data and insights from the CIO, CFOs can make more informed decisions about technology investments.”
People will never agree on everything, but the most important thing is to keep a conversation going, Sööt advises. “I always ensure that I keep in regular contact with the CFO, not only when there is a discussion of funding, but all along the project lifecycle,” he says. “Constant communication creates a long-term trust, and both parties will always be oriented toward a single final goal.”
