A strong partnership between the CIO and the CFO can help drive growth and innovation. CFOs and CIOs recognize the necessity of having a good working relationship. Despite this, the two roles frequently follow opposite paths today: one on a straight and narrow path going at a fixed speed with established milestones and the finish line in sight, and the other sprinting through twists and turns with the destination yet unknown.
The CIO-CFO relationship is complicated by a number of issues, including the shift from project-based to product-centric delivery, which has posed a challenge to traditional funding models due to the need to be funded on a continual basis. CIOs are also assuming a prominent role as key strategists and orchestrators of unparalleled transformational change, cementing a direct route to the CEO and, in many circumstances, sharing focus with the CFO.
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There are numerous ways for CIOs and CFOs to collaborate to drive development and innovation, but they must first get to understand one another. Here are some factors to help CIOs improve their relationship with their CFO.
Technology outcomes need to be translated into business outcomes
CIOs typically demonstrate value with dashboards and KPIs that have little meaning to CFOs. Any cost that the CFO doesn’t value or understand is a cost that has to be managed downwards. That’s why it’s critical to talk about value in terms of stakeholder outcomes rather than technical outcomes.
CIOs should figure out a means to explain why and how technology investment affects the outcomes that matter to CFOs.
Decision-making should be delegated to those who are accountable for outcomes
When CIOs delegate more decisions to those most responsible for outcomes rather than placing authority away from where actual work is done, the task of translating becomes easier.
To produce greater transparency and feedback across operations, CIOs should create a 360-degree view of decisions, crucial performance metrics, and key-prioritizations. They should integrate all stakeholders’ interests to consistently prioritize numerous trade-offs and manage opportunity costs. All of this contributes to a culture of shared accountability, which reduces friction and increases operational lift while achieving common goals.
Budget commitments and risk need to be balanced
CFOs need to be more comfortable with the iterative nature and inherent ambiguity of digital initiatives.
CIOs will ensure that the investments made yield results. It will just be done in a different way. CFOs may lose control over how much value is derived or how quickly they can acquire the value and advantages in the future.
CIOs can help CFOs when working on iterative initiatives by committing to a fixed budget, no cost overruns, and delivering value in a fixed timeline, even if they are unsure where the value will come from. They will rely on their trusted teams to figure out where it is coming from, and then iterate to find other places where they can add value.
Improve the tech team’s financial knowledge
Not many CIOs have someone on their team dedicated to funding, and the financial impact of IT. To support that activity CIOs need to build competencies in their team.
CFOs should also build competencies in comprehending IT strategies. Together with corporate executives, the three can be extremely effective in advancing a different type of organizational and operating model in the future.
Regularly and publicly communicate with the CFO
Personal engagement and communication, as well as the frequency and method of such communication, are important in the CIO-CFO relationship. Zoom calls and online chats have been the mode of communication in the past 18 months, but as restrictions ease, face-to-face meetings between the CFO and the CIO can further strengthen the partnership and send a strong message to the entire organization that they are aligned.