The world of business is like a playground.
Well, it should be. Work would be a lot more fun if that were the case.
Playgrounds not only conjure up instant memories but a wealth of communal metaphors applicable elsewhere in life.
Consider the activities of tug of war and the merry-go-round. Each is fun and entertaining, but as multiplayer activities, the end goals are much different. Two sides in tug of war are pitted against each other, each trying to force the other to go in the opposite direction they wish. In the end, there’s a winner and a loser. With the merry-go-round, everyone who joins in is working together to move faster and faster in the same direction (sure, it’s a circle, but don’t dwell on that part of the analogy).
In business, the two C-Suite positions best suited to steer a modern organization’s strategy are its Chief Financial Officer (CFO) and Chief Information Officer (CIO). The success of that strategy hinges on whether the folks in these roles ride the merry-go-round or take sides in tug of war.
Transformation Needs Collaboration
Today’s world of digital transformation demands a strong finance-IT relationship with both organizational leaders inhabiting the role of strategic business partners. The initiatives necessary to ensure the success of these transformation efforts require a close working relationship between a company’s CFO and CIO. Typically, these initiatives focus on:
- Updating internal legacy systems
- Increasing business agility
- Improving business processes
While a need for CFO-CIO collaboration is generally agreed upon, historical markers indicate there’s been a bit more tug of war time than spins on the merry-go-round. A recent Forbes Insight Report highlighted that although nearly all respondents (96%) concurred CFO and CIO collaboration was critical, close to the same amount (89%) said significant barriers prevented that cooperation. That’s stunning.
Another indicator, albeit in small sample size, was the feedback by respondents to a Deloitte webcast some time back, titled “Forging a New CFO-CIO Partnership – The Rise of the Chief Integration Officer.” Less than one-third of that audience said the CIO and CFO at their company shared a strong partnership of mutual understanding.
The Forbes report noted most reasons for this strain were centered around cost control and budgeting. While, the piece noted, CIOs struggle with communicating the ROI of IT projects, as well as priorities and costs, CFOs, with eyes laser-focused on the firm’s financial health, expect their IT counterparts to provide a clear business case for investments.
Complications For the Dynamic
A couple of major occurrences have added an extra layer of complexity to the CFO-CIO dynamic, one dated yet here to stay and the other incredibly fresh, but semi-fleeting – we hope.
The predominant corporate shift to cloud operations over on-premise solutions requires a more fluid approach to thinking by those in the finance and IT head offices. This transition involves a shift in IT spending and budgeting processes, which have required finance and IT teams to meet each other halfway, so to speak. They’ve needed to learn how to speak each other’s languages. Historically, a big barrier in this business partnership has been an insufficient understanding by CFOs of IT issues.
Amid today’s COVID-19 pandemic era, every CFO has spent most of his or her waking hours scrutinizing all aspects of company spend to ensure long-term survival. However, properly assessing a company’s financial position depends on accessing the right data, especially with the exploded role data plays today, so a true partnership with the CIO has never been more necessary.
No Longer In the Background
IT is no longer confined to a background cost center, but the vital business operation responsible for housing, manipulating and making available data that runs and grows any business.
In more basic terms, today’s digital approach to business strategy means CIOs aren’t just “the IT guys” anymore. This role has taken on a heightened position to become a stakeholder in almost every key decision a business makes. And, all the other C-Suite executives – especially CFOs – need to take an active interest in IT.
As digital strategies become increasingly more critical to business growth and bottom-line importance, the overlap between CFO and CIO will only continue to broaden.
Here are a few helpful tips to strengthen this relationship for the benefit of your business:
- Treat IT costs (software, security, infrastructure) as operational expenditures, rather than capital expenditures. This helps to reframe these as ongoing contributions to progress.
- Establish a common language so CIOs and CFOs can discuss IT initiatives with the same goals, improvements and ROI in mind.
- Ensure CIOs and CFOs approach digital innovation, such as cloud technology, data analytics, etc., as a shared interest and agree to joint decision making.
- Make sure CIOs are looped in with other executives on key decisions, especially those where business objectives require new technology.
Back to the playground. Recall your own times there. Moving around the merry-go-round is not nearly as entertaining when you have to do it alone. Everyone needs someone to help them, to make it go faster and stay spinning at dizzying speeds for a longer period of time.
That’s not just successful, but way more fun.
Regardless of which office you inhabit, there’s a guide tailored to help you better manage your order-to-cash process and simplify modern billing challenges.