Either heart-to-heart chat or CFO-friendly approaches, the CIO and CFO are both strategic allies and complimentary partners.
According to industry survey among both IT and financial decision makers, there's an information gap between CFO and CIO that burdens the relationship. There's been a lot said about the CFOs role as limiting factor for IT impact on the business. Therefore, transparency and speaking the same language is an important start. As CIO, how do you discuss IT strategy and vision with the CFO? How to make the inevitable IT budget "negotiation" easier?
- Every CFO is coming from a different perspective. The CIO must understand that perspective as the CFO is his/her customer. CFOs approve budgets, and CIOs and CFOs (arguably) approach the business differently. Whether it is an accounting project, HR, Customer Service or IT infrastructure project, the decision to invest should be made based on the greater value of the enterprise.
- Innovation should be communicated in the context. Innovation needs to be business led and not technology led. When IT thinks clever tech thoughts, it's up to the IT leadership to sell the ideas to the business leaders. This is where good "biz-tech liaisons" are worth their weight to collaborate and build financially sound business cases around innovative ideas.
- A CFO may want to talk purely in terms of finances and risk. They're the customer, give them what they want. Stick with ROI and risk management and quantify the proposals in terms of greater efficiency, "strategic benefit", "future proofing" and "quality of life". Summarize your view of technology futures as versus the business - inflection points, timelines and related business risk in as simple of terms as possible.
- Regularly review the business basics with your CFO: budget, revenue oriented projects, board concerns, make sure all IT related contracts are clearly owned. Delegate related cost containment to procurement and the relevant product/service managers and business owners, learning from other centralized functions such as HR or finance about their budget planning as well. Communicate in terms of (internal) customer satisfaction and how it correlates with the budget. Focus projects on cost containment. Innovate on the removal of non-differentiating responsibilities.
- Align as much of your budget as possible with various business, product and channel leaders. Agree their part of the IT budget and their finance/analyst if they have one. You and the business leader tag team conversations with the CFO, making it clear that the budget put forward is required to support the business leaders’ revenue forecast, budget, and strategy. This demonstrates how IT is supporting each part of the business. Ideally, these are the business leaders in support with the CIO when you sit down under the CFO's budget microscope.
- Understand CFO’s ‘short term’ view with empathy, if his/her customers (BOD, shareholders, C-Level Peers) think quarterly, then he/she should (at least in part) as well. Phase IT programs, projects and initiatives into quarterly or annual bite-sized chunks to fit into your customer's (the CFO's) horizon. But also bring up long-term thoughts & visions with business leaders including CFOS, to give them more empathy about the CIO's role and struggles.
Either heart-to-heart chat or CFO-friendly approaches, the CIO and CFO are both strategic allies and complimentary partners. By working closely; they can transform IT from the cost center into value generator, and integrate IT into business seamlessly.