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CIO role: 8 tips to get along better with the CFO
Do you feel like finance people are from Mars and IT people are from Venus? Here’s how IT leaders can strengthen this relationship - before digital transformation goals suffer
Friction between finance and IT is understandable: The two groups of people have historically felt at odds with each other in many ways. “Finance’s complaints are that IT can’t meet deadlines, they go over budget, and they don’t deliver the agreed-upon functionality. As a result, finance may think that IT delivers reduced business value for more money and time,” says Matt Mead, CTO of digital transformation consultancy SPR. “IT’s complaints about finance are that they simply don’t understand, nor appreciate, the processes and unpredictability that occur in IT.”
“This requires a close partnership and understanding of the CFO’s role and responsibilities,” says Michael Weingartner, CTO at travel and expense management services company SAP Concur. “In order to implement innovative technology that benefits a business’s bottom line, CIOs will need to understand CFOs’ priorities, as well as be able to articulate the ROI of their IT decisions. By working together, CFOs and CIOs can identify more integration opportunities to implement innovative business tools that support growth.”
[ What’s next for the CIO role? Read also: CIO role: Everything you need to know about today’s Chief Information Officers. ]
It can feel tough seeking time and funding for digital experimentation from a finance group that’s focused on controlling costs and deadlines. But you can take a number of actions to build a more productive relationship with the CFO and their staff. Consider this advice from IT leaders who’ve done it:
1. Present all IT projects with an ROI
Sure, many digital projects are moving targets. Some may actually cost the business money in the short term in the hopes of a much larger payoff later. Regardless, you need to make the financial case. “Articulate hard and soft benefits and present the accountability matrix for how these will be realized and tracked,” advises Dave Castellani, senior vice president and business information officer for New York Life.
“If a project has a negative ROI, present the risks associated with deferring [it]. If a project can’t mitigate a measurable risk or show a positive ROI, perhaps it should be killed.”
2. Use agile approaches where possible
While IT project success rates have improved over the years, just 36 percent of IT projects were delivered on time and on budget, according to the Standish Group’s 2018 Chaos Report. It’s no wonder CFOs have concerns about investing in IT. Agile projects, however, are two times more likely to succeed, according to the report.
“Start by making sure projects are using a modern agile approach and place all high-risk activities early in a project’s life cycle. That way, if a project isn’t going to be successful, it can fail fast rather than at later stages in the project,” Mead says. “A CFO will appreciate if you can do everything in your power to reasonably control risk.”
3. Speak in the language of finance
“Any project should be discussed in terms of investment, business value, and risk,” Mead notes. “Having a conversation that is solely technical will not be productive.”
4. Capitalize on digital finance projects to build trust
“With the rise of cloud-based solutions to manage spend, CIOs and CFOs are already forging new relationships,” Weingartner says. These initiatives can foster goodwill, understanding, and – ultimately – a more productive relationship between IT and finance.
5. Be ready and willing to educate
Never assume the CFO doesn’t care or wish to know the details of IT operation and strategy, says Castellani. Helping finance leaders understand the nuances and complexities of IT can enable them to more effectively go about the job of managing money and financial risk strategically.
6. Practice empathy
“Just like in any relationship, it is important to consider the other person’s situation, goals, and objectives,” Mead says. To that end, seek continuous alignment with the CFO. “Make sure that you understand finance’s strategic priorities upfront and validate them each quarter,” says Castellani.
7. But don’t be afraid to disagree
It’s important that finance understand the many factors that can impact a project’s financial importance, says Mead. That may require some uncomfortable discussions. “There should be healthy contention, debate, and disagreement,” says Castellani. “Agree on items to agree and disagree on.”
8. Never deflect or avoid hard truths
Don’t minimize budget overruns or undelivered outcomes, says Mead; that will not win IT any friends in the finance function. Be as transparent as possible, Castellani advises, “[and] present bad news quickly.”
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