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Bridging the Gap Between CIOs and CFOs
Moving your business forward with its digital strategy requires common ground between technology leaders and financial decision makers. When the working relationship between the Chief Information Officer (CIO) and Chief Financial Officer (CFO) is strong, digital strategies are 51% more likely to be funded1. This indicates that a strong CIO-CFO relationship is key to developing digital maturity, which gives a company a distinct advantage over competitors.
What Is a Strong CIO-CFO Relationship?
Unfortunately, only 30% of CIOs and CFOs have “strong digital partnerships,” which Gartner defines along two dimensions2. On one dimension, strong relationships are characterized by high levels of collegiality as opposed to being adversarial in nature. This means that the CIO and CFO view each other as colleagues with a shared mission, rather than as opponents that they need to overcome.
On the second dimension, relationship strength is indicated when both parties have respect for the other’s areas of expertise and unique contributions to business strategy. This means that the CFO views the CIO as more than just a technology manager or budget owner, but also as an important part of the company’s larger strategic team.
Building Stronger Alliances Between the CIO and CFO
Recognizing the importance of collegiality and mutual respect is one thing, but developing these key dimensions of a strong CIO-CFO relationship is quite another. IT and finance are both complex specialties that require enormous amounts of arcane knowledge to master. This intense specialization can understandably lead to technology leaders and financial decision makers developing what seem to be different languages.
To support your company’s efforts to build mutual understanding and respect between IT leaders and financial decision makers, we have compiled the following collection of recommendations:
Involve IT Leaders in Strategic Planning
Involving technology leaders in strategic business planning has become essential in the digital age, as technology is integral to the core functions of most businesses. However, 66% of business decision makers reported routinely purchasing new IT without the involvement of technology leaders3. This problematic practice can not only lead to poor IT decisions, but also to limitations in an organization’s capacity to manage challenges related to new tech, such as integration difficulties and low adoption.
To illustrate, 89% of “collaborators,” or companies where collaboration between IT and financial decision makers is the norm, felt very confident or extremely confident that they could handle challenges related to new technologies4. On the other hand, only 55% of “non-collaborator” business leaders expressed such confidence, suggesting that when technology leaders are not involved in IT decisions, companies are more likely to struggle with their digital initiatives.
Approach Technology Decisions in Terms of Strategic Business Goals
Although it is problematic that CIOs are so often excluded from technology decisions, the reasons for such exclusion are concerning as well. Among decision makers who avoid consulting with IT leaders regarding new technologies, 31% state that they do so because IT leaders’ decisions are not aligned with their digital transformation strategy6. This illustrates how important it is that IT leaders approach technology decisions based on the business goals that non-IT departments are trying to accomplish.
Build Empathy and Understanding
When CIOs and CFOs better understand each other’s roles and challenges, their relationships strengthen; however, such mutual understanding is often lacking. Illustrating this divide, 94% of CIOs feel that they understand how technology impacts company financials; however, only 62% of CFOs concur that their counterparts have such understanding5. On the other hand, the same study found that while 80% of CFOs think they understand how to adapt financial management to support digital strategy, only 55% of CIOs feel the same.
Possible ways of building mutual understanding between CIOs and CFOs include job shadowing; for example, technology leaders may benefit from shadowing colleagues in departments like marketing or product development. Creating integrated teams or embedding IT professionals in different departments can also help with developing technology leaders’ appreciation for business needs that may be better served by new IT.
Develop Shared Metrics
Bring in an Interpreter
One final suggestion is to involve an “interpreter”: a technology leadership consultant who can help bridge the gap between the IT and financial decision-making sectors of your business. Technology leadership “as-a-service” provides companies with seasoned technology consultants who also possess in-depth understanding of business strategy. Because technology leaders have a foot in both worlds—technology and business strategy—they can foster communication and decision making that helps to align a company’s digital strategy with its business goals and financial realities.
NexusTek’s Virtual Chief Information Officers (vCIOs) provide executive-level technology leadership that helps businesses to bridge the gap between business strategy and technology, providing the expertise and guidance needed to get the most out of your digital transformation initiatives.
Would you like to take your company’s digital strategy to new heights?
1,2,4. Gartner. (2022, July 25). How your CFO-CIO partnership drives digital funding—Or not. https://www.gartner.com/en/articles/how-your-cfo-cio-partnership-drives-digital-funding-or-not?utm_medium=social&utm_source=linkedin&utm_campaign=SM_GB_YOY_GTR_SOC_SF1_SM-SWG&utm_content=&sf259316965=1
3,5. The Economist Intelligence Unit. (2018). From gatekeeper to enabler: The role of IT when digital transformation is the norm. https://impact.economist.com/perspectives/sites/default/files/eiu_bmc_from_gatekeeper_to_enabler.pdf