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A Schizophrenic CFO-CIO Relationship
One of the root causes of the frustration stems from the fact that when it comes to IT, CFOs serve multiple and often conflicting roles: CFOs are IT's business partner, banker, and in some cases, boss. This means that in a given work week, it's not unusual for CFOs to request additional IT support, cut the IT budget, and criticize the CIO's progress in strengthening the company's competitive position.
As a business partner, CFOs are not - and should not be - the CIO's top priority. And, for the most part, CFOs agree. They understand that front office investments should trump the back office. But CFOs are human. They hear about the promise of real time analytics at conferences and complaints about manual workarounds and multiple versions of the truth in staff meetings, and feel compelled to throw their requests in the demand queue.
In their role as the enterprise's banker, many CFOs are viewed by CIOs as adversaries, not allies. The two parties play an ongoing game of chicken with CIOs asking for more money and CFOs asking for more justification. This leads CIOs to offer up impressive ROIs and CFOs to dismiss the ever-elusive "R" and drill down into the ever-present "I".
As a boss, CFOs are often believed by CIOs to be more a hindrance than a help. Often, CFOs don't have the IT knowledge to serve as a sounding board and don't spend their precious leadership capital to open doors, twist arms, and forge cross-functional alliances to advance the CIO's agenda. This leaves CIOs on their own to exert influence with superiors who expect to be served rather than governed.
CFOs can help improve the CFO-CIO relationship by adopting an enterprise perspective, leveraging their authority, and getting smarter about IT:
• Adopt an enterprise perspective. As a business partner, challenge your people to identify IT-enabled opportunities that deliver benefit beyond the four walls of the finance organization or the company. For example, improving the efficiency of credit processing is good, but doing so while reducing the timeframe to approve and extend credit is even better. There are many good ideas on how to leverage IT, but the truly great ones change the company's products and how the company interacts with and services its customers.
• Leverage your financial authority on behalf of IT. As a banker, help your CIO strengthen the relationship between IT investments and IT returns by holding business sponsors accountable for realizing the benefits outlined in their business cases. To do so, ensure that project justifications outline the operational metrics that serve as leading indicators to projected financial benefits (e.g., improvements in cycle time, quality, accuracy, customer service, etc.) and that project plans incorporate baseline measurement and post-implementation monitoring.
• Increase your IT-smarts. As a boss, you need to lead, follow or get out of the way. If you choose to lead, increase your IT-smarts by reading, studying, attending conferences, participating in research consortiums, and getting hands-on exposure to the technology used in your company and others. If you choose not to get immersed in the IT world, then relinquish your supervisory role and arrange for the CIO to report to the CEO or, at minimum, have the freedom to act as if they do.
Of course, merging your multiple IT personalities won't miraculously heal the relationship if your CIO is in over his head. But, regardless of the case, doing so will help ensure that you are setting your CIO up for success rather than dragging him down.
This blog is re-posted with permission from cfo.com and CFO Magazine.