A Strong Relationship between the CFO and CIO is Imperative
Traditionally in business, CFOs and CIOs have not had a strongly collaborative relationship. Often, a CFO’s involvement in technology began and ended purely with budgetary concerns—cutting costs and preventing unnecessary spending. But this relationship is becoming increasingly important in today's world, where technology drives almost every department of a company, and CFOs are taking note. Technology has the power to completely transform an organization, and not staying ahead of the curve on updated technology can severely handicap a company’s progress. The CFO, who is the ultimate decision maker for spending, needs to understand the goals and motivations within the IT department in order to help the company make the best decisions.
Technology is arguably the most important part of many growing companies. It can give a firm the advantage over its competitors: whose mobile app is easier to use? It can improve customer service: decreasing wait time for help calls or chats so customers are not kept waiting around. It can increase employee efficiency, streamline processes, provide better data organization—the list goes on and on. Without investing in the IT department, a company may quickly fall behind both competitively and financially. By partnering together, the CFO and the CIO are able to implement IT projects that are both high quality and cost efficient. Each must understand the motivations of the other in order to ensure that the most important projects can be completed in a way that makes the most financial sense to the company.
Typically, the CIO can understand the motivations of the CFO a lot easier than vice versa, and it’s easy to understand why. Thus, the most crucial component of a successful relationship is for the CFO to wholly understand the issues and goals of their IT department. This is by far the biggest barrier that needs to be breached in order for the two departments to work cohesively together. The role of technology changes quickly and drastically, and key decisions can be make-or-break. The early and active involvement of the CFO within the technologies team will ensure mutual understanding that will drive business forward. CFOs and CIOs need to collaborate from the beginning, so that a lack of understanding does not become an obstacle.
If a CFO can understand the benefits of IT projects, their scope and potential effects, the cost can be better understood and managed. With proper understanding, the CFO can help guide IT towards the best financial decisions while also not sacrificing progress or innovation. The CFO cannot make accurate decisions on where spending should happen and where investments should be made if he or she does not fully understand the benefits and risks associated with IT products and changes. And because technology is increasingly becoming the major cost center for many companies, it’s where the CFO is already spending a lot of his or her time.
Technology has the power to drive the strategic goals of the whole organization, so it's imperative that CFOs get involved early and often, and strive to understand IT goals and their relationship to the company’s goals as a whole.