5 Ways CIOs and CFOs Can Build a Stronger Relationship

No matter what industry you're in, technology is becoming integral to everything you do. Whether it's streamlining existing internal processes, developing new products or service offerings or boosting the customer experience, taking advantage of the latest tech innovations will be vital to the success of any firm.

But as this digital transformation becomes a key part of every firm's strategy and demands for greater investment in technology innovations grow, this is likely to put the IT team on a collision course with the finance department.

These teams have frequently come into conflict in the past, with both often feeling that the other doesn’t appreciate them. This often results in finance teams complaining about budget and deadline overruns. At the same time, IT teams argue they’re not getting the support they need from finance professionals who don't understand the complexities involved in the development process. But as IT departments are increasingly viewed as drivers of value rather than simply cost centers, these relationships must evolve.

Why the CFO-CIO relationship matters

There are many reasons why it's vital for the chief information officer (CIO) and the chief financial officer (CFO) to work effectively together. As technology is put at the heart of organizational growth, there’ll be no avoiding each other, so taking steps to smooth out some of the most common causes of friction is crucial.

Forecasts from Gartner suggest global spending on IT is set to reach $3.9 trillion in 2020, an increase of 3.4% from last year, and will surpass $4 trillion in 2021. With so much at stake, firms can’t afford fighting or miscommunications between the departments that will hinder these projects.

If CIOs and CFOs are able to get along with each other and set realistic expectations for projects that everyone agrees with, businesses will be in a much better position to make the most of new innovations.

This allows businesses to be more strategic in their decision-making, better manage risks throughout the project and help ensure IT teams have access to all the resources they need. Meanwhile, finance professionals can be confident such projects will show a clear benefit.

So what can CIOs and CFOs do to improve the way they work together and build strong relationships?

1. Place ROI front and center

The first step will always be to ensure that IT can show a clear justification for its plans, and this means presenting the finance team with straightforward, measurable projections for return on investment (ROI). Demonstrating that this has been factored into their thinking from the start will go a long way to getting the finance department on board, as they’ll be able to point to concrete performance indicators to determine the success of a project and its benefits to the business.

2. Speak the same language

A common source of tension is that IT and finance can appear to be focusing on different things. To address this issue, it pays for CIOs to learn and use the language of the finance department. This can mean talking about their work in terms of business value and risk, rather than technical intricacies. However, this works both ways, and it can also pay for CFOs to take the time to familiarize themselves with key IT concepts.

3. Sit at the same table

Being able to physically sit down together and discuss proposals for investment is another key way to improve the CFO-CIO relationship. In many companies, it may be the case that the CIO works in the background, while only the CFO is present in top-level decision-making meetings. However, having both parties involved ensures both departments can offer their perspectives and make their voices heard, while any queries or disagreements can be cleared up before they become major sticking points.

4. Be ready to teach - and to learn

While focusing on the hard numbers of an IT project may be an effective strategy, CIOs shouldn't assume the finance department won't be interested in the details of their strategy. Indeed, helping them understand some of the complexities of IT can help provide vital context to discussions and damp down any unrealistic expectations. For CFOs, it's also important to engage with the IT team to understand how IT affects the business beyond the balance sheet.

5. Embrace agile approaches

When it comes to the development process itself, adopting an agile approach is likely to improve relations with the CFO and ease concerns about the prospects of failure. One of the main benefits of this is that it makes it much easier to evaluate and make adjustments as you go along, as well as allowing you to focus on the highest-risk aspects early.

This means if you do fail or need to make changes, you can do so quickly without endangering the entire project. Indeed, agile development can make projects twice as likely to succeed as those that follow the waterfall method - something the CFO will greatly appreciate.