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A strong CIO-CFO relationship has become critical for enterprise success as organizations speed delivery of their digital initiatives while also using technology to deliver efficiencies.
"There are so many important C-level relationships," said Chris Stephenson, national managing principal and leader of product innovation at the accounting and advisory firm Grant Thornton. "But if you want your organization to invest in the right places and have the most impact, [the] CIO and CFO must work together and speak the same language."
What does that mean in practical terms?
It means that CIOs and CFOs work together to translate business problems into concrete technology and funding plans, Stephenson said.
Why digital success requires good CIO-CFO relationships
Arguably every business depends on digital technology to some degree, which also means their financial health is also reliant on tech.
"[Both CIOs and CFOs] have a bird's-eye view of the company," said Chris Bedi, CIO of ServiceNow. "If the partnership is humming, it's like a force multiplier."
Bedi said he works to keep his relationship with ServiceNow CFO Gina Mastantuono strong by articulating the business value that technology-related investments deliver, calculating returns on investments and being transparent with the IT budget. He also focuses on executing initiatives to stated objectives within the expected time and budget.
All that has helped build trust between him and the CFO, which in turn fuels collaborations that deliver even more benefits to the business, Bedi said.
CIO-CFO relationship challenges remain
Not all is rosy when it comes to CIO-CFO relationships.
CIOs and CFOs both understand that technology investments are less costly than choosing not to innovate or modernize, Stephenson said. But that's where alignment ends for some CIOs and CFOs. For them, disagreements over where investments should be made and how much those investments will cost result in stalemates rather than in constructive discussions and consensus.
Some trends are helping to end such problems, he said. For example, iterative development can reduce costs and produce quick wins. Those help to create lower-risk initiatives that are easier for the CIO and CFO to jointly support.
In addition, CIOs and CFOS have become more educated on each other's expertise in recent years, Stephenson said. CFOs, like all executives, are generally more tech-savvy now than they were in the past, while CIOs are generally more knowledgeable in both business and finance.
Still, tensions remain in some organizations.
Twenty-three percent of CFOs report that their relationship with the CIO deteriorated in the past year, according to the April 2021 "Global CFO Survey" from enterprise software company Rimini Street. Thirty-three percent cited the CIOs' lack of expertise in key areas, 32% cited inflexibility and 31% pointed to plans with no demonstrated ROI as the main reasons for the worsening relationship.
Some CFOs don't support the CIO's spending needs.
"We've seen CFOs exert their influence over the budget and put up constraints," said Marc Tanowitz, managing partner in the advisory and transformation division of West Monroe, a national management and technology consulting firm.
But such cases aren't the norm, Tanowitz said.
How to strengthen the CIO-CFO relationship
More CIOs and CFOs are supporting one another, largely as a result of a shared interest in digital technologies and digital transformation. And both can capitalize on that shared interest to forge a stronger relationship.
Eighty percent of CFOs list digital transformation as one of their top five priorities, according to the Rimini Street survey. That report also found that 71% of CFOs believe digital investments are key to their organization's success and that 77% would help their CIOs find ways to fund new transformation projects if those initiatives showed promise of delivering strong returns.
CIOs and CFOs can work to further align on which technology investments maximize the benefits to the organization.
"CIOs and CFOs should be able to sit down and have a conversation," Tanowitz said. "If they can, then the business can achieve its highest potential."
CIO-CFO collaboration is critical for organizational success in this digital age, said Khalid Kark, director with Deloitte and research leader with the firm's US CIO Program.
"If the CIO isn't able to get the funding and strategic investment parts right, they're going to be viewed as primarily tech managers," Kark said. "To be strategic and to think about value that's being driven through technology investments, CIOs need to understand and work with their CFOs."
He and Ajit Kambil, Deloitte's CFO Program research director, both said communication is key to strengthening the CIO-CFO partnership, so they can align the organization's technical journey, its business objectives and the investments required.
CIOs should include their CFOs even in the ideation stages, Kambil said.
"It's bringing the CFO along earlier to understand the opportunities and risks," he said.
The Deloitte CIO and CFO research directors share another core belief.
CIOs should have CFOs co-sponsor technology-driven initiatives to help ensure they stay focused on delivering the business value sought and developing the metrics to prove it, Kark and Kambil said. CIOs can work with their CFOs to develop more modern metrics -- perhaps around customer engagement or speed to market -- that better measure IT's value in the digital era.