In an increasingly digital world, the roles of C-suite executives are constantly evolving. Relationships between departments are shifting, necessitating new approaches to the division of work and process management.
Part of this digital transformation is moving business software to the cloud. Not only does this change how services are delivered but it also affects how software is budgeted for.
The positions of Chief Financial Officer (CFO) and Chief Information Officer (CIO) are most affected by this shift.
This is why it’s important to evaluate how the CFO and CIO work together in your organization, as this has the power to dramatically influence productivity and the speed of decision-making.
In this blog, we will explore how to foster a positive working relationship between your CFO and CIO in the age of the cloud.
The Status Quo
Traditionally, the IT department has been responsible for the installation, monitoring, and maintenance of all business software. It’s not uncommon for the finance department to have to wait for IT availability to begin a new software deployment.
Historically, CIOs and CFOs have had a fraught relationship. They deal with two completely different sides of the business – finance and information technology – which have distinct goals, KPIs, and processes. In the past, CFOs “have worked to reduce risk and avoid overspending” and CIOs “have worked to wring as much as possible out of technology assets.”
However, as the business world shifts to the cloud, the CFO and CIO need to work together to support the success of the business.
The Value of Cloud
In the age of data, it should be the priority of both CIOs and CFOs to make well-informed business decisions. However, only a little over half of CFOs say they have the information they need to effectively make business decisions.
For many organizations, the cloud gives C-suite executives better access to their data through web-based interfaces. For CFOs, cloud software offers many benefits:
- Increased time to value – finance teams can manage their application, which means they can deliver valuable insights more easily
- Better support for business processes – allowing the finance team to manage their application enables the department to better support enterprise workflows
- Improved accessibility – finance professionals can access their data from anywhere, anytime, and on any device
- 24/7 availability – cloud vendors are invested in ensuring their product is always up and running
- Automatic software updates – the latest features and innovations are available instantly through automatic updates
- Security – the cloud offers the most current and secure environment for your data
The IT department and the CIO also stand to gain from the cloud, as it reduces the team’s responsibility in supporting finance applications and lowers overhead technology costs.
Cloud computing also offers CIOs an opportunity to transform their investments in corporate computer systems from capital expenditures into operating expenditures. This is where a partnership with finance can be beneficial, as finance leaders are best equipped to understand how to manage these costs.
CFOs and CIOs should also have a shared interest in risk management, security, and compliance, which are a critical part of the digital transformation of an organization.
“This shift is in its early days, but forward-looking CIOs are beginning to think of themselves as providers of services rather than infrastructure,” Bill Bulkeley, a former Wall Street Journal reporter, writes. “As such, they supervise operating expenditures, not capital expenditures, and they approach the CFO as partners, not supplicants, in business-investment decisions.”
As such, the relationship between CFOs and CIOs should have a foundation of trust, positive influence, and shared understanding. Also, CFOs and CIOs should align around several key values including:
- Business Alignment – the definition and use of analytics in the organization
- Shared Language – defining a set of shared business definitions/processes
- Rotation – it may also be helpful to have both finance and IT professionals do rotations in supporting departments
The relationship between CFOs and CIOs is changing as a result of the digitization of business and the increasing popularity of cloud deployments for B2B software. To guarantee organizational success, companies must ensure their CFOs and CIOs can work collaboratively, aligning over a set of core principles and policies.
CIOs must recognize their new role as service providers, guiding other departments through the transition to the cloud, while still allowing them to take responsibility for their solutions. CFOs must take ownership for their finance systems, while also recognizing and relying on the expertise of the CIO.