Cloud Computing: An Opportunity to Strengthen the CIO-CFO Relationship

Cloud Computing: An Opportunity to Strengthen the CIO-CFO RelationshipBusinesses of every industry and size are facing economic and market changes that often prove difficult – if not impossible – to forecast.

This leaves companies vulnerable to fluctuating swings in demand and under- or over-investment in IT. Underestimating demand can lead to missed opportunities, outages, and other major disruptions to your business.

Overestimating demand, on the other hand, can result in write-offs for unused capacity and facilities. The inherent flexibility of cloud computing can free CFOs and CIOs from these worries, while providing a more efficient way to manage actual demand.

While the cost benefits of cloud computing are well understood, CFOs and CIOs have had difficulty getting a handle on the greater potential benefit – business agility. Their dialogue is likely to focus on “How much capital and operational expense can we cut with cloud?” and not “How will cloud improve revenue and make us more agile?” This focus on cost savings has shaped the relationship between CFOs and CIOs at many companies.

Bringing the power of the CIO back into IT

According to a 2011 Gartner study in conjunction with Financial Executives International, the CFO in 45% of organizations “…makes or leads IT investment strategy.” According to the study, CFOs are increasingly becoming more involved with IT leadership – driven by the fact that only 25% of CFOs believe that their CIO is a key player in determining business strategy and delivering against that strategy. The study also noted a rising influence of the CFO over the IT department – with 42% of IT organizations surveyed reporting directly to the CFO.

There is perhaps no relationship more contentious in the C-suite than the one between the CIO and the CFO. Over the last few years, some companies have gone as far as choosing CFOs to lead their technology transformation efforts. But, others have proven that CIOs and CFOs can build a close working relationship in which they partner together to achieve business goals.

With the emergence of cloud computing, CIOs have an opportunity to play an expanded role in business strategy and become an equal partner with the CFO. By offering both cost savings and greater business value in the form of business agility, cloud computing can help put the CFO and CIO on the same page and improve the alignment between their organizations. Working together, they can drive a much tighter connection between IT transformation and business transformation.

Want to learn more?

Interested in more about the cloud models that are available and their benefits? Read the white paper “Aligning CIO and CFO Priorities” from IDG Enterprise.