My customer meetings have been different lately. Increasingly, the CIO and CFO are attending together to jointly discuss innovations and new solutions. This is a fascinating development that shows how the dynamic between these two roles has shifted. It is not happening in every company yet, but I believe it’s crucial in the digital economy that CFOs take an earlier interest in innovation, while CIOs learn how to relate on a strategic level with top financial officials.
What I am seeing is that CFOs are now becoming more involved in strategic corporate decisions, rather than focusing solely on cost containment. And increasingly, as digitalization and connectivity change the IT function, so CIOs are taking responsibility not only for rock-solid operations but also for leading innovation. CFOs typically have a strong, healthy skepticism of intangible forward-looking metrics and dubious business cases. They know how to dig for underlying business value and they cherish transparency. CIOs can view that as an important asset and make the CFO an ally in their drive for business innovation.
Reporting Isn’t All That Matters
While reporting is important, I see is that the CFOs are becoming more and more responsible for implementing the financial strategy while CIOs are essential enablers for translating that strategy into action. It’s about combining knowledge of technology and processes that will deliver innovation to organizations.
Digitization brings finance and IT together. IT is now much more of an innovation driver, enabling new business models. Partnering with the CFO in this context is essential. There should be joint accountability for driving projects to the desired result. This is only possible when you have the finance function working shoulder-to-shoulder with the technology team. Good CIO and CFO partners have both a road map and joint accountability to make sure that all the benefits they would like to see materialize. When the CFO is encouraged to take an active interest in technological innovation and the ways in which IT can advance the interests of the business, the CIO gains a partner and advocate early in the process.
Another key point of alignment often overlooked is the fact that the CFO tends to be a strong supporter of the CIO’s governance of IT development and implementation. In recent years, line-of-business leaders have increasingly sidestepped IT and made their own substantial technology investments and commitments, particularly in cloud solutions. This has forced CIOs to address security and integrity problems after the fact. The CFO is the least likely executive to circumvent good governance practices and launch rogue technology projects. This shared view of the merits of structure, efficiency, and stability should not be under-appreciated.
Moving Forward Together
A strong CFO/CIO alliance focuses on innovations that transcend a project-centric approach. In-memory computing is a perfect example. For IT, in-memory computing represents a next-generation architecture that offers enhanced stability and performance across the board. The financial organization benefits when transactional and analytical processing exist in a single system, because they gain real-time reporting and insights into every transaction and eliminate the delays and incompatibilities of doing their analysis in separate, disparate systems.
With in-memory, the CIO brings accuracy and technological advantage to the enterprise, while the CFO is positioned to drive out costs that were previously unrecognized due to reporting delays or a lack of clarity. With data and landscape integration, the CIO provides a strong innovation platform on which transparent applications can be built.
These types of projects are great opportunities for CFOs and CIOs to find common ground in their shared passion for excellence, good governance, security, and innovation. Such a strong, aligned executive partnership is a recipe for enterprise growth and success in the digital economy.
Watch a video to see how the CFO and CIO partner for innovation: A Day in the Life of a CIO