Dive Brief:
- While companies where CFOs and CIOs have good relationships realize better outcomes on digital initiatives, only 30% of chief financial officers and chief information officers said they have a “collegial” and “business-centric” CFO-CIO partnership, according to a recent Gartner survey of 183 executives.
- CFOs and CIOs gave themselves better marks for understanding the intersection between digitization and finance than they gave their counterparts: 80% of CFOs said they understand how financial management needs to adapt to foster digitalization while only 55% of CIOs agreed, and 94% of CIOs said they grasped how technology affects corporate financials but only 62% of CFOs agreed.
- Yet strong CFO-CIO partners are 51% more likely to find funding for digital initiatives, 39% more likely to keep digital spending in line with the budget plan and 18% more likely to achieve digital business goals, the survey found.
Dive Insight:
The accelerated move to hybrid work in the pandemic has helped to push up company spending on technology in part to make it possible for employees to work anywhere. For example, global spending on public cloud services is expected to rise 20% this year to $495 billion, according to Gartner.
At the same time, inflation and rising cost inputs are putting pressure on margins and making it increasingly important to take a look at how CFOs and CIOs can work better together to make sure the IT and tech investments they are making pay off, according to Randeep Rathindran, vice president of research in Gartner’s finance practice.
“CIOs and CFOs need to be joined at the hip,” he said in an interview, adding that the survey reflects that they don't always understand how the other party thinks about the issues. “It doesn’t show there’s a massive divergence but it does show that they’re not completely aligned.”
Working more collaboratively likely yields better results because collegial partners “tend to act like members of the same team instead of creating decision-making friction by behaving as if their counterpart is trying to hold them back,” the Gartner report on the survey states.
There are a number of steps that CFOs and CIOs can take to work better together, Rathindran said. For example, CIOs can have more empathy for the earnings targets that CFOs must hit, while CFOs could show more empathy for why an iterative approach to funding and executing digital projects is needed, he said.
Jointly both sides need to approach projects through a lens of enterprise-wide digital spending, “whether it is happening through the IT budget or through other business areas and function,” Rathindran wrote in an email. In addition, they need to agree to both technology and business metrics for measuring the outcome of a project and CIOs need to be “fully transparent” about the full cost of projects.
CIOs need to show “the CFO not just the cost of building a digital tool, but also what it would cost to run and maintain it over time,” Rathindran wrote.
