Powerful Pair: Maintaining and Building the CFO and CIO Relationship for Maximum Impact

As business, and the world it works in, evolves, so do the roles of the senior leaders of organizations, and the relationships between them.

One relationship that often comes under the spotlight is that between CFO and CIO. Of course, it would, one might say. After all, with accelerating digital transformation, the latter will always be negotiating with the former to invest and innovate.

But the relationship is far from as straightforward as that. It is more complex and subtle, and the stakes are high when it comes to ensuring this relationship is truly a productive one. 

From tech talk to board discussion

Certainly, the days of the CIO as the tech specialist are long gone. Today, CIOs must be strategic members of the C-suite. They must be bilingual:  just as comfortable talking to board members  in their language, as they are to members of their own team in theirs.

In a 2021 global survey by Deloitte Global and Workday 60% of “progressive” CIOs (only 6% of the sample alarmingly) are clear that a strategic partnerships with the CFO and other stakeholders is key if they are to succeed in the role of helping to lead finance transformation.

Progressive CIOs try to ensure their priorities are strategically aligned with those of the wider business and are well understood by all key stakeholders.

Realistically, the alternative cannot be fruitful. After all, if you are under pressure as a CIO to drive forward digital transformation, but without disrupting critical business functions, then you must ensure you are in harmonious lock-step with the rest of the business.

It places a demand for CIOs with the mind-set and soft skills  to create and nurture key relationships within the business (the CFO being just one of them) and to nimbly manage the external supplier and other relationships to respond to the business’ demands.

Investing in a shared vision

Perhaps the CFO-CIO relationship comes under its most potential strain when CIOs are making the case for investment.

A CIO must be able to demonstrate a clear understanding of the return on any investment and present it in compelling language that the CFO understands. CIOs really do need to familiarise themselves with the basics of finance. Only then will they be able to debate with credibility the merits or otherwise of an investment.

It’s not just about the euros either.

Any CIO/CFO conversation about the next investment must also consider the bandwidth of the people who have to take things forward and adapt to change.

It’s simply no good funding things and then discovering that the company is not ready to manage them.

Not working under, but working with the CFO

“In considering the relationship of the CIO and CFO, some would say the CIO should not simply work for the CFO, but rather alongside them at the boardroom table. After all, if the CIO is supposed to tailor a digital plan to take into account all aspects of a business, surely they should sit at the top table where the details and nuances of that business are being discussed - if digital investment is to be truly transformative”, explains Katja Hartert, Partner at Odgers Berndtson Germany. 

In this thinking, IT is not a cost centre within the business. Rather it is a profit centre, enabling successful business outcomes, driving commercial success and increasing shareholder value.

Cultural force

The pandemic and the phenomenon of hybrid working as added another dimension to the CIO’ s role and the impact of digital investment.

As so many office workers spending less time together at head office as their companies adopt hybrid working patterns, the impact of technology on the employee experience and thus the culture of the organization has become apparent.

When 500-plus CIOs were polled in an international survey by Adobe and Fortune in April of 2022, a full 89% saw themselves as the  change agents helping to improve the culture of their organization. This can impact on the attraction and retention of top senior talent who will be unimpressed by an organization with outdated technology, mindsets and processes.

A willing partner?

We’ve said a lot about the CIO in this relationship, but what about the CFO on the road to digital transformation?

For some, it is about asking the right, basic, questions at the beginning: How will the technology provide value to the customer or improve operational effectiveness? How does it fit with our strategy? What’s the return on investment? How long will it take to implement? And, critically, in a world of ever-changing threat, what are the risks?

When a CFO feels they have the right answers, then they have to be as much an evangelist for the agreed digital investment as the CIO is, and they need to form a united front when persuading the rest of the business.

“Personal chemistry and mutual respect, and a shared language, is the cornerstone of this united front”, says Jürgen van Zwoll, Partner at Odgers Berndtson Germany. 

Fortunately, CIOs should find a willing partner in the CFO.

As a recent study revealed, the majority of CFOs are already leaning towards digital transformation as one of their top five priorities. 80% of CFOs listed digital transformation as one of their top five priorities, according to a 2021 survey by  Rimini Street. In addition, 77% would help their CIOs find ways to fund new transformation projects. But only if those initiatives showed promise of delivering strong returns.

But willing partners or not, the importance of getting the CFO/CIO relationship right in the medium to long-term cannot be overemphasized.

Together, they can move a business forward, arguably like no other senior leadership pairing.

If you want to discuss these issues and how they affect your talent and leadership planning, or perhaps want advice on your own career trajectory, please get in touch.