CFOs may have ultimate oversight, but the relationship between CFO and CIO is more symbiotic than it first might appear.
A recent article in CFO.com, “The Digital CFO,” points out how technology is reshaping the role of the CFO. As the article states, “When it is managed well, technology connects finance with every function and informs every strategic decision — the nervous system and analytical core of the modern enterprise. When it is managed poorly, technology saps competitive strength from even the strongest company, affecting earnings and valuation.”
Acknowledging the power the CFO holds within the enterprise, it’s only natural that, in order to align IT with finance, the CFO should have oversight of the CIO. But how do CFOs and CIOs feel about this arrangement? According to a CFO.com survey of 267 U.S. senior finance executives, although 74% said they are comfortable having the CIO report to them, 93% in that same study believe that, going forward, CFOs will need a much stronger technology skill set in order to do their job successfully.
When it comes to finance IT, this is especially true. Since one of the chief roles for finance executives is risk management, the survey quotes one respondent who said CFOs need to “thoroughly understand how security and privacy are managed by their IT group and through their IT infrastructure.”
As far as managing finance IT, 70% of respondents indicated that investment in technology to perform finance functions will increase this year. This increase in investment will need to be paired with an increase in time that senior finance executives will spend managing this finance technology; 65% of respondents agree with that assessment.
But along with this increase in expenditures in time and money will come an increase in the need for collaboration between these two, sometimes, disparate entities. As someone who originally comes from the IT sector, I will say it is important that this relationship be at least symbiotic rather than a strictly “top-down” situation. Although it is undoubtedly a proper move to give the CFO oversight (after all, they are the ones who are closest to the vision and goals of the enterprise), those same CFOs need to acknowledge that they are not always specialists within the IT sector. The CFO.com survey showed that 56% of respondents indicated that they felt they were staying current with new technology. That may be true if they’re talking about their personal use of apps, devices, and social media; but that’s a far cry from the types of technology we’re talking about for finance and ERP systems.
The reality is a CFO can’t just do some minor add-on education or read books and articles in order to be fully on top of IT. This is why the CIO needs to be considered a partner in any of these endeavors. When that relationship is supportive, the CIO will become an advocate for the CFO and the company when communicating with his or her IT team. And that may well be the key to success for the enterprise as a whole.