“The CFO and CIO partnership is critical for business success,” says software-support provider Rimini Street.
That’s certainly a true statement. Who could disagree? Finance and tech leaders themselves enthusiastically agree, and they overwhelmingly say their bond has grown stronger because of the uncertainty in today’s business landscape.
But they don’t agree on everything, judging from a new Rimini Street report, based on a massive study on IT investments that also explores relations between the two C-suite roles.
Results of the survey — which included 2,937 CFOs and CIOs, approximately evenly divided, at midsized and large enterprises in major global industries — suggest that, at many companies, the two executives don’t even have the same sense of who’s running the show.
While 86% of the respondents said their CFO-CIO relationship has grown stronger recently, two-thirds of both groups said they are responsible for the technology-related decisions aimed at achieving business results. Rimini Street called it a “surprise” that even a third of technology leaders would acknowledge CFOs taking the lead on the technological aspects of projects.
However, there were similarly disparate views of who was responsible for setting the timing of technology projects, expected business results, and budget levels.
“One implication of such a strong sense of joint ownership is that both leaders must ensure clearly defined roles and responsibilities,” Rimini Street wrote in its survey report. “Otherwise, conflicts may arise for control and for decision-making authority.”
Despite the reported improvements in their working relationship, 86% of CIOs indicated their CFO counterpart needs to become more technology-savvy to improve communications between the two. And sentiments ran as strong in the other direction, with 85% of CFOs saying their CIO counterpart needs to become more business-savvy to accomplish that goal.
Only 36% of CFOs saw CIOs as innovative change agents who drive business strategy, and just 32% see them as partners who help connect the dots between technology and business decisions.
On a more positive note, 49% of CFOs said a positive relationship with their CIO has contributed to creating better business results.
Some quite interesting survey results came from a question that asked CFOs, “Imagine a scenario where your CIO approaches you with an IT proposal that would require additional investment. The proposal seems reasonable and would likely deliver a strong ROI. Which of the following [four] responses is the most likely one?”
The responses showed finance chiefs falling into four distinct, similar-sized camps, portraying a spectrum of viewpoints from most conservative to most aggressive:
- 27% said, “I would request that the CIO look to existing IT budgets to identify needed funds.”
- 26%: “I would go to the Board to help the CIO secure the needed funding.”
- 24%: “I would partner with the CIO to identify the additional funds in IT or non-IT budgets.”
- 23%: “I would reallocate funds from another non-IT budget to support this initiative.”
In the survey overall, CFOs were unsurprisingly more focused than CIOs on the financial impact of technology investments.
“It can seem like the CFO and CIO are speaking different languages when it comes to investing in IT infrastructure, one focused on financial results and the other on functional and security challenges,” Rimini Street wrote.
“However, making the effort to better understand each other’s goals and concerns could result in lower-cost solutions and technology investments that could lead to optimal returns for the business.”