CIOs CFO collaboration is crucial for business success: Report

However, barriers like conflicts in traditional reporting structures and lack of new incentives hinder efficient and effective collaboration

CIO-CFO collaboration key to IT transformation - CIO&Leader

IT transformation has become a priority for enterprises globally. In order to successfully drive this transformation, CIO-CFO collaboration is important as these are the major players who provide the necessary financial and technical skills. Enterprises, such as Panera Bread, GE Digital, Royal Resorts and Aviva view IT transformation as essential for maintaining their competitive edge and addressing the shifting demands of customers although they are from vastly different industry segments in different countries. 

However, IT transformation quite often faces barriers, especially evident in CIO-CFO collaboration. Mostly, these arise from conflicts in traditional reporting structures and lack of new incentives aimed at fostering close collaboration between CIOs and CFOs. Some of the barriers are shown in the following table:

Table: Barriers to IT Transformation

Source: Forbes Insights/Dell EMC Research

Yet, it is interesting to note from a Forbes study that nearly three-quarters (72%) of CEOs and 63% of COOs consider CIO-CFO collaboration to be excellent. Senior management of leading global enteprises also view significant benefits arising out of the CIO-CFO collaboration, some of which are:

  • Enterprises reacting more quickly to market changes
  • Businesses attracting new customers in current markets
  • Senior management making better and faster decisions about investments in emerging technologies
  • Enterprises reducing costs, increasing sales, profits and shareholder value
  • Businesses improving and streamlining internal operations

These benefits have led industries globally to adopt IT transformation across verticals, such as insurance and financial services, travel and hospitality, dining and entertainment, manufacturing, government and education and oil and gas. "The intersection of business goals and information technology is essential to industrial firms today," reflects Khozema Shipchandler, global CFO for GE Digital. 

As per a Dell EMC research, Asia, Europe and the Middle East are leading in transformation efforts with more than half in each region describing their strategies as established and key elements of their strategic priorities and business strategies. This contrasts with the assessments of executives in the Americas, where most executives say transformation strategies have not been fully rolled out across their organizations.

The overall survey indicated that 96% of executives consider a close working relationship between CIOs and CFOs important for buisness success. As shown in the following figure, 51% of respondents from the Asia-Pacific region rated the effectiveness of CIO-CFO collaboration to be "excellent while for Europe, it was 58%. Most of the Americas and the Middle East rated the effectiveness to be "good".

Figure: Effectiveness of CIO-CFO Collaboration in Enterprises Globally

Source: Forbes Insights/Dell EMC Research

Moving ahead, the study reveals global leaders cultivating transformation-oriented cultures that combine innovation and risk-taking with practical financial controls. Thus, global leaders in leading enterprises are using the following guidelines to turn IT transformation into a strategy for business success and ensure eveb closer collaboration between CIOs and CFOs:

  • Update reporting structures to address the evolving roles of CIOs
  • Cultivate change agents among CIOs and CFOs
  • Measure and reward CIO performance as per business outcomes
  • View ROI calculations as guides and not hard and fast requirements
  • Implement clear milestones to monitor the progress of higher risk initiatives
  • Turn the IT department into a consultancy

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