Is it any wonder CIOs and CFOs often find themselves at loggerheads? CIOs spend money, while it's the CFO's job to save it. Granted, CIOs purchase and implement technology that helps companies achieve their business goals. But it's still a classic "spend-vs.-save" scenario.
Last week I wrote about the concept of a CFO within the IT department. By making IT spending more transparent and ensuring companies are getting maximum efficiency for their money, I wrote, an IT-specific "numbers guy" could help bridge the gap between CIOs and CFOs. I cited an InformationWeek article that profiled one such executive, Bill Miller, associate VP of IT finance at Nationwide Insurance.
A CFO.com article has me even more convinced of the need for this role. The article includes some comments from CFOs attending a recent conference that encapsulate some of the frustration they feel with free-spending CIOs. A remark attributed to an anonymous finance VP of a financial institution:
[CIOs are] always coming up with these very capital-intensive programs that are essentially faith-based initiatives. The projects are not well supported with metrics, the numbers don't work, but they want to run off and take the risk.
To be fair, the same VP acknowledged that CFOs need to "have some vision, too" and CIOs could help provide it. Still, you could tell he or she wasn't happy with his or her CIO.
One member of a panel discussion suggested documenting all discussions between IT and finance in as much detail as possible to avoid any misunderstandings and "he said, she said" kinds of finger pointing. That sounds pretty combative. However, there is hope. The head of finance for Educational Testing Service described how an IT idea, a video illustrating an online registration process for business schools, saved the company money by cutting call-center costs associated with registrations by 20 percent.
Stephen Bozzo of 1-800-Flowers.com, the single CIO on the panel, said IT should view its contacts with the CFO as educational opportunities. He said:
We must take accountability. We do lunch-and-learns, or one-on-ones with whoever might be confused.
The company is creating a centralized customer database for all 16 of its brands. IT was able to win financial backing by linking the database to customer retention and producing a specific number to illustrate its value. In 1-800-Flowers.com's case, a 1 percent increase in customer retention translates to $10 million in revenue.