Seven Tips to Make the CFO Your Partner
Check out Ann's advice on ways to build a bond.
Wouldn't it be great if CIOs and CFOs played together like Magic Johnson and Kareem Abdul-Jabbar? The CIO feeds lots of great ideas to his or her teammate, who funds them and hits a slam dunk for the enterprise. (Sky hook optional.) But many CIOs and CFOs play more like Magic and Larry Bird, talented "frenemies" that make plays that result in plenty of wins, although they sometimes wreck the other guy's momentum.
I wrote about animosity between CIOs and CFOs back in November, citing a CFO.com article that shared plenty of examples of CFO suspicion culled from a finance executive conference. One 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.
Yet CIOs who are able to create a Magic/Kareem-like bond find that they both can reap benefits. IT Business Edge blogger Rob Enderle, who attended the ITBE-sponsored Midmarket CIO Forum in Orlando earlier this month, was quite taken with a panel discussion during which several CIOs said befriending the CFO paid strong dividends. Wrote Rob:
If you can find ways to make the CFO's job easier, that person is more likely to help you when you need it and less likely to hang your budget out to dry. If your goals align, the CFO is more likely to see the advantage of spending on IT and will focus cuts on other areas. Given how hard it is for the CFO to get real numbers and how critical IT is to generating those numbers, an alliance can pay strong dividends, including cutting stress from both jobs.
So how to make the CFO your friend? One attendee at the Midmarket CIO Forum suggested looking for opportunities to get to know your CFO better in non-business settings, perhaps by taking him or her to lunch.
As Rob mentions, CIOs can win over CFOs by helping them more easily produce accurate financial numbers. IT Business Edge's Mike Vizard wrote about this as well, sharing some results from IBM's latest annual survey of CFOs
earlier this month. He suggested CIOs could help bridge the divide between central finance systems, which are managed almost in a batch mode that is updated weekly, and the systems of various business units that are updated on a daily basis.
Talking to the CFO in language he or she can understand and appreciate is also a good idea. It's one of the key takeaways in a CIOUpdate piece in which Logicalis CFO Greg Baker lists three mistakes to avoid when pitching IT spending. I'll wrap by offering seven tips on improving CIO/CFO relationships, culled from this article and from articles I've referenced in prior posts on similar topics:
- Make efforts to get to know the CIO better in non-business settings, such as over a lunch in which "shop talk" is kept to a minimum.
- Work closely with the CFO to come up with IT solutions to problems that closely affect the CFO's job, such as offering more transparency into financial numbers and helping ensure they are accurate.
- Can the technical jargon. Use terms the CFO can understand and describe how technical projects affect the broader business. Rather than dwelling on technical issues such as bandwidth constraints or deployment requirements, talk about how the project can improve sales or reduce costs.
- Dot all your "i's" and cross all your "t's" when submitting financial proposals. Include all relevant information: amount requested, vendors being used, project timing, which business unit the requested IT will support. If there's a standard capital request form with standard boxes, make sure it's completely filled out. It's a good idea to have someone proof proposals before submitting to the CFO.
- Consider taking a finance course or two. You aren't trying for an MBA, but you want to be able to read -- and understand -- your company's financial statements and to produce a coherent cost-benefit analysis. Finance courses will help.
- Be forthcoming with information. CFOs hate surprises, so don't try to cover up if a project is going over budget. Instead, tell the CFO of any problems and offer possible solutions. If project costs will run 20 percent over projections, be prepared to tell the CFO how the money can be recovered by cuts elsewhere in the IT budget.
- Consider appointing an "internal CFO" within the IT department to take care of budgeting and financial accounting for IT. This should cut down on unexpected questions from the CFO and keep him or her happy with plenty of relevant reports written in financial terms.