Giving the CFO What He or She Wants

Ann All

It's a given that CFOs like numbers. So why don't more IT managers include plenty of good, hard numbers in their presentations to the CFO? That was the premise of a post I wrote earlier this year, which also offered some good advice on how to cultivate a better working relationship with CFOs.


A lot of the advice came down to communication. CFOs don't like surprises, so don't conceal issues such as budget overruns. Consider taking a finance course so you can really understand financial statements and produce a coherent cost-benefit analysis.


I recently found a great post along the same lines on CustomerProfit. Though it's written for chief marketing officers trying to get the green light (and cash) for a new initiative, I think the tips will work equally as well for IT managers. They were derived from interviews with two CFOs, Nancy Fulton of Rainbow Rewards and Perry Liff of Talbots, Inc. The biggest takeaway for winning the CFO's backing is to offer a solid business case.


Of course, this is easier said than done. Especially when, as IT Business Edge's Mike Vizard wrote earlier this month, many IT organizations simply don't have the appropriate financial analysis tools in place to present an effective case. He said:


... internal IT organizations are not only competing against external service providers, they also need to compete against other groups in the business to hold on to their piece of a shrinking budget. Unfortunately for the internal IT departments, those other business units -- not to mention that external service providers-are all well armed with financial analysis tools. In contrast, the internal IT department all too often keeps bringing a knife to budget gunfights where the opposition is heavily armed with automatic weapons.


Some of the best tips from the CustomerProfit piece:

  • Present multiple scenarios (conservative, break-even/moderate and liberal), so the CFO can see how far assumptions would have to miss the mark to put a project in negative financial territory.
  • Clearly illustrate both the short- and long-term value of a project. (Realize that CFOs are looking for short-term value in the current economy, I'd add.)
  • Ask the finance department for help with your ROI models, and show an understanding of the importance of these models.
  • Share risk assessments, including risks that will occur if project is not approved and those that will occur if a project is approved but doesn't meet expectations.
  • Be sure to measure results. A department with a history of positive results will get more budget love.

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Add Comment      Leave a comment on this blog post
Oct 5, 2009 3:10 PM Peter Kretzman Peter Kretzman  says:

Excellent tips, Ann. Talking to the CFO and getting joint understanding and agreement on what's going on in IT is a critical success factor for the CIO, in my experience. Presenting a solid business case is often a failing of IT organizations, I've found.  I've written on this extensively in my blog, including passing along a sample ROI template (and associated advice about gathering costs/benefits) that can earn a lot of respect from any finance organization.  See "Financial metrics for IT: the holy grail of ROI, and how it misses the point: Part 1" at http://www.peterkretzman.com/2008/03/19/financial-metrics-for-it-the-holy-grail-of-roi-and-how-it-misses-the-point-part-1/.  Or, "'Channeling': a technique for preparing IT presentations to management": http://www.peterkretzman.com/2008/03/14/channeling-a-technique-for-preparing-it-presentations-to-management/


Peter Kretzman

Nov 13, 2009 3:43 PM Chandan Pathak Chandan Pathak  says:

I think CMO's should now take steps ahead in talkin to its CFO's, as what is required now is a more combined & calculated effort to increase revenue generation to benefit the organisation as there is increase in the troubled economy, the over spending and the lack of effective marketing investments.

Marketing is often first in line for cuts as corporate leaders attempt to identify immediate cost reductions that may take longer to achieve in other areas. But despite a 75 percent decrease in marketers' marketing budgets this year, as well as 65 percent who said they were expected to drive more sales with the same or lower budget, marketing accountability programs have taken on a greater significance. In order to increase the effectiveness and the efficiency, both sides of the equation i.e., the ROI and the cost of using the lever should be factored into investment decisions.

I read this interesting article on the following blog:



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