Transcript Why the CFO is ICTs key Ally

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Why the CFO is ICTs key Ally
Meeting the CFO expectations of an economic delivery of ICT, will
make them your biggest supporter.
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The CFO – CIO Relationship
• CIOs are one of the largest spenders of capital in many
organisations.
• CFOs are responsible to shareholders to make sure capital is
spent wisely and with a clear return on investment focus.
• CFOs look towards the CIO and expect to see a well formed
business case with a rock solid ROI for each of the ICT
investments.
• CIOs struggle to find solid ROI in many of their ICT initiatives
• CIOs are on an abstract search for the best technology
• CFOs are on the search of the best return on capital
CFOs and CIOs need to work together build business focused, ROI
driven business cases for ICT initiatives.
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Research shows that CFO believe in ICT
• In the Deloitte’s 2013 CFO Signals survey, most CFOs in the US
view the transformational impact of technology as far-reaching.
• When asked about their priorities for capability improvement,
CFOs listed IT/information management second after strategic
planning,
• The CFO, and other members of the c-suite need to work with
the CIO to create an understanding that ICT expenditure must
yield an ROI return to gain the Boards and Shareholder
support.
• It is extremely important for both CIOs and CFOs to act as true
business partners and keep an open dialogue to ensure that
these new investments are keeping pace with the rapid change
in the business.
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Align IT investment with business
strategy
• CIOs have the opportunity to turn ICT into a strategic partner
of the business by ensuring there is a clear line of sight from
the technology investments to positive business outcomes.
• “CIOs have a real opportunity to have a seat at the table
and to get involved in not only developing strategy but
really helping to execute strategy,” says Michael Bradburn,
CFO at Brisbane Airport Corporation.
• When a CIO is invited to the Business Strategy meeting they
are not technologists; they are a business person solving
business problems with their special technology expertise.
• A CIO must be a language translator and convert abstract
technology statements into clear business statements.
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Be proactive about forming business
partnerships
• While a good CIO will engage with overall business strategy,
they must also develop and encourage their ICT team to build
professional business partnerships.
• “Be proactive,” says Tim Riitters, CFO for PureStorage.
“Even if a CIO doesn’t sit at the CEO level staff they still
should spend time with leaders across the organisation
to understand the company's strategic imperatives, in
order to know how to leverage technology to support
these strategies.”
• “It is a key piece of information that will ensure
technology is being used optimally,” says Riitters. “It is
an ongoing partnership where two heads are really
better than one.” These interactions can also ensure that the
c-suites will gain a deeper understanding of what the CIOs role
entails, which aids them in developing realistic expectations.
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Guide the CFO on the benefits of ICT
• Being an IT leader means guiding CFOs through priority issues
to illustrate how technology can be leveraged to achieve real
results, such as enabling strategy, increasing competitiveness,
or improving operational effectiveness.
• Communicating these benefits, however, means recognising
that not everyone is adept at speaking the technical language
of IT.
• CIOs need to spend more time tailoring the benefits of the IT
function to each of the different business divisions, because
each of those leaders will have different needs.
• What frustrates CFOs the most are surprise and unplanned
capital expenditure.
• All ICT capital expenditure can and should be well planned.
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The language of the CIO
• An IT leader that talks only about what their function does isn’t
going to connect with the Business; they need to sell the
benefits that are specific to each of the different divisions.
• This means listening to what those needs are and packaging an
a solution that is focused on the benefit, and not the function,
of IT.
• Adopting a shared language is also beneficially from a cultural
point of view. Without it, working relationships for both internal
• The language of finance is a far better tool to describe ICT
investments than the language of technlogy.
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Be transparent about pricing
• CFOs may lament working with a CIO that does not exercising
transparency and strategic decision-making when it comes to
the costs associated with IT projects.
• “ICT will always cost more if the business doesn’t have
transparency on pricing,” says Bradburn.
• If ICT has transparency, the business will always make a better
decision. If a business requests a new program or system, if
they don’t have transparency as to what those costs are (which
is generally the case) they’ll always ask for more than they
need.”
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CIO and the search for the best
technology
• The server that’s available 24/7 with no down time seems most
appealing, but if the CIO presents a transparent pricing guide
that shows an alternative with an hour of downtime a day for a
million dollars less, this will lead to better business decision.
• Quite often the business will say they don’t want to pay that
much of a premium for 24/7, they can actually deal with it
being down for an hour, particularly if it saves them a million
dollars.
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The final words
CIO who strategically rejects ICT investment proposals
that don’t make enough business sense, while ensuring
that they don’t disrupt the business, will always be a
good partner to the CFO
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