?Do you understand how these IT cuts are going to affect the business?? the CIO asks the CFO. The CFO responds by asking his own questions: ?Are we getting enough value for what we?re already spending on IT? And why can?t your team speak in business language so the rest of the firm can understand them??
These questions aren?t new, but the intensity is. Economic pressures are pushing these issues to the forefront, and senior business managers are looking for ways to fix systems, processes and people so they can seize more opportunity and come out of this recession ahead of their competitors.
The CFO can be more than just an account-ing system customer of the CIO, and the CIO can be more than merely another budget line to the CFO. Both leaders support the enterprise and can be strong partners in bringing value to the business. Whether in a $200 million or $2 billion enterprise, common concerns have emerged from a series of CFO interviews and other activities I?ve conducted. Here are three fundamental needs demanded?and sometimes begged for?by CFOs.
1. Speak the same language.
Communication is still a problem. The CFO of a corporate real estate division said, ?It would be helpful if the CIO were more understanding of the concerns behind the CFO?s questions. People are using their own words, but the other side doesn?t get it because it isn?t their language. The result is that both sides are attempting to answer questions without understanding the real concerns.? CFOs look to CIOs for a two-part fix: Drop the buzzwords and put the situation into a benefit context.
Action: CIOs need to ensure that the ?kid test? for ease of understanding IT applies daily.
2. Tap the value of performance and risk information.
These insights arose from two perspectives shared by CFOs:
First, the CFO?s spontaneous demand is often ?Show me the value from IT.? Some fault the CIO because the budget line is in the IT shop. Others probe a bit further and see gaps with the business lines. One CFO said, ?We pick the right projects. The mechanics of our implementations are good. We fall down in the configuration with business rules. We need more engagement from the operations areas to help with that.?
Second, CFOs are looking for better data to use both in cost-cutting and in making key investments. These include:
? Understand how revenue, profit and cash generation from earnings depend on ?IT stuff.? They don?t get this information from business-line owners, yet many CFOs know that there is more they need to understand.
? Learn what performance and risk management information the CIO has that could help the CFO make better business-case decisions, implement projects more cleanly and improve operational efficiency. This relates to better understanding and using the economics of IT.
Action: The CFO can be the CIO?s ally. So engage the CFO on a shared set of requirements and implementation actions. Then follow up with outcomes that can be tracked to common measures of revenue, profit, cash generation from earnings and customer satisfaction.
3. Create a decision-making and oversight process that improves both agility and resilience.
CFOs typically discuss tactical concerns and value. Their concerns about making the right decisions are apparent in troubled times, when there is more risk and less margin for error. During planning, IT can create competitive options and respond to needs.
Action: Create and share competitive views of IT. By focusing on shared outcomes, CIOs can move fairly quickly from discussing tactical basics with CFOs to a more effective discussion on ways to improve decision making.
The business world is littered with failed efforts to improve business-technology decision making. Admittedly, it is a daunting challenge at any time, but helpful guidance is available on best practices by using, for example, the COBIT, Val IT and Risk IT frameworks. Built on the collective experience of hundreds of firms in various industries around the world, these frameworks are available as free downloads and are supported by an international user base, conferences and training.
These and other guidelines offer a way for CIOs to shortcut their learning and more easily engage with CFOs and other business leaders to build the capabilities needed to emerge successfully from this recession.
Brian Barnier, a principal at ValueBridge Advisors, teaches, writes and conducts research on business-IT management topics. For ISACA, he is a co-author of the Risk IT framework and best practice guidance, and serves on the program committee for the IT Governance, Risk and Compliance conference.