Now, working side by side with Geswein (literally, as the two have adjoining offices), Crowther says the prevailing sense of partnership makes all the difference. Geswein agrees. “In some ways, we’re lucky,” the CFO says. “We have this huge project that we can rally the entire organization around, and it really pulls finance and IT together. Other companies lack that.”
They may lack the project, but many companies are attempting to rally the troops around this new reality nonetheless. A recent survey by McKinsey & Co. found that the number of CIOs reporting to CFOs doubled in 2003, and the consultancy expects that trend to continue as companies look to get more value from IT. Other surveys have found similar results, and IT consulting companies and magazines are now bursting with advice for CIOs on how to get along with the new boss.
At many companies, they don’t. As we reported earlier this year (see “The Great Divide“), when given the chance to speak candidly about their working relationships with CFOs, many CIOs expressed frustration that they are constantly asked to do more with less, are shut out of key committees or teams that shape strategy, and are unfairly tainted by distant memories of failed projects for which they do not deserve blame.
If You Only Understood
While those gripes are legitimate and unlikely to vanish overnight, as companies adjust to this new world order they are finding ways to develop strong working relationships between finance and IT, relationships in which finance does not merely approve (or deny) budget outlays, but works side by side with IT to achieve the alignment that has eluded most firms for so long. Recent studies from Accenture and Bain & Co., to cite but two, find a majority of executives simultaneously crediting IT for boosting productivity and enabling growth and also blaming it for failing to deliver benefits proportionate to what’s spent on IT and inhibiting growth in a number of ways. Those mixed reviews often lead to frustration with IT and hence to the new alignment between CFOs and CIOs.
What do good finance-IT partnerships entail? CFOs and CIOs we spoke to said a shared sense of mission and an organizational structure that gives IT the proverbial “seat at the table” are critical. Several companies said it makes little difference whom the CIO reports to as long as he or she participates on the committees that drive strategy. Most CFOs agreed, and seem eager to have CIOs participate in such efforts versus being brought into the loop after the fact.
Perhaps more important, if less quantifiable, is a certain comfort level between CFOs and CIOs that, whether CIOs like it or not, often comes down to the technologist possessing a strong grasp of finance even as the finance expert makes do with only a rudimentary knowledge of what technology can and can’t do. “We have a running joke,” says Geswein, “in which I ask why we can’t do this or that and John will say, ‘Well, if you understood the technology….’”