Strong CIO-CFO relationships are key in 2023
- Written by Denham Pinder, Managing Director, APAC at Contino
As we head into the final stages of the year, many business activities and operations ramp up as people try to achieve their year-end goals and KPIs, while business leaders are also planning investments for the new year. And in the modern business landscape, achieving goals and setting roadmaps requires various business functions and personnel to align and work on the same page—specifically the CIO and CFO.
The relationship between the CIO and CFO is complex, with Deloitte reporting more than 20 per cent of CIOs worldwide report to the CFOs directly. With this in mind, there’s no surprise to see debates between the CIO and CFO, given they have different business perspectives on how to approach growth. This is supported by Gartner’s research suggesting only 30 per cent of CIOs and CFOs have a collegial and business-centric relationship.
Whenever an organisation is looking to invest in technology, CFOs want to know what the ROI is, while the CIO and CTO are responsible for showcasing the KPIs and business outcomes of the project. Linking the two business imperatives is not always clearcut. Let’s consider an organisation looking to invest in cybersecurity; proving ROI can be a tricky task given it’s about prevention. Often, the most common way to identify the absolute return on the security investment is after an organisation has been breached… but by that time it’s too late.
Here is a checklist for decision-makers and organisations to help showcase ROI to financial controllers.
Establish a clear set of goals focused on the customer
Digital is a key battlefield for business revenues, which means it’s critical for CIOs to work with their IT teams to set up realistic and achievable goals that are measurable by management and business teams. As customer demands continue to grow, investments and goals should be mapped back to customer expectations and experiences, backed by data. This means setting up clear measurable business outcomes focused on customer satisfaction and customer experience. For example:
* Reducing average clicks per transaction by 20%
* Measuring and improving channel satisfaction by 10%
* Reduce consumer attrition on Product X by 50%
* Grow digital channel client growth by 80%
The need for speed – Improving Time to Market
Elaborate product features and reliable capabilities are only part of the criteria to determine the success of an investment; time to market is another important aspect to consider in a highly competitive business environment. This is the sum of the combined efforts of all stakeholders, including workflow steps, decision points and strategies involved throughout the entire business process. Being able to move quickly and implement change rapidly is key to gaining a competitive advantage.
Adopting robust cloud-native services provides a list of benefits to the IT team as they enable flexibility and agility in building new products for the business. By focusing on reducing deployment times from weeks to days; improving data health (freshness and accuracy); and reducing the number of wasteful touchpoints in each customer journey will all contribute to improving speed to market. In addition, once the right foundations are in place through automated pipelines and self-service portals, cloud-native solutions drive higher velocity of features that deliver inherent business advantage.
Cost management – Moving the Economic Soundness dial
While a quick and simple implementation is always desired, it’s never finished within a few clicks and unfortunately, research shows that many large IT projects face cost overruns and budget blowouts. If this is observed as a repeated and continued trend, CFOs will place more scrutiny on IT projects and question what the actual total cost of the project will likely be.
Most organisations have now pivoted to adopting cloud technology. By actively tracking in real time, internal consumption across your cloud landscape will ensure timely decisions are made on the appropriateness of various IaaS, PaaS and SaaS platforms. Similarly, by setting up service catalogues and actively measuring self-service touchpoints from the business is a positive way to increase IT’s investment profile by delivering real savings to the business.
To enable faster products to market that enhance your customer experiences, while delivering on your CFOs ROI objectives, CIO’s should turn to cloud-native digital consultancies to rapidly deliver lighthouse projects. These lighthouse projects will help IT and business teams come together to prove the value of products, experiences and ultimately deliver solid business cases to the CFO and the Board.
With a global recession looming, business leaders face challenges not seen in a long time. This means increased scrutiny and restraints will be placed upon all investments. However, if prioritised appropriately, these investments can also be the answer to an organisation’s ability to successfully navigate turbulent economic times. Technology investments that showcase clear ROI, focused on customer experiences, faster time to market and economic soundness can be the answer we are looking for.