Thawing out the CIO-CFO cold war

Bo Hofstead says it's time to start chipping away at a dangerous corporate wall of mistrust--or else send out an SOS for Henry Kissinger.

3 min read
A corporate cold war between chief information officers and chief financial officers is raging inside many organizations. The reasons are myriad, chief among them being an uncertain economy, the prolonged technology slump and tight constraints on corporate spending. But the net effect has been to make it harder for information technology staffs to gain corporate approval for strategic investments--especially when their financial counterparts are focusing on squeezing out hard dollar returns.

Indeed, some 30 percent of companies now require executive approval for all new investments, regardless of size, scope or cost, according to Forrester Research. The average company will not commit to funding beyond 11 months out. What's more, they require the justification of funds every six months.

What you have here is a recipe for added strain on the relationship between CIOs and CFOs. On the one hand, CIOs are trying to keep the company's systems up-to-date. On the other hand, CFOs are keen on keeping a tighter grasp on the purse strings.

As if that weren't enough, the financial and technology types also tend to speak different languages so that neither side seems willing to listen to or understand the other's concerns.

CFOs often view the IT side as a large expense drain that needs to be plugged through cost-cutting measures.

Financial and technology types also tend to speak different languages so that neither side seems willing to listen or understand the other's concerns.
From where they sit, CIOs regard the financial group as nothing more than a roadblock to circumvent, if the company is to make the necessary technological enhancements.

Why is it, then, that so many CFOs believe that IT staffs do not think strategically enough and must be restrained from going after too many bells? Unfortunately, their belief may be based on harsh experience. Too many companies have been saddled with underutilized systems as a result of past purchases.

It is true that not all CIOs pay sufficient attention to the financial costs and returns involved with what they propose. And it is also true that not all CFOs understand the intricacies of server capacity. Still, many organizations could avoid stumbling into a cross-departmental cold war. The trick is to put in place meaningful technology infrastructure projects that address strategic corporate objectives as well as pass strict financial scrutiny.

The most effective organizations are those with clear overall strategies that are consistently communicated. These goals should be understood and embraced by each department. It may seem obvious that everyone should be working from the same script, but the dynamics between different departments can easily become counterproductive, if members of each staff are allowed to focus more on their differences than on common corporate objectives.

Each department should identify specific actions and projects that will contribute to those goals in a cost-effective manner over the course of a defined fiscal period. The benefits and requirements of these programs should be clearly understood and communicated between the finance and IT departments.

The organization should define and implement a project evaluation technique to assess all major expenditures, including IT, and to ensure that funds are allocated most effectively in line with corporate goals.

As a result of these procedures, a common rapport develops between the CFO and the CIO and their respective staffs. Ideas and projects can be effectively proposed, evaluated and implemented, with positive results measured and communicated.

Thawing out this corporate cold war will take commitment and communication. The focus should be on measuring and obtaining results for the good of the entire organization rather than on interdepartmental differences. Emphasizing common links and interests will help both the financial and the IT staffs do their jobs better and contribute more effectively to overall corporate goals.

Failing that, they'll need to put out a call to Henry Kissinger.