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One is a saver; the other a spender. One reduces risk; the other takes leaps of faith. One tends to base their decisions on numbers; the other on potential.
This is the traditional view of the differences between the CFO and the CIO, whose relationship is often characterized by tension over investment in technologies. But now the sweeping impact of digital transformation is making that relationship more nuanced.
At first glance, FT Focus’s global research of 555 senior executives in IT, Finance and Infrastructure/Operations roles seems to suggest that the CIO and CFO remain some distance apart. Nearly half (47%) of leaders say digital transformation has made strategic differences between finance and IT leaders more not less pronounced, and a third (32%) say that it’s becoming harder for the IT function to track the impact of new technologies across the business.
But this is far from the whole story. Significantly, 81% of finance executives say that digital transformation has led to greater trust between the IT function and the rest of the business.
When asked what the IT function should prioritize to support growth over the next three years, finance and IT leaders were entirely in tune on their top three priorities: automating tasks to free up resources; improving management of real-time data; and providing a clear roadmap for emerging technology.
That increased trust hints at the impact of digital transformation on C-suite dynamics, and the research goes on to suggest that we’re moving away from clearly defined C-suite roles. Almost half (47%) of all respondents say that responsibilities have become more blurred – a figure that rises to 53% of finance respondents.
That blurring might have something to do with members of the C-suite working together in new ways. Two-thirds (68%) of respondents say that digital transformation has increased collaboration across the C-suite when developing new products and services. And 31% say that IT-related initiatives are now run by all leaders – instead of being owned by IT.
Research from Deloitte supports this view. It recently coined the phrase ‘the symphonic c-suite’¹, referring to the need that the c-suite now has to work together towards a common goal, in a way which mirrors the dynamics of an orchestra.
“If you fast forward 15 years, you're going to have one person that looks after all technology and all digital,” says Thames Water’s chief digital officer John Beaumont. “The CDO and CIO role will come together over time in pretty much every sector.”
Strategic gaps and differences of opinion
If technology innovation is now everyone’s job, where does that leave the CIO? One way to answer the question is to look at the role in the context of the CEO’s changing relationship with technology. More than half (56%) of leaders say that the CIO and CEO are deeply aligned on technology strategy.
But that closer strategic link is not felt throughout the C-suite, with the figure dropping to just 30% for the CIO and the CFO. It is not difficult to work out why: digital transformation is pervasive, and proving its ROI is complicated. But the CIO and CFO cannot agree on what causes them to clash most. Finance respondents point to accountability for IT investments and allocation of IT investments, while IT respondents say it’s investment decisions relating to new products and services.
One way to bridge this gap is to create roles that focus on the finance of IT. At Danske Bank, for instance, Fredrik Lannerberth serves as CFO Group IT and is responsible for serving all the financial needs of the technology side of the business. “I would definitely say that the IT leadership and the CFO have come closer together,” he says. “They have formed, in some instances, an alliance to ensure an optimal use of IT and an optimal outcome of IT for the group to benefit as a whole. These two leaders are among the few executives that have a group perspective.”
Deloitte’s CFO Insights report², meanwhile, suggests giving IT and finance employees experience of each other’s domains: “One solution for bringing the [CIO and CFO] relationship even closer is to borrow from the finance playbook: make IT executives do business rotations and vice versa [...] the business analysts of the future are going to be those functional executives who rotate in IT and finance.”
The FT Focus research suggests that when they do come together – whether through shared teams or secondment opportunities – they may be surprised to find out what they have in common. When asked what the IT function should prioritize to support growth over the next three years, finance and IT leaders were entirely in tune on their top three priorities: automating tasks to free up resources; improving management of real-time data, and providing a clear roadmap for emerging technology.
Encouraging further blurring of roles so that the CIO and CFO address these priorities collaboratively – instead of as two opposing sides – will make the process of digital transformation much smoother. It is time to build on the growing trust between CIO and the rest of the C-suite, discard the old stereotypes, and work together.