CIO and CFO, or CFO, must establish a strong relationship. Cloud computing, mobility, and big data are driving the shift from functional silos (such as finance, technology, or human resources) to cross-functional partnerships based on a consistent motivation to promote collaboration.
Just as customer experience innovation begins with a better understanding of the customer, understanding the organization’s financial factors and investment goals can help every CIO become a more effective business leader. However, building a meaningful partnership with the CFO can be difficult.
Given the important value of establishing a strong partnership between the CIO and CFO, ZDNet asked ServiceNow CFO Gina Mastantuono to share her advice with the CIO. She is a guest of CXOTalk series. Here are his tips:
Digital transformation and DAF/CIO relationship
If you do not align with the CIO early in the process, you will not be able to achieve good results. This alignment is especially important, now more than ever. I am very lucky and lucky to have such an amazing CIO [chez ServiceNow] Than Chris Bedy. We have worked together from the beginning.
Before we budget for the project, we will discuss the business needs and the challenges we are trying to solve. Then we work together to ensure that we have the necessary investment and we have the team. This is to invest capital on the one hand, and on the other hand to ensure that you have the internal ability to do so. If you are funding something and the business is not ready to deal with it, it is a waste of money. Know this from the beginning.
On the other hand, when finalizing, you have to make sure that we really hold the organization accountable for the return on investment, the results we talked about at the beginning of the project, and work together from start to finish.
The DAF / DSI relationship is connective tissue, which can help organizations go beyond the curve and understand what we need to do in the future. It creates value in the various organizations of the company in a horizontal manner.
We push our team to be more collaborative. If you do not work for the entire company and focus on only one area, you will not be able to achieve the great results that digital transformation can bring. If we are to truly succeed in digital transformation, we must break silos.
Teamwork and innovation
As you become a leader, building relationships within the organization (and not just within your team) becomes more and more important. Cross-functional collaboration is the best way to ensure good results. It is an important part of the future of leadership, the future of CFOs, and the way they think.
Never forget the big picture, and always know that people come to work every day to do their best. Therefore, let yourself stand in their perspective and look at cooperation with empathy instead of just focusing on what needs to be done to get the job done. If you help others achieve their goals, then you will all be better able to achieve the larger goals of your business.
Obviously, CFOs always pay attention to numbers, and more importantly, sometimes pay attention to reducing expenses. However, if they don’t think about innovation, they may miss the opportunity just by sitting on the sidelines. Modern CFOs learn to understand the importance of continuous innovation and look at digital projects from the perspective of maximizing business value.
I think planting cakes has more benefits than saving every piece of cake.
At ServiceNow, we consider different types of R&D investments:
- We have R&D, which we call Horizon One, when we expect to get a return on investment within a year. This accounts for approximately 60% of our expenditures.
- Then we have Horizon Two, which is about emerging technologies and new products for future growth. We expect to get a return on investment within one to three years. This accounts for about 30% of our expenses.
- Then there is Horizon Three, which includes future bets on next-generation technologies for future growth. We hope to see a return on investment in this area within three to five years. This accounts for about 10% of our expenses.
As CFOs, we need to feel comfortable and understand the need for experimentation. Not all projects will produce the return on investment you expect. You have to give the company some freedom to do this.
By fully collaborating and working with your CIO, your chief revenue officer, and your chief product officer, you can make these bets and trials easier.
Advise CIO during discussions with CFO
First, he must talk to the CFO in terms that he understands. Return on investment is always my starting point: “So you want to spend all your money. Okay. What are the advantages? What return on investment will we get? This must be a rational and reasonable return on investment. There must be a strong behind it. Business case.
Make sure that the CFO is involved from the beginning so that they are not caught off guard by the huge unplanned investment needs. Explain the long-term, strategic, two- or three-year planning scope and what you need to do during that time so that there are no major surprises and they can prepare for them. This will always help get the support of the CFO. Understand the overall impact on the company and formulate it.
The role of the CFO is to hold people accountable. Not everything will be rewarded. You also need to know when to stop. You need to know when to say, “Do you know? It won’t work. Let me stop the loss as soon as possible.”
Source: ZDNet.com
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