Best Practices

Time to Align

by Kae Arima

Why successful transformation initiatives and stronger organization agility demand first recalibrating the CFO-CIO relationship.

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Volatile market conditions. Supply chain challenges. New reporting requirements. There’s no question that CFOs and finance leaders are operating in a period of incredible flux—tasked with helping to get an organization future-ready, even as it becomes harder to predict what might be coming around the corner.  

The role of finance is evolving into one of strategic value creation. Leaders are now required to provide insight that can drive operational change and guide business strategy, and ultimately provide long-term value to stakeholders. To deliver on this expanding remit, CFOs need to look to CIOs as strategic partners because technology is critical for finance to produce what the business needs.  

A recent Workday survey of 1,060 finance and IT leaders found a positive correlation between the level of finance-IT alignment and an organization’s digital transformation maturity. Closer collaboration between these teams can unlock new efficiencies and fuel a cycle of faster, continuous innovation, which I’ve seen firsthand. 

Data is the fuel for finance transformation, yet many organizations still have challenges when it comes to accessing and trusting the data they have. The survey found less than half (only 44%) of the finance and IT leaders are fully confident in the integrity and usability of their data. This lack of confidence makes it difficult to make data-driven decisions. In fact, more than half (51%) of the finance leaders surveyed admitted to making gut decisions where finance is concerned because data is siloed, not in the right format, or not readily available.  

To build greater confidence and drive transformation, CFOs and CIOs need to foster a deeper partnership between their finance and IT organizations. The CFO-CIO relationship must be a top priority in every organization today and is the key to successful enterprise-wide transformation.  

Recalibrating the CFO-CIO Relationship 

True CFO-CIO alignment requires both intention and action. Below, I’ve provided some concrete ways that CFOs can strengthen this relationship and foster greater alignment so both finance and IT can move forward—together.  

Build cross-department literacy 

For successful digital transformation of the finance function, finance and IT leaders need to start speaking the same language. The CFO-CIO Indicator found that both finance and IT leaders agree there is a need to increase cross-functional skills across both teams. CIOs cite a lack of technology and data skills within finance as one of the top barriers to digital finance transformation. Meanwhile, CFOs attribute a lack of financial literacy skills within IT as their biggest barrier to digital finance transformation progress.   

Finance’s reliance on IT for data access and reporting creates a barrier to generating accurate, usable insights. IT wants to see finance gain deeper tech skills and embrace emerging technology to solve problems. But nearly half (49%) of IT leaders surveyed feel they are under pressure to innovate finance technology despite limited financial literacy, revealing an opportunity for greater training and partnership with finance.  

Hiring managers may not be able to find many accounting pros who also love to code or IT managers who moonlight as accountants. But that doesn’t mean basic IT literacy is out of reach for finance professionals and vice versa. Exposure, such as with cross-disciplinary team meetings, is one way to make these concepts feel less foreign. But also consider more formal cross-training initiatives—whether lunch-and-learns or webinars—to help finance and IT team members build comfort in an unfamiliar arena. When hiring new talent, make clear to candidates that collaboration between finance and IT is at the core of the team’s success.  

Break Down Data Silos 

When IT and finance teams are sipping from separate data pools, true collaboration becomes all but impossible. Yet that’s the sorry state of things at nearly half of organizations: less than half (49%) of survey respondents reported their companies have a single unified view of all financial, operational and people data.  

But the time for change is now, as global environmental, social, and governance (ESG) regulations take shape, and customers increasingly seek corporate transparency on this front. Already, more than half of financial leaders in the survey say they’re increasingly reliant on non-financial data to make financial decisions—with ESG ranking as the top type of non-financial data that helps generate insights and drive financial decisions.  

Invite IT in Early 

IT can’t shift from cost center to value creator if it’s viewed merely as an order-taker, or a resource to be deployed once the finance department knows what it needs. Yet too often, IT is left out of strategic finance conversations, until they’re all but over. Forty-one percent of finance leaders admit their CIO does not have a seat at the table during critical finance meetings—even when technology is essential to solving a challenge.  

Bringing CIOs into finance-related senior leadership meetings early can strengthen the relationship between the two departments. It can also save time and resources—say, if the CIO spots an interoperability issue early on, or flags an automation opportunity that the finance team might have overlooked.  

At the same time, CFOs should make clear to their IT counterparts that the finance team is available to join conversations about technology initiatives. Bringing the finance perspective to non-finance projects early on means more chances to spot risks, identify opportunities, and leverage efficiencies before the project plan has been fully detailed.  

Architect for Experimentation 

Digital transformation is an area where CFOs and CIOs have historically chafed: finance leaders may push back on what they see as excessive IT investments or lackluster value creation. IT leaders counter that deferring spend today means fewer options in the future and longer time-to-value. That friction, if left unchecked, can threaten both the success of the proposed initiative and the speed with which it’s tabled, if a launched initiative doesn’t prove fruitful. 

Establishing effective governance for large-scale IT investments can smooth some of those frustrations and minimize miscommunications. Which members of the C-suite are involved in determining IT spend and priorities? What metrics will be tracked, and what threshold might signal project cancellation? What types of initiatives require portfolio review?  

If your organization doesn’t already have a digital sandbox or pilot process clearly established for experimentation, it may be time to assess one. Here, too, cooperation and dialogue between the CFO and CIO are key. What will the process be like for identifying promising capabilities and tools? What pilot length and duration will help determine large-scale implementation, and how will value creation be measured in that time?   

The CFO role has undergone a major evolution in recent years—and the shift continues. As finance leaders embrace their larger purview and more strategic perch, they’d be wise to also rethink their – and their teams’ – relationship with IT. Because while much of the future remains uncertain, what’s clear is that better CFO and CIO alignment can drive trust, business success, and strategic results. 

Kae Arima is Vice President, Finance at Workday