In today’s business world, a company’s success will be determined by the company’s CXOs ‘ relationship quotient, with the company’s primary focus on the synergy they will bring into the day-to-day operations. The CFO and the CIO of an organization are two people who will play a major role in this journey; the importance of their relationship will grow as the company embarks on the journey to digitalization.
With technology playing a greater role in creating competitive business advantage, even CFOs will need support from their IT counterpart in order to operate effectively on a daily basis. Similarly, the CIOs should bring major technological changes to the enterprises in line with the corporate strategy for which on the investment front they will need CFO support. It is therefore imperative that CFOs and CIOs work closely together to build a successful future digital enterprise.
Use a Measure of Performance approach: Calculation of conventional investment return (ROI) may not be appropriate for IT investments. It is not always an easy task to calculate the profitability of technology investment, as many such investments are not suitable for ROI calculation. I am therefore always in favor of an IT investment Measure of Performance (MoP) approach. For instance, while implementing your organization’s Customer Relationship Management (CRM) system, ROI should not be the criteria for determining the investment level. Instead, the decision should be based on standards such as how many deals it enters, how it affects customer satisfaction, etc.
Be a proactive business leader than a reactive one: Do not hesitate to make big bets if a vast investment is needed for the technology project. Future business needs should be identified and delivered accordingly rather than cost reduction and cost savings. Keep a cautious eye on spending at the same time. If necessary, before firing cannon balls, fire bullets. Similar to a mutual fund portfolio, treat your technology portfolio: while investing in different technologies is a must, certain risks will be associated with them. CFOs need to play a major role in balancing technological investment risks and returns.
Destroy to create: Follow the “creation-destruction-re-creation” cycle. Products, processes and practices are becoming obsolete with changing times. Take joint calls that are not supposed to carry on past IT practices because if you are steeped in history, you will live to regret it.
Mahabharat’s epic battle was won through a combination of Lord Krishna’s good strategy and Pandavas ‘ effective execution. However, none is a mere executor in the modern business era as Mahabharat’s battlefield. Everyone has to play a strategic role like Krishna. Strategic collaboration between CIOs and CFOs will create a successful business roadmap while ensuring that their business is sustained and growing.