Gartner: Strong CFO-CIO Partnerships Are Key to Digital Investment Success
April 20, 2022
30% of CFO-CIO relationships are
characterized by strong collegiality and
business centricity, according to a recent
survey by Gartner, Inc. These two key
attributes define a strong digital
partnership without which organizations
struggle to find funding for digital
initiatives, keep digital spending in line
with the budget plan, and achieve intended
digital business outcomes.
Figure 1: Financial Management Behaviors for Digital Investments
Five Key CFO-CIO Actions That Enable Digital Success
Gartner experts have identified five CFO-CIO
actions that enable digital success. These
practices are unique to digital and enabled
by collegial and business-centric
relationships between finance and IT. The
five actions include:
Progressive CFOs shift the “digital capex
versus opex” discussion from short-term
profitability to long-term value creation,
collaborating with their CIOs to highlight
the operational and strategic benefits of
digital investments funded from opex. For
instance, instead of focusing on EBITDA
alone, they track how digital investments
impact metrics related to workforce
productivity, operational margins and
revenue-generating activists, etc.
CFOs should expand how they measure digital
success to include the technology and
operational metrics that CIOs emphasize.
Metrics such as those related to user
engagement and participation (e.g., the
number of users or percentage of
interactions that are digital) are often a
better fit for digital investments than
traditional financial metrics.
CFOs should lead their teams to work with IT
to build an updated metrics cascade that
includes more appropriate, granular KPIs as
a shared framework for evaluating digital
investment performance. Finance and IT can
use this framework to better understand how
digital initiatives impact key KPIs by
linking technology KPIs (e.g., user
engagement), intermediate outcomes (e.g.,
higher sales volume) and financial outcomes
(e.g., increased revenue).
CFOs should use early roadmapping
discussions with IT as an opportunity to
share expectations for how technology should
be used to advance the enterprise’s
big-picture strategy, and how digital
investments impact corporate financials.
Finance can do this by conducting financial
analysis and providing early input on the
financial feasibility of technology plans.
Finance should collaborate with IT to communicate the value of digital costs in the context of measuring performance improvement in, and IT’s contribution to, the business objective of maximizing organizational value. For this reason, service-based costing models that are less detailed but emphasize the “output” created by a cost are most likely to create the kind of transparency CFOs need.