By Anna-Lee Muck, Editor-in-Chief
Enterprises worldwide don’t just agree that IT transformation is a priority in their organisations - they’re putting big money behind it. In a global survey of 500 CEOs, COOs, CIOs and CFOs conducted by Forbes Insights and Dell EMC, over 70 percent of respondents say they are investing in initiatives including big data platforms, cloud services and social media. Most respondents are planning to dedicate up to a quarter of their total budgets (including people, technology, services, etc.) to IT modernisation projects this year, and the number of organisations dedicating up to 50 percent of their budgets is rising nearly fivefold by 2018.
Yet, despite higher investments in time and money, many organisations aren’t seeing the significant improvements in customer service and competitive advantage they envisioned when embarking on transformation. According to the survey findings, one key reason for these disturbing results is directly related to two pivotal players - CIOs and CFOs - and their struggle to work together as a cohesive team. Ninety-six percent of survey respondents reported that CIO and CFO collaboration is critical to IT transformation success. However, a disheartening 89 percent cited significant barriers – ranging from outdated ideas about the role of CIOs to obsolete reporting structures – to this collaboration.
But there is a select number of enterprises seeing success in their IT transformations. These companies report the strongest competitive positions and high growth, with gains in both sales and profits of seven percent or more in the past year. It’s from these enterprises that we can find best practices for overcoming the barriers of CIO/CFO collaboration to succeed in IT infrastructure modernisation.
Below are six ways successful IT transformation senior leaders are fostering a better partnership between the CIO and CFO:
1. Put Experience to Work for You
Those experienced at IT transformation are more likely to recognise the importance of CIO/CFO collaboration. Sixty-seven percent of IT transformation leaders report that, when appointing new CIOs and CFOs, a proven track record is essential.
2. Update Reporting Structures
The survey uncovered changes in management strategies, with nearly half of respondents saying the Chief Information Officer role holds greater influence inside the C-suite and now reports directly to CEOs and COOs. The payoff — 60 percent of CIOs see rewards for helping the business succeed.
“We have direct communications with our COO and the vice president when we’re trying to get buy-in for transformation projects. But the analysis of a proposal’s underlying business value is done in conjunction with the CFO and his team.” - Carlos Gonzalez Alvarado, CIO, Royal Resorts
3. Measure and Reward Performance on Business Outcomes
IT transformation leaders place greater importance than their peers on the business acumen of CIOs — more than half (54 percent) of them say it’s critical to the success of an organisation. In contrast, the vast majority of less mature organisations did not draw the same parallel.
4. See ROI Numbers As a Guide vs. a Hard and Fast Requirement
Leverage differing creative and financial points of view between CIOs and CFOs to build risk-balanced investment portfolios. Knowing that IT transformation leaders are 2.5 times more likely to see ROI in 12 months or less could greatly influence investment decisions.
“It’s great to create investment models, but don’t fall in love with them. Innovation doesn’t always work according to plan, so we’re ready to keep making adjustments along the way.” - Mike Bufano, CFO, Panera Bread
5. Set Milestones for Tracking Higher-Risk Initiatives
Mitigate inherent risks of more experimental transformation efforts with closer CIO/CFO collaboration. Together, the CIO and CFO can design a more iterative investment approach, avoiding the trap of higher upfront costs in the hopes of garnering greater payouts later.
6. Turn Your IT Pros into Consultants
Related to the sentiment that CIOs are increasingly being judged by their ability to shape business models and act as strategic advisors, there is opportunity to harness the expertise of your organisation’s technology brain trust and use it to turn the entire IT department into a resource that drives profitability.
Click here to read the full report from Dell EMC and Forbes Insights titled, "IT Transformation: Success Hinges on CIO/CFO collaboration."