In today’s world of tighter margins and focus on cash control, value for money is at the forefront of every CFO’s mind. According to a Gartner CFO Technology Study, a majority of CFOs - about 85% - either lead or act as a member of the capital decision-making group in organisations.
While this makes selling a technology proposition to CFOs an arduous task, CIOs and IT leaders must do so, perhaps more than ever before, considering how organisations are faced with dramatically compressed innovation cycles and must simultaneously focus on both efficiency improvement and transformation to stay relevant in the marketplace.
With an ever increasing need to speak the same language as the CFO team, here are five tips CIOs should consider before issuing a business case.
Sell the ‘I’ not just the ‘T’: In this age, where data is the new oil, it is increasingly important to sell the improved insight, analysis or knowledge that will be gained and not just the speed, efficiency or reach of any technology investment. It would be pertinent to focus on, for example, how it will help your business access or service current customers better or indeed reach new customers.
Link to business strategy: Not a new tip but one that is continually not satisfied by CIOs in submitting investment decisions. This is not just a tenuous link to company strategy but a detailed demonstration of how strategy will be specifically supported or satisfied via the investment. CFOs often have carriage of strategy delivery—so think like they do and clearly articulate the link.
Involve finance in the IT strategy development process: Make Finance a part of the strategy development and investment prioritisation process. This will be useful not just in getting their buy-in upfront, but also in making them joint ‘owners’ in delivering the IT services to business.
Clearly show the value: Your proposal must have a quantifiable value proposition. It must demonstrate a greater business impact in addition to optimising costs. You should talk about ROI and why your proposal should be prioritised over other initiatives. Demonstrating the positive impact on the business rather than just discussing IT effectiveness will strengthen your case.
Build strong relationships through engagement: Effective and successful CIOs are proactive and spend time with leaders across their organisations. The best way is to regularly communicate with CFOs and their teams. In particular, avoid waiting till everything is more than complete before sharing it with the CFOs, particularly where there might be ‘surprises’ - this strategy never pays off.
The challenge for CIOs is to be aware and empathetic to the relationship between Finance and the rest of the business and work accordingly. Cost-competitiveness and innovation need not be mutually exclusive.