Building trust between the CIO and CFO - Workday survey highlights the gaps

In our modern digital age, there's growing recognition that every business has to become a technology business to survive and thrive. This in turn means that IT teams have to work much more collaboratively with line of business functions to help them harness technology effectively. All perfectly obvious and sensible in principle, but out in the real world, there are practical obstacles that get in the way of achieving this happy synergy.

A Workday survey released today points up some of the barriers to CIO/CFO alignment. The responses from 1,060 finance and IT leaders paint a picture of lack of adequate communication, low trust in the integrity and usability of data, and poor cross-functional skills and knowledge. I spoke to Ernesto Boada, SVP of Business Technology at Workday, to discuss the findings and what needs to change so that IT and finance teams can get past these barriers and start working in harmony.

One of the most important changes lies in the hands of the IT function. IT must become much more of a proactive service provider to all parts of the business, not just finance. Boada says:

One of the important things nowadays is for CIOs to be much more closer not only to CFOs, but other business units. So we can not only become that IT trusted partner, but be much more a strategic and trusted partner, and get the chance to at least be on the table and ask questions. So it can help us to truly understand where they're heading, what do they need?

But the survey shows that many organizations still have a long way to go to get to that point in CIO/CFO alignment. 41% of CIOs report that they're not invited to meetings where critical finance decisions are taken. At the same time, 51% say that the expanding scope of the finance function is at odds of their aim to eliminate IT complexity. These findings make it clear that the two sides aren't talking to each other, with CIOs feeling they're excluded from key decisions and not consulted even when those decisions directly impact their own remit.

So does this mean it's up to CFOs to open up the conversation? No, first of all CIOs need to regain their trust. Just over half (51%) of finance leaders in the survey say that much of the data they have to work with is siloed, not in the right format, or not readily available, leaving them forced to make decisions based on gut instinct. Overall, only 44% of the finance and IT leaders surveyed are confident in the integrity and usability of their data.

Building CFO confidence

At a time when forward-thinking enterprises are looking to become more data-driven, these are sobering statistics that reflect the challenges many face. Boada says the first step has to be for IT to develop reports and automation that will help build confidence in what it can deliver. He reflects on initiatives that have been undertaken at Workday to automate finance processes and have demonstrated what's possible. One example is combining financial data on equity compensation programs with HR data. He explains:

How do we bring that data together and mix it with HR data on a need basis? So then finance doesn't have to do that on their own, through files, Excel, and things like that. We do that on an early basis, and then we're able to create exception reports and data that allows them to double click [into the underlying detail] if they want to.

So we are taking a lot of that enrichment and calculations out of their hands and have them at their finger tips. I think that has been a key for us, truly, to build that trust.

A lack of cross-functional skills is another gap exposeed by the survey. Finance teams say that their lack of IT skills and therefore having to rely on IT is holding them back. At the same time, 49% of IT respondents admit they lack finance literacy and therefore find it difficult to engage with colleagues on finance issues. That's another important element for IT to address in order to give the necessary support, believes Boada. He comments:

As we understand more — because believe me, we are not experts in finance, but we're trying to get better and we are training our people to truly be able to speak the language — we can continue taking those pieces out of their hands and lead them to step up and be able to be more analyzing the data than creating the data.

Legacy ERP is seen as an obstacle by over half of the respondents, who say it's not flexible enough. Both finance and IT agree that change is needed. But finance teams are often reluctant to go ahead with technology upgrades because they want to avoid the accompanying disruption. Boada says it's important not to confuse stability with stasis. He says:

Things continue evolving. And the next thing will come up pretty soon. So we need to keep ourselves current ...

Stability doesn't mean that you're not changing. Stability means that you can be reliable, but we need to continue evolving.

Measuring IT value

IT teams need to exercise tact and diplomacy to persuade colleagues to move forward. He adds:

We need to have some sales skills and interpersonal skills because for us, it's also to be able to help them realize the importance of avoiding that tech debt. Sometimes it's tough. If we let it go longer and longer, it becomes more expensive and becomes a much more difficult conversation.

IT should also make sure that it measures the value it's delivering to support the business case for action, says Boada. He suggests keeping track of time savings, redeployment of headcount or revenue gains that can be attributed to components that IT has made possible. This helps the perception of IT as a value driver rather than a cost center. He elaborates:

We have the opportunity to truly measure everything that we do now, more and more what is the value that we're doing, instead of being that cost centre that we've been in the past, that this is the first place to go and cut. We believe that we have an opportunity to truly continue bringing more value, as long as we are on the table to be able to ask the right questions ...

I think that helps us work to change the discussion. That's helped for the relationship to be changed, because they know that if you have a really good, not only trust, as I said earlier, but a strategic partner that can bring value to the table, relationships will change significantly.

My take

Organizations need to shift the perception and culture of IT to get technology experts working alongside business as partners. I've been writing recently about the concept of 'co-code', where IT professionals work collaboratively with business colleagues to deliver new functionality and automation. Others talk about the concept of 'fusion teams' where IT specialists and business colleagues develop software together. I've also heard people say that in digital-native organizations, people talk about business systems rather than IT. In my view, all of these perspectives are part of a single trend in which the old IT function is evolving into a provider of technology services to help the business achieve its goals. The Workday survey usefully highlights some of the challenges that need to be overcome in many organizations before this can become a reality.