In our previous blog we looked at how the explosion of data is changing the relationship dynamic between CFOs and CIOs. This blog looks at the questions that CFOs need to be asking of CIOs, to understand the potential of IT and data in their organisations and how it can support decision making.
From the CIO's perspective, the new-found focus on data represents a victory of sorts. For years, IT advocated for improved data governance and master data management — terms that could make a finance executive's eyes roll. Analytics have brought the importance of data management to the forefront in many business functions and raised the profile of IT in the process.
What questions should CFOs ask the CIO?
Despite that victory, there is still the matter of execution. To get the information and the comfort level they want, CFOs should ask the following questions:
1. Does my CIO fundamentally understand the information that is needed from the shareholder's perspective, the board's perspective, and a day-to-day management perspective? It may be increasingly important to involve the CIO in "decision-making events" to foster an understanding of the different perspectives of stakeholders. For example, many IT organisations build analytical solutions around data that is available, not data that is needed. The nuances of management reporting structures, timing of information, and value of the analysis should be built into tomorrow's solution sets.
2. What is our enterprise-wide strategy for governing data? This strategy should be as detailed as possible so that definitions are consistent across the board and the integrity of that information is well managed. CIOs can seldom drive this level of alignment without significant help from the CFO. Too often today, data governance is focused on linking various systems and tying technical data fields together. Tomorrow's data governance should include the business definition of the data as well as the technical definition.
3. Do we have the technology at our disposal to get the data we want? Corporate austerity has had a dramatic impact on IT budgets. Some even question whether or not companies may actually be falling behind because they cut back so much. Before increasing the IT budget, though, take an IT inventory to see if what you already have suits your data requirements. Many companies may find they probably have the right tool set in their arsenal, but they are not managing its use because of either technical or data limitations.
4. Is finance involved in setting IT priorities? Increasingly, the answer should be yes. CFO/CIO collaboration on IT priorities is important to increasing the impact IT investment will have on information access and improved analytic capabilities. Alignment on business cases and budgets will help finance understand IT's strategy and help push the rest of the organisation to follow that strategy.
5. Should information be considered an asset to the organisation? Many modern companies have been operating for the past 20 years on large enterprise resource planning systems that capture volumes of data on transactions, customers, and products. Many companies that use the information in the current period and archive it do not take advantage of the hidden insights. Companies should rethink their information policies and start to treat this data as a strategic asset that can help them make better informed decisions tomorrow.
Meet in the middle
In this data-driven age, CIOs and CFOs should work more closely. CIOs need to make the business aware of the information available and the way that information can be portrayed and CFOs should identify the information they need and how they want it delivered. By focusing on their relationship with the CIO, CFOs can become more of an advocate of technology spend than they have been in the past, which can strengthen the CFO/CIO relationship.
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