Have you heard the old saying about how CFOs and CIOs historically get along like oil and water? That CFOs are gate-keeping, naysaying bean counters and CIOs are technocrats who want to control every aspect of technology used in a company, no matter how much it helps or hinders productivity? And simply put, that the pair just don’t get along?
There may have been a time when this was an accurate picture of the CFO-CIO relationship. However, in today’s world it isn’t the case.
Take business transformation initiatives as an example. These are growing more prevalent as organizations rethink their business models and organizational structures (and the systems that support and enable them). In fact, Gartner expects companies to spend $150 billion on these programs this year, growing to more than $201 billion by 2019. Much of these transformations involve moving from legacy on-premise IT infrastructures to cloud-based, Software-as-a-Service (SaaS) offerings. So while CIOs may be taking the lead on IT transformation, they are increasingly partnering with their counterparts in Finance to understand business transformation and the financial impacts of those changes.
In most companies, however, there is plenty of work yet to be done. In a recent in article by our friend Michael Krigsman (an influential researcher, writer and host of CXOTalk) he wrote that nearly half (46 percent) of CFOs rely on gut feel and instinct to make decisions. It doesn’t help that one in four CFOs believe the IT systems their company uses struggle to provide them with the data they need, and that 23 percent struggle to extract meaningful insights from the data IT provides them. Fixing this will require a close collaboration between Finance and IT.
For role models in this transition, Finance and IT execs should take a close look at how their counterparts at La Quinta Holdings, Inc. are creating a continuous forecasting environment across 350 corporate-owned hotels. CFO Keith Cline and CIO Vivek Shaiva have worked shoulder to shoulder on a new approach that allows hotel managers to optimize revenue efficiency by predicting how the decisions they’re considering will impact crucial performance metrics like Revenue Per Available Room (RevPAR). They can also use external Big Data to pinpoint optimal room pricing for a specific area, or they can combine ZIP code-specific demographics with local wage trends to identify where potential new properties will be most profitable.
That’s the kind of magic that happens when CFOs and CIOs shake off those outdated perceptions and work together as strategic partners in the business. Read more about our work with LaQuinta Hotels here.