5 tips to bridge the CFO/CTO gap

5 tips to bridge the CFO/CTO gap

Why nurturing a strong CFO-CTO relationship is a win-win when it comes to successful finance transformation 

Since the disruption of the Covid-19 pandemic, finance and technology departments have been pushed to work together in new ways to ensure the resilience of the organisation through adoption of digital technologies in finance processes. 

Despite the disconnect, the relationship between the Chief Financial Officer (CFO) & Chief Technology Officer (CTO) is pivotal to achieving operational efficiency, driving innovation, and enabling strategic growth through effective finance transformation initiatives.

Over the past few years, the CFO’s responsibilities have grown in a few important areas - particularly in digital. Research from McKinsey & Company shows between 2016 and 2021, the share of finance leaders who say that they are responsible for their companies’ digital activities has more than tripled. This suggests that “now is the time for finance leaders to lean into the evolution of their roles and reassert themselves as strategic partners and digital enablers to the business.”

A graph from McKinsey & Company's research on the new CFO mandate showing an increase in digital oversight for the CFO.

However, despite this new mandate requiring the CFO to work more closely with the CTO, challenges such as communication gaps, conflicting priorities, and varying perspectives on technology investment often hinder alignment. 

This blog will explore five key strategies for overcoming these barriers and fostering a productive CFO-CTO relationship.

  1. Develop lines of communication

One of the most common obstacles in the CFO-CTO relationship is often a lack of effective communication and mutual understanding of each other’s priorities and expertise. CFOs may find technical jargon overwhelming, while CTOs might struggle to articulate the financial and operational implications of their technology initiatives. 

Bridging this gap requires:

Shared Learning: Implement regular knowledge-sharing sessions where CFOs can deepen their understanding of emerging technologies like AI, data analytics, and cloud-based CPM solutions, while CTOs gain insights into budgeting, forecasting, and ROI analysis.

Common Vocabulary: Develop a shared language that translates technical and financial terms into actionable insights both parties can align on.

Joint Goal Setting: Align on strategic objectives where technology directly supports financial outcomes, such as improved reporting accuracy or enhanced operational efficiency.

By improving communication, CFOs and CTOs can better align their visions and foster a culture of collaboration.

  1. Align on business priorities and budget expectations

CFOs prioritise cost control and financial stability, while CTOs focus on innovation and long-term technology investments. This tension can create friction, especially during discussions about budget.

To navigate these challenges:

Quantify technology ROI: CTOs can strengthen their case for technology investments by leveraging CPM tools and data analytics to demonstrate measurable returns, such as reduced operational costs or improved decision-making capabilities.

Collaborative budgeting: Involve both leaders early in the budgeting process to align priorities and balance short-term financial constraints with long-term innovation goals.

Flexible frameworks: Adopt a phased approach to technology investments that align with the organisation’s financial capacity while delivering incremental benefits.

When CFOs and CTOs collaborate on financial and technological planning, they create a synergy that accelerates both innovation and financial growth.

  1. Improve data governance and information security

Data lies at the heart of modern finance systems and decision-making processes. Both CFOs and CTOs share responsibility for establishing robust data governance frameworks to ensure information security and compliance, but misaligned priorities can lead to inefficiencies or vulnerabilities.

To address this:

Establish clear ownership: Define roles and responsibilities for data governance, ensuring that CFOs focus on data accuracy and compliance, while CTOs handle system security and scalability.

Unified platforms: Leverage integrated CPM and analytics platforms that provide real-time data access with built-in compliance and security features.

Proactive risk management: Collaboratively assess risks and implement preventive measures, such as advanced cybersecurity protocols and regular audits.

Effective data governance not only protects sensitive information but also enhances decision-making capabilities, benefiting the entire organisation.

  1. Establish a change management approach

Finance transformation often involves significant change, from implementing new technology to redesigning business processes. Without an effective change management approach or collaboration between the CFO and CTO, these transformation initiatives can face hurdles, such as resistance to adoption.

CFOs and CTOs can drive successful change by:

Engaging stakeholders: Involve key departments early in the transformation process to ensure buy-in and minimise resistance to technology adoption or new ways of working.

Phased implementation: Break down large projects into manageable phases, allowing the organisation to adapt gradually and minimising disruptions.

Employee training: Collaborate on developing comprehensive training programs that equip employees with the skills needed to fully realise the benefits of new finance systems and analytics tools.

A structured and collaborative approach to change management ensures smoother transitions and sustainable results.

  1. Foster continuous collaboration and education

The CFO-CTO partnership should extend beyond individual projects, evolving into a continuous collaboration that drives ongoing improvement to business processes and results in better outcomes. Building this dynamic requires a commitment to shared learning and exploration of emerging technologies.

Some strategies include:

Industry engagement: Attend relevant industry events together to stay ahead of the latest technology trends in finance systems, CPM, and data analytics.

Regular standup session: Schedule consistent check-ins to discuss progress, challenges, and opportunities for further alignment.

Exploring emerging technologies: Jointly evaluate advancements like machine learning and predictive analytics, identifying opportunities to integrate them into finance operations.

By fostering a culture of continuous collaboration and learning, CFOs and CTOs can keep their organisations ahead of the curve and drive sustained growth.

Conclusion

A strong CFO-CTO partnership is essential for organisations to successfully execute their finance transformation initiatives and unlock the full potential of their finance systems, CPM tools, and data analytics capabilities.

By addressing challenges like communication gaps, conflicting priorities, data governance, change management, and continuous collaboration, CFOs and CTOs can build a solid foundation for success. This harmonious relationship enables organisations to drive innovation, maximise financial performance, and achieve strategic business goals - making it a win-win for all stakeholders.

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