3 things that make a CIO-CFO dream team

Thistle, who’s been recruiting C-level executives for over three decades, says that CIO candidates generally prefer not to report to CFOs because it signals that the organization considers IT as more of a cost center. By contrast, when a CIO reports directly to the CEO, it’s viewed as having a seat at the table. “Being a senior member of the executive leadership team contributes to a CIO’s success in driving business process change,” she says.

But some CIOs find it very natural—and even useful—to report to the CFO. “The CFO understands the real business value of the transformations you’re pushing for,” says Amcor Global CIO Joel Ranchin, who reports to the CFO. “They also know the potential risks. This balance between value and impact is key to successful transformation. I used to think it’s a sign of maturity when the CIO reported to the CEO versus CFO. I’ve changed my thinking on that. There are many advantages to reporting to the CFO—as long as the relationship is based on trust and constructive growth discussions.”

Of course, there are other places where a CIO might report. Some technology companies, such as AMD, create and sell products that are based on information technology and are also used within the IT department. In these cases, it makes more sense for the CIO to be part of the CTO operation.

Mark Papermaster, CTO of AMD, runs an organization that includes customer facing CTO functions, large elements of R&D, and the IT function, which is headed by the CIO. “Every day, feedback goes back and forth between the IT department, which consumes the technology we make, and the R&D side of my organization,” he says. “That way we get immediate feedback on our products and services, and we gain a deeper understanding of customer requirements.”

Even in the case at AMD, where the CIO is in the CTO organization, what’s essential, says Papermaster, is they operate seamlessly as one team with the CFO. He supports a clear line of communication between the CIO and the CFO, knowing what’s most important is that each knows the other’s business. The CIO should understand what the CFO is trying to achieve with the company, and know which technologies will impact both the bottom and top lines. Equally, the CFO should understand the CIO’s views on digital transformation.

How well the CIO understands finance

A study conducted by Gartner, detailed in the report “CIOs: Improve How You collaborate With Your CFO,” found that when CFOs are asked how well their most senior IT executive understands the impact of technology on finance, more than half indicate that their IT counterparts are lacking in this area. But surprisingly few companies choose CIOs for their financial skills. “Financial knowledge is not something clients typically ask for when recruiting a CIO,” says Thistle. “However, the CIO will be expected to understand and manage IT costs and budgets, both Capex and Opex.”