15 December 2023
What the CFO needs to teach the CTO
4 min read
Most technology leaders might not like the message I will convey here. But I’ll get it out there anyway because it is a harsh truth that we tech-savvy self-proclaimed intellectuals need to take to heart. And that is that there is a lot to learn from how our colleague CFOs run their departments and their work.
The truth is they know more than we do. And because of it, they make better decisions.
The question is; are we willing to learn to do the same?
In the business C-suite, we are required to make difficult decisions. The decisions that potentially make or break the company. The decisions that impact the financial position of the company whether we are deciding to buy another company (acquisition) or whether we decide to implement or even build a new product. Decisions that ultimately aim to positively impact our position in the market or tilt the playing field in our favor.
When weighing the pros and cons in such situations, it is common to provide a business case. Heck, the business case has even transformed to be part of your yearly business cycle. A budget is nothing more than the intention to carry out certain activities that cost money, with the calculated business case of the benefits we receive. And every year, every company has a department and a role dedicated to the process. Most companies are in that very process at this time of the year.
And what is a clear sign of the Finance Department getting ready for the next budget round? Right, the rest of us get long spreadsheets with requests for information. Information on your team and how this will change in the coming year. Information on the applications you use in your daily work and the licenses tied to those. Etc, etc. All this information flows continuously into the finance department either manually or in an automated fashion.
In essence: they are accumulating the information they need to make critical business decisions.
For IT, we are unfortunately not there yet.
Some of you might disagree. And that is fine because some of you might already be on par with your counterpart in Finance. But in my experience, this is not the case in many organizations.
Let me illustrate the difference with an example.
It involves three simple questions and two quick visits to determine whether your IT organization has the same fundamental base of information to inform your critical decisions as much as the Finance office.
1. Find your way up to the office of the CFO and ask the following questions:
- How much money do we have?
- Where is that money located, i.e. where are our accounts?
- How much money do we have available to invest?
Under some pressure, I can guarantee that most finance departments can get that information to you within the hour if need be.
2. Move over to the office of your CTO (and I hope you don’t have to get to the basement for that) and ask the same basic three questions:
- How much software do we have?
- Where is that software located, i.e. where are our repositories?
- How much Technical Debt, or the inverse ‘Innovation Capacity’ do we have?
Unfortunately, most IT departments are not able to provide an answer to these three fundamental questions within the day. Meaning they are missing some of the most basic insights into the status quo, which is so important in making critical decisions.
The good thing? Help is nearby.
If you find yourself to be lacking the basic insight into your IT landscape, turn to your CFO and ask for help. Because what is already engrained in the basic fabric of what it constitutes to make decisions from a financial point of view, still needs to become common, or even best practice in many IT departments.
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