CFO Communication 101

Convincing the senior vice president of call center operations that a new VRU is needed to increase customer satisfaction and reduce hold time is easy. But convincing the CFO, or the executive who controls the purse strings, of the same need is a different matter altogether.

That's because CFOs, IT governance boards, executive committees and in some cases CEOs and boards of directors, speak a different language when it comes to running a company and managing expenditures and IT investments.

The Numbers Game

Chief financial officers, obviously, want to talk about numbers. Communicating in a language they understand will go a long way to gaining IT investments. "You don't walk into a business leader's office and talk to them about the specifics of EAI," says Jim Lester, CIO, AFLAC (Columbus, GA, $37 billion in assets). "But you should talk to them about how the technology leads to greater efficiency, cost savings and productivity.

Dan Amos, AFLAC's chairman and CEO, "is not a very technical person," Lester adds. "But he is very open to technology and he has a good grasp of how technology impacts the business. Our chief financial officer is also highly educated about technology and is aware of the importance that technology plays in our company."

CIOs and IT leaders are finding themselves justifying IT expenditures in the CFO's office more frequently than in recent years because of the current economy and subsequent IT belt tightening, according to Tony Cioffoletti, president, Business Technology Alignment Group (BTAG, Valhalla, NY), a technology and business planning consultancy. "The pendulum has swung," he says. "A while ago the chief information officer reported to the CFO. Then the CIO got to report to the CEO or the board of directors. But now many more are reporting to the CFO because chief financial officers are looking at IT spending from more of a cost-containment perspective."

Michael Aubin, chief operating officer at MetaServer, a New Haven, CT-based business process integration (BPI) services provider, agrees that the "control" of IT has once again flipped. "It seemed for a while that the IT side of the business was controlling a lot of things," such as how long a project would take to be completed, Aubin says. "The business just seemed to have faith that the information technology organization was making the correct decisions. But now the business wants to control the game again and they are very concerned with information technology costs and timeframes."

Whether the IT leader is reporting to a CFO, COO or other business leader, many of the issues remain the same. For instance, while some CIOs find themselves justifying expenditures to a CFO, others find themselves approaching governance boards or committees for approval. "The CAC, or Capital Appropriations Committee, has to sign off on many things that have to do with technology," says Michael Binns, CPCU, vice president of business and technology integration at Los Angeles-based Farmers Insurance Group ($12 billion in total assets). The CAC is headed by the chairman and includes many senior vice president business leaders, as well as the chief information officer, Cecilia Claudio.

Show Me the Business Value

AFLAC's Lester also doesn't report directly to the CFO, but instead reports to the COO. "We actually have a governance process for all projects," he says. "We score them with an objective scorecard approach and the project management office PMO reviews the projects and makes sure they are in line with corporate strategy." However, Lester adds, for larger strategic IT investments—such as the $60 million that was approved last year for a company-wide IT transformation that will enable AFLAC to implement future technologies—he works directly with the CEO, CFO and COO.

The first thing a CIO should remember when getting ready to go through an approval process for an IT project is that the project isn't about technology, it's about the business value. According to Cheryl Rogers, vice president and chief financial officer, AXA Corporate Solutions Life Reinsurance Co. (New York, a division of AXA Financial, $483 billion in assets under management), the focus of any presentation to a business leader needs to center on results and the bottom line. The project "can either impact expenses and reduce costs or it can be used to attract more revenue," Rogers says.

In addition, a presentation about a project need not go into all of the technical details, "but it is essentially a pitch, and the presenter needs to put the best foot forward," Rogers adds. And "it needs to be clear that the presenter understands all of the various aspects of the project," including technical proficiency and the impact the IT investment will have on the business. "Secondly, if you are doing a sell job, the users and the IT should be presenting the project jointly to the CFO and the CEO. I would like to know that the business units and the IT staff have worked on this planning jointly and have thought about the issues."

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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