CFOs, CIOs Should Be Cloud Computing Allies

There is perhaps no more highly charged relationship in the C-suite than the one between the CIO and the CFO. I’ve shared the opinions of folks who think some CFOs would like to usurp the CIO role. Some companies choose CFOs rather than CIOs to lead their technology transformation efforts. Home Depot is a recent example.

Yet CIOs and CFOs can also enjoy a close working relationship in which they partner to use IT to help achieve business goals. That seems to be the case at Symantec, based on a Forbes interview in which CIO David Thompson and CFO James Beer said some pretty nice things about each other and their partnership.

One reason that CIOs and CFOs work together so closely, of course, at least in the U.S., is because technology plays a key role in ensuring an organization’s data satisfies Sarbanes-Oxley requirements. But there’s a new data issue in town, and it’s one that will likely move the CIO and CFO even closer together.

As Informatica CFO Earl Fry says in a CFO World interview republished on Computerworld UK, cloud computing will create some regulatory questions around where data is located that will create "long-term and profound implications for finance and IT."  He explains:

… IT may not care at first if a department signs up with a SaaS, but they will if that application becomes meaningful enough to the organization. Finance will also care because they need to ensure the security of the data and that there is a single version of the truth. You can’t just say, I’ll rely on what’s sitting on my in-house general ledger, when everyone else is making decisions off SaaS.

There’s also the consideration that when my senior vice president of finance pulls together his reports for the SEC, he’s not just pulling numbers from the general ledger. Instead, he needs information that comes out of other databases [that could be in the cloud] such as a breakdown of revenue, orders by products and sales to OEMs vs. end users.

This issue of "shadow IT" that occurs when business units buy cloud-based applications without IT’s knowledge is often presented as an "IT vs. everybody else" issue, but as Fry’s comments make clear, potentially negative repercussions can occur throughout an organization and create problems that potentially could get a CFO fired. For this reason, it makes sense for CFOs and CIOs to become cloud computing allies. CIOs should enlist CFOs to help spread the word that software-as-a-service will work better for everyone if IT is involved from the beginning. Of course, this will only work if IT is willing to at least consider all SaaS requests.

Rather than tightening requirements, Fry says Informatica "decided to embrace every single business user’s request for SaaS." The advantage: IT can easily see where integration points were required, either right away or in later stages of a SaaS project. It also fosters a closer relationship between IT and the business, Fry says, because users most likely would have to fess up and come to IT anyway when they needed dashboards, data integration or other capabilities SaaS vendors weren’t able to provide.

I assume SaaS discussions appear regularly on the agenda at quarterly governance meetings where Informatica executives and key business stakeholders debate potential projects and conduct post-mortems on recently completed ones, a process Fry mentions in his interview. Another quote that resonates: He says executives from both finance and IT "understand that each has to make trade-offs for the good of the business." As I wrote a few weeks ago, citing a blog post by the CIO of O’Reilly Media, compromise is at the heart of IT governance.