Giving the CFO What He or She Wants

DFN: Interesting perspective from an IT person about what to give the CFO when you’re asking for funding for a project. Though IT specific, I think Ann’s observations pertain to any product, services or project that a company is working on with the CFO to secure funding.

Giving the CFO What He or She Wants

Posted by Ann All Oct 5, 2009 1:23:36 PM

It’s a given that CFOs like numbers. So why don’t more IT managers include plenty of good, hard numbers in their presentations to the CFO? That was the premise of a post I wrote earlier this year, which also offered some good advice on how to cultivate a better working relationship with CFOs.

A lot of the advice came down to communication. CFOs don’t like surprises, so don’t conceal issues such as budget overruns. Consider taking a finance course so you can really understand financial

statements and produce a coherent cost-benefit analysis.

I recently found a great post along the same lines on CustomerProfit. Though it’s written for chief marketing officers trying to get the green light (and cash) for a new initiative, I think the tips will

work equally as well for IT managers. They were derived from interviews with two CFOs, Nancy Fulton of Rainbow Rewards and Perry Liff of Talbots, Inc. The biggest takeaway for winning the CFO’s backing is to offer a solid business case.

Of course, this is easier said than done. Especially when, as IT Business Edge’s Mike Vizard wrote earlier this month, many IT organizations simply don’t have the appropriate financial analysis

tools in place to present an effective case. He said:

… internal IT organizations are not only competing against external service providers, they also need to compete against other groups in the business to hold on to their piece of a shrinking budget.

Unfortunately for the internal IT departments, those other business units — not to mention that external service providers – are all well

armed with financial analysis tools. In contrast, the internal IT department all too often keeps bringing a knife to budget gunfights where the opposition is heavily armed with automatic weapons.

Some of the best tips from the CustomerProfit piece:

•Present multiple scenarios (conservative, break-even/moderate and liberal), so the CFO can see how far assumptions would have to miss the mark to put a project in negative financial territory.

•Clearly illustrate both the short- and long-term value of a project. (Realize that CFOs are looking for short-term value in the current economy, I’d add.)

•Ask the finance department for help with your ROI models, and show an understanding of the importance of these models.

•Share risk assessments, including risks that will occur if project is not approved and those that will occur if a project is approved but doesn’t meet expectations.

•Be sure to measure results. A department with a history of positive results will get more budget love.


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