- As digital strategies have accelerated in the wake of COVID, the relationship between the CFO and technology executives has shifted from a transactional exchange to one requiring deeper collaboration and understanding.
As digital strategies have accelerated in the wake of COVID, the relationship between the CFO and technology executives has shifted from a transactional exchange to one requiring deeper collaboration and understanding.
Two key trends—empowered product teams operating autonomously and rising cloud maturity—have altered the landscape of how finance and technology departments work together. This new environment creates both opportunities and challenges as CFOs seek greater financial oversight and CIOs/CTOs push for speed and innovation. Based on our work with Fortune 500 technology executives, we have identified five key areas of friction that characterize this evolving relationship and ways to mitigate the inevitable moments of tension. In future articles, we’ll explore each area in greater detail to show how finance and technology leaders can further enhance their collaboration.
As organizations embrace a product-oriented operating model, technology teams are more empowered than ever. These independent product teams, armed with the resources and freedom to experiment, often operate outside the traditional approval frameworks that once governed tech spending (For more on product funding models, see Metis Strategy Partner Mike Bertha’s article on CIO.com). From a finance perspective, this can feel like handing out a blank check. CFOs worry about losing control over budgets, particularly when spending scales unpredictably. CIOs/CTOs, on the other hand, argue that agile teams need the financial flexibility to drive innovation and respond to market shifts in real time.
Bridging this gap requires balancing innovation with responsible cost management, transforming finance teams alongside product development, and improving how teams measure business value delivered (not just productivity metrics!). In short, product teams build trust by demonstrating continuous tangible business value. One CFO we worked with began by funding one or two empowered product teams. As trust grew and results emerged, the finance team became comfortable expanding the product funding model to the rest of the organization while the product teams spent less time on admin and more time on building products.
As cloud services mature, organizations increasingly rely on serverless infrastructure, microservices, and other cloud-native technologies. While these offer significant flexibility, they often lead to unpredictable operational costs (OpEx) as a percentage of total technology spend. The “pay-as-you-go” model works well for scalability, but it’s easy for teams to inadvertently build “chatty” applications—ones that generate high levels of inter-service communication and drive up usage costs as a result. This surge in OpEx often leaves little room in tech budgets for strategic initiatives. CIOs/CTOs now must focus not only on performance but also on optimizing cloud spend while CFOs demand greater transparency and predictability around operating costs. This challenge is exacerbated as AI demand reshapes the infrastructure landscape. Fortunately, FinOps strategies and capabilities offer a practical path to tackle these growing concerns. FinOps is a collaborative practice that leverages real-time visibility into cloud consumption and cost drivers, employs rightsizing and resource tagging strategies, and encourages aligned financial planning with engineering and operational teams to effectively manage cloud spending.
As organizations achieve greater data maturity, both finance and technology teams have better means to make informed capital allocation decisions. However, the challenge lies in effectively using this data to drive decision-making. CFOs now expect technology leaders to provide real-time insights into technology ROI, cloud spend, and operational efficiency. Conversely, CIOs/CTOs want finance to move beyond historical spending patterns and focus on forward-looking investments and innovation. While the data is there, friction arises in how to interpret and act on it. This can lead to disagreements around which metrics matter most and how capital should be allocated across the technology portfolio.
For organizations transitioning to a product operating model, it’s critical to avoid building entire product teams for products that do not or will not generate substantial ROI. CFOs and CIOs/CTOs can find common ground by clarifying which capabilities—not just technologies—each investment supports and ensuring the annual budget process goes beyond a simple “+X%” increase over last year. Technologists, in turn, should prioritize providing financial data visibility for new products and capabilities, enabling clear communication of ROI, and sharing insights into long-term operating costs from the start.
As organizations rush to adopt new technologies, a key question arises: when should investment levels stabilize? According to the 2024 State of Enterprise Tech report by Insight Partners, only 41% of cybersecurity executives expect increased budgets, down from 51% in 2023. This is a significant shift and suggests that after years of continuous spending to combat evolving threats, companies now face diminishing returns on further investment. While cybersecurity remains critical, over-investment without strategic need or commensurate ROI can lead to inefficiencies. Understanding when a technology has matured—and investment should plateau—requires close collaboration between CFOs and CIOs/CTOs to balance risk management with financial discipline. CFOs and technology leaders can start by jointly assessing current spending’s marginal value and identifying benchmarks for shifting to sustained operations.
As new AI capabilities evolve, measuring their value will remain an ongoing challenge. At our recent Metis Strategy Summit in October, Mastercard’s Ed McLaughlin noted that we do not yet fully know how to quantify AI’s impact and potential benefit, leading to headlines that suggest potential over-investment in the area. This uncertainty underscores the need for a governance model that balances technology teams’ need to innovate and explore, even when ROI is uncertain, with the guardrails that ensure financial accountability.
By establishing a framework for decentralized decision-making within product teams, combined with periodic (quarterly) financial and strategic reviews, CFOs and CIOs/CTOs can support innovation initiatives without compromising fiscal discipline. Matrixing finance partners to the appropriate level of product team structure enables responsible experimentation, helping to prevent reckless spending on high-risk technologies while advancing the organization’s long-term strategic goals.
In 2024, the CFO and CIO/CTO relationship was defined by both shared goals and inherent friction. As empowered product teams drive innovation and cloud costs rise, the need for a balanced, collaborative approach becomes increasingly critical. Updating the governance model, making data-driven decisions, and aligning on spend for emerging technology will be essential to maintaining strong relationships between finance and technology. Successfully navigating the sources of tension above will allow both sides to foster innovation and increase speed to market while ensuring responsible financial stewardship.
