CFO vs. CIO: Bridging the gap in perspective

Listen
Text
  • Small
  • Medium
  • Large

Hospital and health system CFOs and CIOs are vying for investment dollars, and with competing agendas it's easy for the CFO-CIO relationship to become one full of conflict.

Hospital and health system CFOs and CIOs have many of the same goals in today's healthcare environment, such as improving systems to allow physicians to provide better care more efficiently. However, CFOs and CIOs are often pinned against each other as there is pressure on hospitals and health systems to invest in technology and simultaneously cut costs.

Traditionally, financial leaders of healthcare organizations were focused on the bottom line and were stereotyped as "bean counters," but the shifting healthcare environment requires a new type of CFO — one that is more strategic and involved in other parts of the business. Just as the CFO position is changing, CIOs are increasingly taking on a bigger role, with technology playing a vital part in the switch to value-based care.

For hospitals and health systems to succeed, the CFO and CIO must realize they have the same end goal. Bridging the gap in perspective takes effort from both sides, and without a mutual understanding, a CFO-CIO rivalry can hurt the organization.

Recognizing both the CFO and CIO are valuable members of the team

When compared to other industries, technology utilization is still in its early stages in healthcare. However, investing in the right technology can reduce spending across the organization, which is a goal hospital and health system CFOs are striving to achieve.

For a successful CFO-CIO relationship, there must be "consistent mutual respect and the unwavering understanding that one cannot be successful in their work toward the mission of the organization without the other," says Keith Fowlkes, who has been in technology leadership for nearly 25 years and authored the InformationWeek article titled "CIO+CFO Doesn't Equal Mars vs. Venus."

The dynamic between University of Utah Hospitals and Clinics CFO Gordon Crabtree and the Salt Lake City-based system CIO, Jim Turnbull, is an example of how mutual respect and understanding can lead to a successful partnership.

"IT infrastructure and systems are fundamental to maximizing financial success and minimizing financial risks, which in simple terms means that it makes no sense for the CFO and the CIO to be at odds," says Mr. Crabtree. "The potential conflicts between the CFO and CIO are many, but a CIO who makes it a point to accept and adjust to reasonable input from the CFO, and a CFO who can recognize the importance of the CIO's input and recommendations, gives us a complete formula for mutual success."

It is clear Mr. Crabtree lives by the words he speaks as Mr. Turnbull describes him as "the most supportive CFO" he's ever partnered with at an organization.

Solving a breakdown in communication

Even though hospital CFOs and CIOs are working more closely together than ever before, many times there is miscommunication between them because they simply aren't communicating with one another in the most effective way. For instance, CIOs often times have difficulty showing the return on investment or the value health IT investments bring to the organization. Solving this challenge takes "translation and transparency," according to Mr. Fowlkes.

"CIOs have to show that the return on technology investment will aid in the savings the CFO is looking for in operational efficiencies," he says. "The CIO must also consistently quantify and communicate how current technology failure could affect operational efficiencies."

Financial leaders lacking understanding of technology terms can also cause a breakdown in communication between the CFO and CIO. In fact, 28 percent of CFOs cited knowledge of technology as the area where they needed to improve their capabilities the most, according to a survey from consulting firm Accenture, technology giant Oracle and research firm Longitude Research. Industry knowledge was the only area the 930 CFOs surveyed cited as more of a priority than improving their technology know-how.

In addition, CIOs tend to take a "big picture" approach, while CFOs "prefer more granularity," according to CFO insight and analysis from Deloitte.

One effective approach for solving communication problems between the CFO and CIO is to develop "a simplified steering committee process that includes broader business executives (such as CMO, COO, etc.) and the CFO and CIO," says Susan Wiemeyer, managing director of healthcare provider and plans at Microsoft. "This allows senior business executives to voice their support for technology initiatives and provide a balanced set of input into the decision process."

Getting rid of competing agendas

Several years ago, hospitals were spending a significant amount of money on financial systems. However, with meaningful use and the need for improvements in clinical workflow and software many hospitals are foregoing investments in revenue cycle management.

"There are competing agendas with clinical investments and financial investments, and increasingly the clinical investments are winning out," says Eric Ward, who previously led HCA's Shared Services division and now serves as president and CEO of Parallon's Revenue Cycle Service business unit.

Even though clinical investments are a top priority, hospital and health system CFOs still see the opportunity in financial investments, and there is friction with that.

To help solve this issue, Mr. Ward suggests CIOs put together a business case for technology, which helps the CFO understand the investment and the value it offers. He also suggests closely monitoring and tracking any technology investments, which "takes away friction because it becomes about the data."

Realizing some conflict can be healthy

Although a successful CFO-CIO relationship takes effort, understanding and open minds from both parties, avoiding conflict all together may not be a possibility or something C-suite members should strive for.

According to a Forbes article written by Mike Myatt, a leadership advisor to Fortune 500 CEOs and boards, "Fearing conflict reflects that you're a people pleaser rather than a problem solver." By viewing conflict as an opportunity, CFOs and CIOs will develop a better understanding of their fellow C-suite members and learn more about what is best for their organization as a whole. As Mr. Myatt said, "Where there is disagreement there is an inherent potential for growth and development."

Copyright © 2022 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars