Photo: Oakland County, Mich., CIO Phil Bertolini and CFO Laurie Van Pelt

The concept of "shareholder value" has been influential in the private sector since it was introduced in the 1980s. This philosophy directs businesses to maximize earnings and growth, which should then be reflected in stock price. Further, it implies critical behaviors such as evaluating all strategic decisions based on their potential to create value and only carrying assets that positively influence value, according to Ann Senn and Kenneth Porrello in Decoding the CIO-CFO Relationship. The private sector has recognized that close cooperation between the CIO and chief financial officer (CFO) is essential to helping IT projects and assets maximize shareholder value.

A similar dynamic is occurring in government organizations focused on creating "public value." Public value is the combination of cost-effective program delivery and achieving outcomes of value to constituents.

Technology is a key lever for creating public value. Just to cite a few examples, it can help control costs through automation, provide consistency in service through process management and through business intelligence, it can better identify citizen demands as and whether those demands are satisfied. CIOs and CFOs in leading public-sector organizations are working together to use technology to create public value.

A Relationship That Maximizes Value
It's impossible to maximize public value for the tax dollar without close cooperation between the CIO and CFO. As Phil Bertolini, CIO and deputy county executive of Oakland County, Mich., said, "No CIO can be truly successful without a close partnership with the CFO. Our CFO finds the resources the county needs to make the best use of technology and helps me keep the discussion about technology squarely centered around the value it produces, not just cost."

Identifying Sources of Value and Funding
Simply put, the CIO identifies technologies with potential for creating value and the CFO finds a way to fund them. In most public organizations, the citizens place comparatively little value on IT investments when weighed against more visible assets like parks or facilities. This means the CFO's support is vital to a regular IT funding mechanism. For example, in Las Vegas, the CIO and CFO created an internal service fund and chargeback system that supplies a dedicated source of funding for IT. This has allowed IT to provide a consistent level of service, as well as make improvements to the city's capabilities while avoiding over-politicization of the allocation process.

This isn't to say that Las Vegas pursues an opaque funding strategy - in fact, it's quite the contrary. In Las Vegas and other governments, IT governance makes IT decisions more transparent and brings the CIO, CFO and operating departments together in a forum where they can make joint decisions on allocating IT resources.

The CFO's involvement in IT governance emphasizes the need for a positive return on investment (ROI) from projects. Though this certainly helps derive greater benefit from projects in an individual department, it has much greater implications for overcoming "stovepiped" departments - a problem endemic to government.

Because participants in the governance process know that funds won't be allocated absent a positive ROI, they are more mindful of potential synergies between departmental projects and other opportunities to reuse technologies when proposing projects to diffuse costs and multiply benefits, thereby improving the ROI.

For example, in Nevada County, Calif., the Public Health Department received a homeland security bioterrorism grant to implement an interactive voice response (IVR) system to rapidly contact first responders in an emergency. In some governments, this grant may have simply led to the system being implemented within the department. However, in Nevada County, the grant was used as a springboard to create much greater