And power of the CFO over the IT department also growing
National Harbor, Md. — Increasingly, it’s the chief financial officer (CFO) who has direct oversight of the IT department and IT-related spending, but it turns out the CFO has a low opinion of the CIO and the entire IT group.
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That’s according to a survey of 344 CFOs at North American companies involved in manufacturing, financial services, healthcare, energy, transportation and other fields. The survey, conducted by the professional organization Financial Executives International in tandem with Gartner, sought to find out what CFOs think about use of information technology in their companies and the people who provide it. They weren’t that happy.
According to the 2011 Gartner/FEI study, only about a quarter of the CFOs had confidence that their own IT organization “has the organizational and technical flexibility to respond to changing business priorities,” or “is able to deliver against the enterprise/business unit strategy.”
“Only 25% see the CIO as a key player in determining the business strategy,” said Gartner analyst John Van Decker.
In addition, less than a quarter of the CFOs felt the IT department “delivers the technology innovation needed by the business,” or that it “has the right mix of skilled people to meet business needs.” And in the final act of disdain, only 18% of the CFOs said they thought “our IT service levels meet or exceed business expectations.”
Van Decker said the results of the survey show that “CIOs sometimes care too much about technologies” rather than the business environment itself that is top of mind to the CFO. The survey showed that CFOs, when they are considering IT decisions, are inclined to invest in technologies where competitive advantage can be demonstrated, analysis and decision-making is assisted, or efficiencies and cost reduction are achieved.
If the typical CFO, whose job often entails keeping a close watch on spending, approving investments and assuring compliance with regulations, is really so disenchanted with the IT department, that could spell bad news for corporate IT. That’s because the Gartner/FEI survey shows the rising influence of the CFO over the IT department. The survey showed 42% of IT organizations now report directly to CFOs, “and that is expected to increase,” Van Decker says.
In terms of who authorizes IT investments, 29% of the respondents said it’s a steering committee of IT and business executives. But 26% said it’s the CFO alone authorizing IT investment, up from 18% last year. A quarter says it’s the CIO and CFO together. In 11% of organizations, it’s still the CIO alone.
The study’s findings point to the need for the CIO and others in the IT department to reach out to the CFO and be as clear as possible about why some kinds of IT investments are being advocated by the IT department, Van Decker says. He noted the survey shows only 35% of the CFOs viewed IT as being a strategic driver of business performance.
“Perhaps CFOs don’t understand the longer-term importance of deploying new technologies, such as virtualization,” Van Decker says. CFOs are strongly focused in on business enablement, particularly of ERP systems, where the current mood favors consolidation of systems. But acceptance of software-as-a-service is also gaining favor in the eyes of the CFO, with 10% now accepting SaaS (up from 6% in 2010), though 76% still prefer licensed software.
