Only 5% of CIOs Can Authorize IT Investments Alone

Thursday, 07 July 2011 20:26 Ayman Abouseif
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According to a recent Gartner press release, CFO influence in IT is growing as CFOs alone have authorized 26 percent of all IT investments, while CIOs alone have authorized only 5 percent of IT investments, according to a recent joint study by Gartner, Financial Executives Research Foundation (FERF) and the Committee of Finance & IT (CFIT) of Financial Executives International (FEI). The survey also showed that 42 percent of IT organizations report directly to the CFO, and 33 percent of IT organizations are reporting to the CEO. "This high level of reporting to the CFO, as well as their influence in technology investments, demonstrates the need for companies to ensure that their CFO is educated on technology, and underscores just how critical it is that the CIO and CFO have a common understanding on how to leverage enterprise technology," said John Van Decker, research vice president at Gartner. 

When it comes to how CFOs are making IT investments, and which guidelines they used to guide investments, 72 percent of firms said that they will invest where they see a competitive advantage driven by IT. Business intelligence (BI) is the top technology initiative from the perspective of the senior financial executive. For a combined 65 percent of choices, BI ranked as the technology with the highest demand, while 46 percent ranked enterprise business applications, such as enterprise resource planning (ERP) and integrated financial management solutions, as investment priorities.

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.

We all know that the power of a CFO is defined by the extent of their oversight over investments and budgets. The power of the CFO is also derived from legal and fiduciary accountability. The reason the CFO is politically powerful is because they are surrounded by more enforceable codes of conduct than anybody else in an organization but of equal importance is the global economic slowdown which has re enforced the power of the CFO over and above all his/her peers in the organization. It is also notable that to some extent companies that adopt more of a European culture usually allows their CFO more powers than their American counterparts.

But it is still disappointing that after years of struggle CIOs still have less power than they deserve and so many of them still report into CFOs. What are CIOs doing wrong, why aren’t CIO getting the recognition, credit and the power they deserve despite their hard work, is it exciting technology that drives their decisions or does the high ratio of IT projects that fail to deliver the promissed results?

CIOs must analyze and reflect, discuss and debate these issues amongst themselves and find a way forward to restore their stature in organizations large and small around the Middle East.

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Last Updated on Thursday, 07 July 2011 20:54


0 #6 Wagdi Shafique 2011-08-27 06:41
The ever increasing expectations and demands by users in any organization make it impoissible for the CIO to really get ahead of the curve, everything you do just allows you to keep up with the increasing expectations, so you are never seen as making a big difference with any one project.

It is like roadworks, more cars, more drivers everyday, building a flyover or a new road just barely accomodates the increase in the no of cars, so no one can see how the new flyover has improved the traffic. And while you build the fly over everyone suffers just like the time you are rolling out a new CRM, everyone feels the pain, thinks the project is slow.

It is a thankless job!
0 #5 Atef Nimr 2011-08-24 14:47
After all one should have an agreed upon strategy and a set of projects approved for every year .. if a project does not get the final approval at the execution time, each member of the management team should not what that means, projects were approved based on some sort of justification .. if the project is dropped people should deeal with the business implications.
0 #4 Noor Ibrahim 2011-08-13 10:47
It does not look to me that this is a fight or a battle we CIOs can win today given the economic conditions. We should focus on two things, showing the organization the value of our work and getting to sit at the top table. If we do those, then it will be easier to gain financial control once the economic conditions get better.
0 #3 H Al Ajmi 2011-08-05 13:08
Just like marketing, IT seems to be one of the big spenders in most organizations with anywhere bwterrn 1 to 5% of the overall revenue.

And just like marketing heads, IT heads are always under pressure to prove that what they are doing has positive returns.

I ask what is the return on my email infrastructure .. no one can answer me, I ask what is the damage when the email service is down .. a lot but no one can easily calculate it. Does an IT manager or a CIO get any credite for keeoing the email service alive 24 x 7? No they don't. Do you get a lot of flack if your email service is down? Yes you do.

Bottom line, it is the nature of the beast, IT heads will never get credit for going a good job but will get lots of blame if anything goes wrong.

Don't like it? Become a CFO!
0 #2 Samy Mahfouz 2011-07-29 15:59
We are paying the price for refusing to become business people .. as a community, we as CIOs continue to talk in technical terms .. we really need to become business people, be ready to take over as CFOs or COOs understand their business and talk their language .. no more and no less
0 #1 Jack Lynch 2011-07-24 10:37
This is totally unfair and CIOs must work to regain their status not only as business leaders and value integrators but also as agents of change.

It is true that in tough times CFOs gain more powers but hey we are in a steady state economy, yes a slow economy but this is how it is going to be for the next few years.

Let us rise up and fight for our stature!

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