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.