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CFOs Lack Faith in CIOs

Ellen Messmer | July 19, 2011
CFOs increasingly call the shots on IT decisions but they aren’t very happy with IT teams, survey shows.

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.

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 organisation Financial Executives International in tandem with market research firm 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 organisation “has the organisational and technical flexibility to respond to changing business priorities,” or “is able to deliver against the enterprise/business unit strategy.”

“Only 25 percent 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 percent 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 is because the Gartner/FEI survey shows the rising influence of the CFO over the IT department. The survey showed 42 percent of IT organisations now report directly to CFOs, “and that is expected to increase,” Van Decker said.

In terms of who authorises IT investments, 29 percent of the respondents said it’s a steering committee of IT and business executives. But 26 percent said it’s the CFO alone authorising IT investment, up from 18 per cent last year. A quarter says it’s the CIO and CFO together. In 11 percent of organisations, it’s still the CIO alone.

 

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