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CFOs starting to see the business benefits of IT: Gartner

Hamish Barwick | Nov. 26, 2012
The view of IT as ‘just another expense’ that seems to be widely held among chief financial officers is changing, according to Gartner. The research firm found that CFOs are now starting to understand that IT can help the wider business and are investing in technology.

The view of IT as 'just another expense' that seems to be widely held among chief financial officers is changing, according to Gartner. The research firm found that CFOs are now starting to understand that IT can help the wider business and are investing in technology.

Speaking at the analyst firm's recent Symposium/ITxpo on the Gold Coast, Gartner US senior vice president Tina Nunno cited a recent Gartner survey called CFOs' Demand For IT, which found that a majority of the 255 US-based CFOs surveyed indicated they were focused on business analytics and applications.

CFOs were asked what areas of technology they would like to apply more money in.

"The CFO's first priority was in information and financial analysis," she said. "This would help them run the business to make more dynamic decisions about sales and effectiveness in the organisation."

The second priority was information management and knowledge sharing, while cost management was closer to the bottom of priorities.

According to Nunno, the low priority assigned to cost management was a "positive shift" in attitude as it meant CFOs were starting to understand that IT could be used for business advantage.

However, she added that CIOs and IT executives still need to make CFOs understand the total cost of IT.

"For the average enterprise, the percentage of spend which is IT is 1 to 4 per cent of overall operating expenditure [OPEX]."

"When many CIOs communicate IT value [to the CFO], they will say that they saved 2 per cent on the IT budget rather than sharing what they helped save on the other 98 per cent of the company's total budget," she said.

Communication with the CFO

According to Nunno, CIOs needed to communicate how IT helps productivity and growth, rather than talking about solutions such as cloud computing.

"The more CIOs can communicate growth, the more CFOs will view IT as a potential investment rather than a cost to be managed."

However, despite the changing perceptions of CFOs, the survey also found that only 5 per cent of those surveyed viewed IT as providing competitive advantage.

"This is a rather unfortunate perspective that many CFOs have so one of the things we encourage CIOs to do is work with the CFO and come to a shared understanding of how the company views competitive advantage," Nunno said.

"For example, if you are the Wal Mart or low cost provider of your industry, often times you want to invest in things which make the company less expensive such as supply chain."

CFOs involvement with IT

According to the survey results, 45 per cent of CIOs and IT executives report to the CFO more than any other executive, an increase of 3 per cent on the 2011 survey results.

 

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