The CFOs Increased Focus on IT Spending

Bill Gerneglia

CFOs today must continue their unrelenting focused on payback when making investments in IT. Their company’s profitability depends on this proactive scrutiny. The current global economy has set up the conditions that demand organizations strategically make investments that will benefit both top and bottom lines in increasingly compressed timeframes.  Additionally, competition within their industry requires continuous investment in technology that drives innovation and collaboration throughout the organization. Well informed CFOs are now more aware of this than ever before.

This trend was uncovered recently according to a research report from Gartner. The increased involvement by CFOs demonstrates that they increasingly understand and appreciate the value that collaborative information technology can bring to the organization. This understanding puts the CFO in alignment with the CIO to extend the IT department’s ability to create strategic value, according to Gartner analyst and report author John Van Decker. Forty-four percent of those CFOs surveyed said their influence over IT investment has increased over the past year, “and that is significant,” says Van Decker.

Cloud, big data, analytics, social media and other disruptive technologies continue to offer huge opportunities for CFOs and CIOs to help their organizations collaborate to work better, smarter and faster. CFOs at times struggle to understand the value proposition these technologies can bring to the organization. As a result they often turn to their CIOs to help them understand and make the right investment decisions.

This CFO-CIO relationship continues to evolve as an increasing number of CIOs today report directly to the CFO. CFOs often bring CIOs along to management meetings so they can better understand the organization’s strategy. Since the CFO often has a broader management role than the CIO, and by having a direct reporting relationship, the organization is often more better off with an enhanced and empowered IT function.

The report was produced by Gartner and the Financial Executives Research Foundation. It surveyed 255 financial executives between October 2011 and February 2012. During this period the perceptions about the U.S. economic recovery were favorable. The majority of respondents said they see technology as a way of driving revenue growth. According to the report in years past many finance executives said they took control of IT spending “because the ROI was not really managed well.”

According to the report, 41% of respondents said they are getting more involved in IT spending to “better align” IT with the business. Areas where they are investing include customer-facing technology such as social, cloud and mobile technologies, as well as in data analytics.

Well informed CIOs should welcome their CFO to take enhanced level of interest in where the organization makes their IT investments. Overall IT spending is rising, but many CIOs are seeing their own budgets decreased. This means that other stakeholders in the organization, such as CMOs are also making their share of IT investments.  Having a CFO who shares IT spending information can help CIOs with the difficult problem of knowing what systems are being implemented, and then consolidating the data those systems generate into large data warehouses (or to use the more contemporary term Big Data) and useful report dashboards.

The CFOs increased focus on IT spending permits the CIO to be seen as a strategic partner involved in strategic discussions within the organizations. This increased level of visibility facilitates collaboration between employees and customers especially around the collection and management of important operational data assets. 

 

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Bill has been a member of the technology and publishing industries for more than 25 years and brings extensive expertise to the roles of CEO, CIO, and Executive Editor. Most recently, Bill was COO and Co-Founder of CIOZone.com and the parent company PSN Inc. Previously, Bill held the position of CTO of both Wiseads New Media and About.com.

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