This article originally appeared in the July 2011 issue of infoTECH Spotlight.
The chief financial officer is increasingly becoming a top technology investment decision maker, if not the highest, in many organizations.
That’s according to a joint study between Financial Executives International (FEI) and Gartner (News - Alert), which found only about a quarter of the CFOs had confidence that their own IT organization “has the organizational and technical flexibility to respond to changing business priorities.”
Improving and developing the relationship between IT and the CFO has always been in the periphery of the C-suite, but today it is even more relevant considering the overlap between the two executive posts.
The 2011 Gartner FEI Technology Study also found that in 45 percent of organizations, the CFO leads the technology investment strategy, by being the sole decision maker (7 percent), or leading a team that makes technology/IT decisions (38 percent).
Another key finding: the CFO has potentially more clout in IT investment decisions than the chief information officer. The report found that the CFO alone authorizes 26 percent of all IT investments, and 51 percent when combined with the CIO.
In this issue of InfoTech Spotlight, we delve into three areas of IT that each effect investment decisions for enterprises and IT organizations alike, and as such, must be considered by both the CIO and CFO. Trends in data centers, network optimization and outsourcing all have a common denominator: cost savings.
As cloud computing continues to become adopted more readily, cost optimization is coming into greater focus for the CFO. Turn to this issue’s cover story (“How Dirty is Your Data?” page XX), and you’ll read why “greening” the data center means much more than improving your corporate reputation or doing good for the environment. For senior-level executives and IT leaders, it’s all about adding green to the bottom line.
And, just when you thought cloud couldn’t get more disruptive, take a look at management challenges this technology is posing to companies outsourcing IT. One of the biggest challenges that organizations face is mismatching outsourcer goals with provider capabilities. With cloud computing poised to dominate the IT outsourcing market this year (see “Cloud-Sourcing: The Next Generation of Outsourcing,” page XX), it is clear cloud-sourcing needs understanding by both the CIO and CFO.
CIOs today are not only responsible for the infrastructure of the organization and CAPEX, but also for the OPEX (News - Alert) associated with maintaining and scaling the exploding number of applications that must be supported for various internal business processes (see “Embracing Network Optimization,” page XX). CIOs are under pressure to maximize the value of existing resources and contain costs, even as the lack of application visibility has led to unpredictable and failed projects, and cost overruns, making network optimization that much more essential.
Given Gartner’s findings that the CFO influence on IT is increasing, working together, the CIO and CFO must understand how to leverage enterprise technology. According to the 2011 Gartner/FEI study, “the CFO-CIO relationship has the potential to be a powerful contributor to business success, yet it often doesn't reach this desired state.”
CIOs are being charged with improving the performance of cloud computing solutions, their data centers and network optimization, making the alignment of business and IT that much more relevant and critical. The CIO-CFO relationship is surely one that can use some nurturing to help their respective organizations find greater efficiencies – and maintain competitive advantage.