The quintessential tug-of-war!

30 June 2010 05:10 am , Rahul Neel Mani

There seems to no end to the tug-of-war between the CIO and the CFO for control over IT investments. Ironic, since at this moment, what is driving companies is business performance which demands a closer relationship between CIOs and CFOs. Historically, CFOs have believed that they know the pulse of the business better and are therefore keen to keep a close watch on it... and so the tussle continues.
A recent Gartner-Financial Executives Research Foundation (FERF) survey throws more light on this. The survey shows the CFO is increasingly becoming the top IT investment decision maker in many organisations. According to the survey, more IT organisations report to the CFO (42 percent) than the CEO or any other executive. (In our view, however, in the context of Indian businesses, more CIOs report to the CEO than they did two years ago.)
The survey also reveals that in 75 percent of the firms, CFOs play a vital role in determining IT investments. What does this suggest for the future? Will the role of the CIO reduce in the organization especially if technology is seen as just a cost centre? Each time the focus shifts to cutting costs, there is the risk of the CFO having a greater influence on technology strategy than the CIO. But most of this is simply conjecture — and thankfully so!
The majority view is that there is merit in striking a balance of power. You need a savvy CIO who understands technology and business, and a CFO who understands the merit of technology for business, and they need to work together. If the current economic climate forces the CIO and CFO to work together, it will certainly pave the way for a win-win relationship – forthem and for their organisation.
And in such a scenario questions like who should a CIO report to or who should decide on IT investments will become irrelevant. In fact, reporting to the CFO could prove very useful if the CFO has a deep understanding of IT's value.
This issue of CTO Forum highlights the opportunities where CIOs and CFOs can work together to address common business goals. The story is substantiated with cases where CIOs and CFOs have joined hands to build greater business agility through technology.
As always, I will appreciate your views and comments on the story.

There seems to no end to the tug-of-war between the CIO and the CFO for control over IT investments. Ironic, since at this moment, what is driving companies is business performance which demands a closer relationship between CIOs and CFOs. Historically, CFOs have believed that they know the pulse of the business better and are therefore keen to keep a close watch on it... and so the tussle continues.

A recent Gartner-Financial Executives Research Foundation (FERF) survey throws more light on this. The survey shows the CFO is increasingly becoming the top IT investment decision maker in many organisations. According to the survey, more IT organisations report to the CFO (42 percent) than the CEO or any other executive. (In our view, however, in the context of Indian businesses, more CIOs report to the CEO than they did two years ago.)

The survey also reveals that in 75 percent of the firms, CFOs play a vital role in determining IT investments. What does this suggest for the future? Will the role of the CIO reduce in the organization especially if technology is seen as just a cost centre? Each time the focus shifts to cutting costs, there is the risk of the CFO having a greater influence on technology strategy than the CIO. But most of this is simply conjecture — and thankfully so!

The majority view is that there is merit in striking a balance of power. You need a savvy CIO who understands technology and business, and a CFO who understands the merit of technology for business, and they need to work together. If the current economic climate forces the CIO and CFO to work together, it will certainly pave the way for a win-win relationship – forthem and for their organisation.

And in such a scenario questions like who should a CIO report to or who should decide on IT investments will become irrelevant. In fact, reporting to the CFO could prove very useful if the CFO has a deep understanding of IT's value.

This issue of CTO Forum highlights the opportunities where CIOs and CFOs can work together to address common business goals. The story is substantiated with cases where CIOs and CFOs have joined hands to build greater business agility through technology.

As always, I will appreciate your views and comments on the story.

 

 

rahul.mani@9dot9.in

 


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