July 8, 2011 – In a dismal trend for CIOs, bean counters are increasingly dominating technology decisions at companies, a Gartner study released this week has found.
The survey of 344 CFOs and other senior financial executives found that CFOs alone authorized 26 percent of all IT investments during the past year, while CIOs alone authorized only 5 percent of IT investments. Of course, this is the CFOs' version of the world. According to John Van Decker, the Gartner research vice president who conducted the study, CIO studies show more of a bias toward CIOs being in charge. However, year over year, CFOs demonstrate that they're controlling IT purse strings more each year. This year's survey, for example, found that 42 percent of IT organizations report directly to the CFO, and 33 percent of IT organizations report to the CEO.
“In some cases, this is the result of the economic shift, the need to manage IT as a cost center,” says Van Decker. “With limited funds available for investment and with companies being careful about where they do invest, CFOs are inserting themselves into the process to make sure each IT project provides value, especially if it involves an increase in head count.”
This is not necessarily a bad thing, Van Decker believes. “Ultimately technology is owned by every business area, it’s the role of the CIO to bring together and coordinate the projects,” he says. “It shouldn’t be the role of the CIO to ultimately make the decisions about which projects are going to be done.”
The survey results varied slightly with company size. In companies with less than $50 million in revenue, 47 percent of IT departments report to the CFO. Fifty-eight percent of companies with revenue of more than $50 million and less than $250 million have IT departments that report to the CFO, while 46 percent of companies with $1 billion or more in revenue have IT reporting to the CFO.
The survey also found that senior financial executives expect IT spending to recover conservatively in 2011, with 38 percent of respondents saying that they do not expect this growth to reach the level experienced before the recession in 2008. Forty percent see the level of growth consistent with 2010; just 6 percent expect the economy to rebound this year beyond 2008 levels.
When it comes to how CFOs are making IT investments, 72 percent said they will invest where they see a competitive advantage driven by IT. Business intelligence (BI) is the top technology initiative selected by 65 percent of senior financial executives, while 46 percent ranked enterprise business applications, such as enterprise resource planning (ERP) and integrated financial management solutions, as investment priorities. When viewed within the larger scope of operations' infrastructure, however, business applications (30 percent) were seen as more important than BI (23 percent) in 2011.
At 41 percent of organizations, CFOs believe IT is appropriately funded for 2011, and 31 percent said that IT has the technological capability to move the firm forward. However, only 30 percent said that IT truly fulfills its mission; 70 percent do not believe that IT is providing business benefits. Furthermore, only 32 percent of CFOs said they see the CIO as a strategic partner.
Only 47 percent of survey respondents viewed IT as being strategic, while 28 percent said IT fulfills what is asked of it. Thirty-five percent of organizations see IT as being a strategic driver of business performance; 8 percent view IT as a key contributor to the enterprise's competitive position; and 4 percent see it as transformational.
This story originally appeared on Bank Technology News.
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