At more and more companies, the CFO has direct control over IT. But unfortunately, recent research shows most CFOs have a low opinion of the IT groups working under them.
That’s the message from a recent study conducted jointly by Financial Executives International, the Financial Executives Research Foundation and tech research firm Gartner.
At the 344 organizations that were studied, 42% of IT departments report directly to the CFO. That number is expected to rise in the future.
At 26% of the organizations, the CFO has complete authority to approve IT investments — that’s up from 18% in 2010. Just 5% of CIOs have that kind of power. For many other companies, investments are authorized by a joint committee made up of IT and Finance people.
Put simply, at more and more companies, the CFO is in charge when it comes to IT. The problem: Most CFOs don’t think IT is helping the business succeed.
Only 30% of them said they believe their IT department is truly fulfilling its mission in providing business benefits. And just 32% of CFOs said they view the CIO as a strategic partner.
Some other troubling results:
- Just 35% of CFOs see IT as being a strategic driver of business performance
- 28% said IT fulfills what’s asked of it, and
- 8% view IT as a key contributor to the organization’s competitive position.
So how can IT managers better fulfill the CFO’s expectations? When asked what they look for in IT projects, the top three answers from CFOs were:
- Ownership of the project and its impact on the business — i.e., IT takes responsibility for the project and understands how it fits into the organization’s greater plans
- Business case — the project will give the organization a competitive edge, and
- Project management — the investment is planned properly and carried out efficiently.
In other words, CFOs need to see that IT projects will help the business and that the benefits will outweigh the costs of the implementation.
The projects many IT departments are focusing on now (virtualization, cloud computing, etc.) most likely meet those criteria — but as this study shows, IT may not be properly communicating the benefits of those initiatives.
When talking about potential projects with the CFO — and anyone else involved with approving funding — it’s important to emphasize the competitive advantage they’ll give the company.
Gartner recommends IT managers reach out to CFOs and be as clear as possible when explaining the benefits of proposals. The important thing is for IT to be proactive in building the relationship — if the CFO doesn’t view IT as a strategic partner, it’s up to IT to change that perspective.
For more tips on gaining your CFO’s buy-in, read our whitepaper on 7 Statements Your CFO or CEO Needs to Hear to Increase IT Spending.