Tech Trends: CFO’s the Boss, IT Departments Are Disappearing

 

Two developments are clearly underway in information technology. Increasingly, the chief financial officer is in charge and IT departments are shrinking in size.

First, regarding the shrinking size of IT departments, a Corporate Executive Board study indicates they’re diminishing in size, according to writer Joe McKendrick  at SmartPlanet.com.  It’s not a cutback in jobs, just a shift in how IT professionals are put to work. He writes companies are either are tapping IT service providers or clouds.

The study indicates IT department will be 75 percent smaller by 2015, and 80 percent of IT budgets will be spent on IT vendors’ services.

What’s driving this phenomenon? Probably best-practices in consolidation as CFOs assume more authority.

A study by Gartner and Financial Executives Research Foundation (FERF) was based on the perspectives of senior finance managers. It’s entitled, “2010 Gartner FEI Technology Study: The CFO as Technology Influencer.”

Findings include:

• Forty-two percent of IT departments report to CFOs
• Thirty-three percent are supervised by the chief executive officer
• Sixteen percent report to the chief operating officer
• Two percent are overseen by the chief administrative officer
• Seven percent to other executives

Most importantly, the CFO has a major say in 75 percent of IT departments and a minor input in 20 percent. In 5 percent, the CFO has no influence.

Part of the problem: Two studies indicate a need for IT pros to get businesslike.

“In most organizations, the CFO and CIO work together daily to finance IT and provide information that supports financial processes, but there is also an opportunity for them to form a powerful alliance that generates more value for the enterprise,” said Bill Sinnett, FERF’s director of research, in a statement.

“The CFO and CIO are well-positioned to work together at generating superior performance from the enterprise,” he added.

The  study makes it clear IT department personnel, especially the CIO, should understand an organization’s big picture and how they can best contribute to the  firm’s welfare via the CFO.

My Biz Coach conclusion from the two developments:  IT success hinges on acculturation with the finance mindset as well as a higher degree of integration with the rest of the organization. It’s different but it’s the wave of the future.

From the Coach’s Corner, more resource links:

• Nervous About Your New Boss? Here’s How to Deal with It
• The 22 Do’s and Don’ts for Successful Negotiations
• 9 Dos and Don’ts for Best Decision-making

“I wasn’t a financial pro, and I paid the price.”

-Ruth Handler

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.