Study – CFOs Still Calling the Shots in IT Decisions

The top IT decision-maker for many companies is not the chief information officer. Instead, the chief financial officer is, according to a Gartner study.

The chief financial officer is becoming the top technology decision maker in around half of businesses, according to Gartner research released in June, 2011, which is entitled: “Financial Executives International (FEI) Technology Study.”

In fact, more IT departments are overseen by the CFO, not the chief executive or other senior managers. But this is ill-advised, and I’ll explain later.

The study’s conclusions:

• 42 percent report to the CFO
• 45 percent IT investment strategies made by the CFO
• In 38 percent, the IT department is managed by the CFO
• In 7 percent, the CFO is the lone decision-maker

“Understand that the CFO views the impact on business process and business enablement as the top technology issues,” said Gartner analyst John Van Decker.

“Therefore, applications and analytics are the top investment priorities, and the enabling technologies that support these initiatives need to be viewed as equally important,” he added.

The study also indicated that analytics and applications are the No. 1 investment priorities by the CFO.

While this trend probably makes financial executives happy, it doesn’t make for best practices.

It raises at least three questions:

• Do such CFOs have the necessary tech knowledge to understand the value of each decision? Sufficient steps have to be taken to ensure due diligence in IT security and other decisions.
• When will CEOs reconsider such strategies because of the negative impacts on the teamwork and morale of IT departments? An IT thought leader will resent such intrusions on the chain of command in organization structure.
• What will CIOs do about it? CIOs must take the proverbial bull by the horns to exert more leadership.

My bottom-line: Agreed, the CIO should adhere to all financial checks and balances. But there should be balance. As with human resources management and marketing whom the chief people often aren’t sufficiently respected, in essence, the top IT decision-maker should be the chief information officer with input from the CFO and other managers.

From the Coach’s Corner, here’s related reading:

How CIOs Can Get More Respect in the C-Suite

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

Tech Planning: What If There’s A Double Dip?

“Men are respectable only as they respect.”

-Ralph Waldo Emerson

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Terry Corbell is a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complementary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?