Terry Corbell, The Biz Coach
By Terry Corbell
Business Consultant

Why CFOs Call the Shots in IT Decisions



The top IT decision-maker for many companies is not the chief information officer. The chief financial officer is increasingly calling the shots for IT.

The CFO has become 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. True, CIOs should learn how to get more respect in the C-suite. But for the CFO to call all the shots in IT decisions is ill-advised, and I’ll explain later.

ID-100123176 imagerymajesticThe 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:

4 Keys So Marketing and IT Can Create Business Revenue — Businesses will generate more revenue if their information technology and marketing professionals strategize more effectively. For instance, success in e-commerce is increasingly challenging for companies that want to dominate in brand preference, customer loyalty and word-of-mouth advertising. A study shows Internet shoppers are more demanding in the three Cs — channels, choices and convenience.

4 Recommendations to Avoid Spending Too Much on IT — To take advantage of big cost savings in information technology, a study says businesses need to change their buying habits. Here’s how.   Despite an unprecedented trend to control information-technology costs, the majority of companies fail to achieve maximum savings, according to a multi-nation Forrester Consulting study.

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. Here’s why.

Tech Planning: What If There’s Another Downturn? — Technology-research firm Gartner recommends in a study that chief information officers should get ready for another downturn. That requires planning.

Executives Target 5 Technology Threats to Company Value — Corporate executives see new strategic risks as a result of technological changes — from big data and cloud computing to social media  — according to a 2013 global Deloitte survey. Deloitte queried more than 300 executives, risk managers and board members — 81 percent said their strategic-management focus has evolved with technology.

Men are respectable only as they respect.”

-Ralph Waldo Emerson


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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.





Photo courtesy of imagerymajestic at www.freedigitalphotos.net


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Seattle business consultant Terry Corbell provides high-performance management services and strategies.