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Is the CFO the new CIO? Bridging the Physical-Financial Gap

Much has been made of the study jointly released this month by Gartner and the Financial Executives Research Foundation (FERF) that reaches the conclusion that CFOs are increasingly exerting influence over technology investments. (See, for example, “CFOs ‘Large and In Charge,’” from former Gartner Managing VP, Tom Pisello.) According to the report, 44% of surveyed CFOs indicated that they had increased their control over IT decision making whereas only 9% indicated that their level of control had declined.

The prospect that CFOs may be becoming the leading IT decision maker for enterprise investments understandably has CIOs worrying about their place at the boardroom table, but in our view, that is taking the wrong view of the study’s results.  We are, after all, still in the midst of the worst financial crisis in most of our lifetimes. And when times are tight, all investment garners increased scrutiny.  The corporate officer responsible for this scrutiny, wherever it is made, is the CFO.  When framed in this way, it begs the question, “wouldn’t we be surprised if the Gartner study found otherwise?”

Further, as is pointed out in this video from the CIO Network on Forbes.com, CFOs and CIOs naturally tend to think in different ways.  Whereas CIOs are about corporate capability, CFOs tend to be about managing risk and insuring return on investment.  Where CIOs tend to be infrastructure builders, CFOs are called upon to account for performance of the entire enterprise, and while they certainly must keep long-term results on their radar screen, their focus tends to be on the shorter-term.

“CIOs definitely still have a strategic seat at the table, possibly even an enhanced seat.  The secret is collaborative decision making and a focus on capital neutral ways of leveraging information.”

In this sense, increased attention from the CFO may be a very good thing.  There remains a very strong sense that IT is strategically key to any possible recovery, and most visions of this recovery are going to require increased leverage, particularly of the technology that has taken the place of human resources lost during the recession.  As CFOs place growing focus on the IT function along with the CIOs that ensure that these functions deliver for the organization, in essence, CFOs are bringing CIOs along in core strategic discussions and providing more access to the CEO. Nowhere is this more salient than in the provision of unified communications services, a capability that IT pays for, but upon which the entire organization depends. The secret is collaborative decision making. See “Bridging the CFO-CIO Gap” from IT solutions provider Logicalis.

Indeed, rather than viewing their incentives as being at odds, CIOs should climb on board and work together with CFOs to insure that necessary IT investments to provide long-term capability are able to produce ROIs that make it possible to sell to CEOs and boards. Often, this seems like the proverbial “doing more with less,” but CIOs shouldn’t forget one of the most potent weapons in their arsenal – and that is the “information” in information technology.

After all, that’s why IT was born out of the accounting function in the first place.  CIOs have at their finger tips vast reservoirs of information that offer the prospect of squeezing more return out of existing capital investments.  Sure, the task is daunting.  As the bottom has fallen out of data storage costs, we are all capturing and storing more and more data related to all aspects of the enterprise.  But internal Business Intelligence efforts, when combined with the expertise of trusted partners (whose fees can often be made contingent on results), have the potential to work accounting magic – the capital neutral investment.  Particularly when intelligence allows reductions in recurring costs, the result can be additional resources for infrastructure investment.  Not to mention dollars that drop straight to the bottom line.  That way, everybody is happy.

For a study representative of this rosier CIO picture, see, “Staying the Course? Technology Decision-Making in Turbulent Times,” which was published by the Economist Intelligence Unit in 2009, but remains as relevant, if not more so, today.

Written By:  Pete Wilson, CEO, TelAuthority, LLC