Right Answer to Whether CIO or CFO Should Make IT Investments? Neither

Ann All
Slide Show

Forces Shaping the CIO Agenda in 2011

CIOs need to get the balance right between utility and innovation in order to secure influence in the future.

If all you did was read headlines on stories appearing in technology trade publications, you'd think CIOs and CFOs can't stand each other. From my IT Business Edge colleague Susan Hall we have "Survey: CIO-CFO Relationship Still Prickly" and from Computerworld we have "CIOs Losing Control of IT, Survey Finds."

 

From a post on the CFO Alliance Blog there's "As CFO Cost Benefits Trump CIO Emotion, IT Gets Bumped From the C-Suite." As if the headline on that last one weren't enough, the post includes video of a group of CFOs trashing CIOs. (The post doesn't make clear where the video comes from, but I assume it is from a Boston CFO Alliance meeting that is referenced.) The post attributes a decline in CIO influence to "the growing influence of CFOs and the dispassionate application of capital budgeting metrics," with author Jack Sweeney noting "... CIOs are being held accountable for the cost/benefit of their IT spending, and many are coming up short."

 

Well.

 


As I've written before, mentioning executives I've met personally, some CIOs and CFOs consider themselves partners. Last summer I cited a Forbes interview with Symantec CIO David Thompson and CFO James Beer that shows how such a partnership can yield benefits for both executives as well as their employer. One key that seems to help their relationship work is a recognition that not every investment will yield a direct bottom-line benefit - something that at least some members of the CFO Alliance might have a problem with, judging by their video.

 

Both Susan's post and the Computerworld article reference a survey administered by Gartner and the Financial Executives Research Foundation that found, among other things, that CFOs "have authorized 26 percent of all IT investments, while CIOs alone have authorized only 5 percent of IT investments." The temptation with this survey, naturally, is to fall back into the CFO vs. CIO mentality.

 

But I like Thomas Wailgum's take on the survey on ASUG News. As Wailgum points out:

I was under the impression that good IT governance on technology investments always amounted to either board of directors or executive leadership teams who were responsible for making these types of decisions. Right? ... A CFO -- or a CIO, for that matter -- should never, ever be solely responsible for making corporate technology decisions. Isn't that just good governance -- a team of cross-functional executives and line of business managers evaluating what's best for the company? Not one person with ultimate discretionary power?

Amen, brother. IT governance is a team sport. Any company with one person solely in charge of its technology investments needs to ask itself those questions.

 

And any company that doesn't think it needs a formal IT governance program should review the four reasons for IT governance by MWD Advisors' Neil Ward-Dutton, which I shared in a post a few months ago. They'd also do well to read this post on creating a governance program, featuring suggestions from O'Reilly Media CIO Jonathan Reichental, the IT Governance Institute and Alan Calder, author of "IT Governance: a Manager's Guide to Information Security and ISO27001/ISO27002.?

 

For CIOs looking for a closer relationship with their CFOs and/or a way to clearly demonstrate IT's value to business colleagues, I'd recommend reading this post about how John Hancock Financial Services' CIO Allan Hackney won support by introducing metrics and a service catalog.



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Jul 12, 2011 2:06 AM Yisarel Dancziger | Digital Fuel Yisarel Dancziger | Digital Fuel  says:

I couldn't agree more. Sometimes it feels as if we're almost trying to create a tension that shouldn't really be there. Of course, a lot depends on personal chemistry, but the CIO-CFO relationship need not be a tense one, and they absolutely can and should work together to advance the company's business goals.

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Jul 13, 2011 6:43 AM Chris Peters Chris Peters  says:

Excellent blog on this topic. I have been personally bothered by the us vs them mentality expressed in these surveys recently. 

To derive the maximum value from IT investments and operations on behalf of the business, the CIO and CFO need to work in partnership with the CEO to collectively manage the resouces and capabilities of the company to improve business results and create value for shareholders.  Good CIOs and CFO's are not confused about their role and find ways to work through personality issues and conflicts in organizational charters and work towards a common purpose - to create business value.

At Intel IT, we realize that when we do this well, we create a competitive advantage for Intel.  Check out our IT best practices at www.intel.com/IT

Chris (@chris_p_intel)

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