At a time when automation of business processes was the biggest fad among large enterprises, it was natural for CIOs to report to CFOs because such transformations occurred mostly in the areas of finance, such as in deploying accounting packages.
As businesses expanded-- and as technological innovation became more fast-paced--IT deployments have gone out from the old setup and spilled over to influence the way entire organisations carry out their work.
A recent Gartner survey, however, reveals that more and more IT organisations are finding themselves easing back into the old setup, especially due to the recent financial crisis and the fact that higher-ups are still stuck in the IT-as-a-cost-centre conundrum.
In the survey of over 480 senior finance managers, 42 per cent of IT organisations are already reporting to the CFO, while a staggering 53 per cent prefer to move to this setup.
Gartner's survey talked with finance controllers across the globe. CIO sister title Computerworld Philippines ran its own survey, asking local CIOs about reporting setups in their own companies. Of those surveyed, only 25 per cent said they report to the CFO, while 65 per cent report to their respective CEOs.
Of those CIOs who report to their CFOs, 80 per cent said the setup has been beneficial to their company, while the remaining 20 per cent said otherwise.
Surprisingly, all of those who responded that they are not currently reporting to the CFO said their IT organisations are better off under the CFO.
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CIOs conceeding buying role to CFOs, survey finds
"Where the CIO should report is a question as old as the CIO role itself," said John Van Decker, research vice president at Gartner. "CFO reporting can lead to success if the CFO has a deep understanding of IT's value."
CULTIVATING CFO-CIO RELATIONSHIP
CFOs who appreciate the work of IT understand the intricacies of the department's cost requirements, and would generally vote in favour of IT investment.
This, however, is hardly the case in reality, according to Mayi Valdes, director of operations at Encash in the Philippines, an independent deployer of ATM machines. "CFOs tend to look at the cost of IT projects--and will advocate evaluations looking for the most 'cost-effective' (or cheapest) solutions," he relates, adding that this strategy has been proven, time and again, to be ineffective.
Chris Puttick | Published: 15:38 GMT, 13 August 2010
CIOs and CEOs should learn to communicate before it is too late for the company. This is a two-way thing, not (only) the CIOs needing to change. Information systems can make or break a company, the CEO needs to have enough of an understanding to be able to communicate with their CIO about them and the technology that is transforming them. Presumably they have learnt enough "finance speak" to talk to their CFO?