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Gartner: Only 5% of CIOs Can Authorize IT Investments Alone
According to a new joint study by Gartner, Inc. and Financial Executives Research Foundation, CIOs alone have authorized only 5% of IT investments while the CFOs alone have authorized 26% of all IT investments which indicates that their influence in IT is growing. Additionally, the survey found that 42% of IT organizations report directly to the CFO, and 33% of IT organizations are reporting to the CEO.
The survey of CFOs is designed to gather opinions from financial executives about technology, key trends and planned improvements to operations. The Gartner/FERF technology survey included 344 respondents (66% of respondents were CFOs, 9% business unit CFOs, and 95% could be considered senior financial execs).
“This high level of reporting to the CFO, as well as their influence in technology investments, demonstrates the need for companies to ensure that their CFO is educated on technology, and underscores just how critical it is that the CIO and CFO have a common understanding on how to leverage enterprise technology,” John Van Decker, research VP at Gartner said in a statement.
Senior financial executives were asked how to ensure that the relationship between the business and IT is successful and effective. The responses pointed to a clear ownership of the project (38%), the business case for the project (37%) and the project management (36%).
The study also showed that senior financial executives expect IT spending to recover conservatively in 2011, with 38% of respondents saying that they do not expect this growth to reach the level experienced before the recession in 2008.
When it comes to how CFOs are making IT investments, 72% of firms said that they will invest where they see a competitive advantage driven by IT. Business intelligence (BI) is the top technology initiative. For a combined 65% of choices, BI ranked as the technology with the highest demand, while 46% ranked enterprise business applications as investment priorities. When viewed within the larger scope of operations’ infrastructure, however, business applications were seen as more important than BI in 2011.
41% of surveyed organizations believed that IT is appropriately funded for 2011, and 31% said that IT has the technological capability to move the firm forward. However, only 30% said that IT truly fulfills its mission, meaning that 70% do not believe that IT is providing business benefits. Furthermore, only 32 percent of CFOs said they see the CIO as a strategic partner.
“IT organizations must understand the CFO’s views of technology investment decisions and must work toward developing a relationship with the CFO that resembles a business partnership,” said Mr. Van Decker. “This will enable the business to become more agile. This flexibility will help firms select best practices that could make business processes work better, thereby providing better business insight.”