CFO Influence in IT is Growing

July 6, 2011 ( - CFO influence in IT is growing as CFOs alone have authorized 26% of all IT investments, while CIOs alone have authorized only 5% of IT investments, according to a recent study.

The joint study by Gartner, Inc., Financial Executives Research Foundation (FERF) and the Committee of Finance & IT (CFIT) of Financial Executives International (FEI) also showed that 42% of IT organizations report directly to the CFO, and 33% of IT organizations report to the CEO.   

According to a press release, the survey results varied by the size of the company. For example, in companies with less than $50 million in revenue, 47% of IT departments report to the CFO. Fifty-eight percent of companies with revenue of more than $50 million and less than $250 million have IT departments that report to the CFO, while 46% of companies with $1 billion or more in revenue have IT reporting to the CFO.   

“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,” said John Van Decker, research vice president at Gartner, in the announcement.   

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%). Business partnering and sound project management continue to have more of an impact on IT investment success than technology prowess.   

The survey 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. Forty percent see the level of growth consistent with 2010; just 6% expect the economy to rebound this year beyond 2008 levels.   

When it comes to how CFOs are making IT investments, and which guidelines they used to guide 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 from the perspective of the senior financial executive. For a combined 65% of choices, BI ranked as the technology with the highest demand, while 46% ranked enterprise business applications, such as enterprise resource planning (ERP) and integrated financial management solutions, as investment priorities. When viewed within the larger scope of operations’ infrastructure, however, business applications (30%) were seen as more important than BI (23%) in 2011.   

Of all organizations in the study, 41% said 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% of CFOs said they see the CIO as a strategic partner.   

Only 47% of survey respondents viewed IT as being strategic, while 28% said IT fulfills what is asked of it. Thirty-five percent of organizations see IT as being a strategic driver of business performance; 8% view IT as a key contributor to the enterprise’s competitive position; and 4% see it as transformational.   

The report is available at