The CFO’s influence over their firm’s technology purchases has grown tremendously over the last several years, and they are increasingly either collaborating with the CIO or outright taking over their traditional responsibilities. Thirty-nine percent of respondents to the 2013 Gartner FEI CFO Technology Study said that IT organizations reported to the CFO, and their influence over the department was found to have gone up 44% since 2010/2011.
There are a number of reasons behind this land grab. Firstly, the importance of technology means that IT purchases now have major implications for all aspects of a firm, and it makes sense that all senior executives be involved in the decision making process in some capacity. This is especially true of the CFO because they have control of the money and, given the high costs often involved and the pace of change, it is vital that they find value in new acquisitions. This all the more important a consideration in the economic conditions that have followed the financial crisis. In such a challenging and precarious climate for businesses, coupled with a number of highly-publicized IT failures, firms are less inclined to gamble on costly systems, aware also that they are now so important to organizations.
As a result of the shift in their responsibilities, the CFO must increasingly develop their technological knowledge. Businesses must do more to ensure their CFO is adequately educated in line with his role. Indeed, responding to Accenture’s ‘CFO as Catalyst for Change’ report, CFOs ranked technology knowledge as second only to industry knowledge.
A large part of the responsibility for making sure CFOs have the proper knowledge also falls on the CIO, whose role too must adapt as a result. The CFO and the CIO must learn to collaborate across the board. They have the skill set and powers in place to form a powerful alliance and improve an enterprise’s performance, and it is vital that both have a common understanding of how to leverage enterprise technology.
What impact is this having on IT departments? Scott Brennan, global managing director of Accenture's Finance & Enterprise Performance unit, notes that: ‘About a third of the CFOs we talked to are playing a leading role in building a rationale for business transformation, and almost 60% indicated that investments in things like big data and analytics are going to be a source of competitive advantage.’ Big Data breakthroughs are now being linked straight to financial forecasts and budgets, and CFOs are increasingly seeing that innovation is necessary for future profits, and using their influence to drive it forward.