Only 5% of CIOs can authorise IT spending – Gartner
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Financial executives hold the IT department reins, analyst firm finds, as CIOs make independent decisions on investment in only 5% of organisations
Most CIOs cannot authorise IT investments on their own, and instead require the approval of a chief financial officers (CFOs) according to a report released today by Gartner.
The report, which was carried out by Gartner with the Financial Executives Research Foundation (FERF) and the Committee of Finance and IT (CFIT), shows that the influence of CFO over IT spending is growing. Only 5% of CIOs can authorise IT investment alone. The report included 344 respondents, 95% of whom were senior financial executives.
John Van Decker, research vice president at Gartner, said it is now critical for CFOs to have a good understanding of the IT side of their business. "[CFOs'] 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," he said.
The report also found that larger companies treat IT investment differentl than smaller organisations. "In companies with less than $50 million in revenue, 47% of IT departments report to the CFO," it foun 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 percent of companies with $1 billion or more in revenue have IT reporting to the CFO.
FERF's research director Bill Sinnett said the results showed business are improving their financial control of IT. "This year's results show an increasing enterprise requirement for greater financial control of technology initiatives in the firm, as well as better alignment between the technology and the strategic direction of the enterprise, with the CFO primarily leading this coordination," he said.
The report also examined the perception of IT projects in business. Nearly half (47%) of survey respondents viewed IT as being strategic, while 28% said IT fulfils what is asked of it.
The majority of firms said that business intelligence was their top technology investment target, while 46% reported plan to invest iin business applications.
The survey also showed that senior financial executives expect a 'conservative' recovery in IT spending through 2011, with only 6% saying that expect to see levels of growth consistent with pre-2008 levels.
"IT organisations 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 flexibility will help firms select best practices that could make business processes work better, thereby providing better business insight."
