Why Is the CFO Still Boss of IT?

By Thomas Wailgum, CIO |  Business, CIO

The generally accepted account of why CFOs have been installed as IT's de facto boss is this: IT was forged in finance departments to help with the digitization of accounting functions; thus the majority of "IT spend" in the early days was on financial computing initiatives. It was only logical that that's where IT was placed on the org chart.

And that's where IT and its de facto chiefs stayed for decades.

There was also, perhaps not coincidentally, always a little breathing room between CEOs and the expanding and bewildering IT departments. IT executive Scott Brower, commenting in the forum, offered this rationale: "As a support organization, [IT] was not something that the CEO felt the need to keep close so it made it sense to have real financial stewardship controlling it," Brewer wrote. "This also created a buffer where the CFO, knowing business, could deliver the necessary message to the CEO rather than some techies speaking in 1's and 0's."

Of course, the CFOs spoke in 1's and 0's too--but the gulf between the two departments always seemed vast: balance sheet 1's and 0's versus programming code 1's and 0's don't fit together well. But over the years, CEOs wanted constant control over ballooning IT spend. And who better to do that than the Chief Bean Counter?

Several commenters in CIO Forum discussion pointed out this salient fact, however: IT is where it is (still under the CFO at many companies) because that's where the CEO wants it to be. In other words, don't blame the "clueless" bean-counter for the reporting assignment, who may not even want the responsibility in the first place. Talk to the head honcho.

Ennis Alvarez, EVP and COO at IT consultancy Brivea, sensibly wrote on the forum that "when the executive team makes the decision to have IT report to the CFO, it is mainly because we (the IT management team) have failed to 'earn the seat' at the top by not clarifying the value that IT is contributing to the organization, nor being clear about where the IT budget is being spent and why that is the best return on that investment."

A C-Level Exec with No Cache

Since the forum consisted of self-selected IT types, the tenor of the responses to the question--What makes a CFO uniquely qualified to be heading up IT?--can best be summed up this way: absolutely nothing. Other snarky responses included: Why doesn't the COO or CMO report into the CFO? And then there was a clever flip of the initial query: What makes the CIO uniquely qualified to be heading up finance? (Take that!)


Originally published on CIO |  Click here to read the original story.
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