July 07, 2011, 6:05 AM — In an increasing number of organizations, the CIO is not the person who decides what IT projects should get investment. That job now belongs to the CFO .
A recent survey by Gartner and two financial management organizations found that CFOs have "authorized" 26% of IT investments, an increase of as much as 15% from the prior year.
By authorizing, this means that CFOs are playing an active role in shaping IT direction.
The survey also showed that 42% of IT organizations report to the CFO, and 33% to the CEO.
The study offers a clear warning and advice to CIOs, says John Van Decker, an analyst at Gartner.
The IT priorities of CFOs may be about improving business processes, efficiency and using IT to gain competitive insight. The CIO, by contrast, may be less focused on business intelligence, and more interested in projects that advance cloud computing and virtualization , Van Decker said.
"There is a message in the study that IT needs to get much closer to business," Van Decker said. "If they (CIOs) don't do that I think what you are going to see is more of the control being taken away."
Another clear warning for CIOs coming from this survey was its finding that only 30% of respondents believe that IT is providing clear business benefits.
Even more alarming, perhaps, was a finding that "only 32% of CFOs said they see the CIO as a strategic partner."
This survey involved the Financial Executives Research Foundation, and the Committee of Finance & IT of Financial Executives International. It included responses from 344 qualified respondents, with 46% working at companies with more than $1 billion in annual revenue.
Van Decker includes a caveat in this survey, namely that it reflect the bias of CFOs and what they believe is occurring in organizations.
Despite the growing role of the CFO in technology decision-making, Van Decker doesn't see the CIO's job disappearing, but it may erode if CIOs don't do a better job in working with the business.
"If the [CIO] role doesn't evolve to be more business oriented," Vandecker said, "business areas will go off and do their own thing and involve IT at a minimum."