CFOs Join CMOs In Tech Power Grab

Chief financial officers' level of influence over technology decisions has increased during the last three years. This is the key finding of a just-released study, and it's a familiar trend, as the same thing is said to be happening with chief marketing officers.

Some CIOs might view increasing CFO and CMO influence over tech decisions as a threat, but executives at Oracle and Accenture, the co-sponsors of the CFO study, urge CIOs to view the trend as an opportunity to educate and cooperate with C-level peers.

The CFO study was carried out by Longitude Research, which surveyed 930 CFOs from organizations of various sizes and around the globe. Where most CFOs were wrapped up in cash-flow analysis and cost-control efforts from 2008 until 2010, the study found that many are now looking beyond tactical financial concerns.

"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," Scott Brennan, global managing director of Accenture's Finance & Enterprise Performance unit, tells InformationWeek.

[ Want more on effective C-level cooperation? Read 6 Rules To Help CIOs, CMOs Be Smart Partners. ]

Transformation is about "working with line-of-business managers and IT to help companies drive more innovation," explains John O'Rourke, VP of product marketing at Oracle. Mobile and cloud computing initiatives also fall under the umbrella of transformation, he says, but big data breakthroughs such as sentiments analysis are seen as being closely tied to financial results.

"People are looking at what customers are saying about their products, their services and their company and they're linking it directly to budgeting and forecasting processes," O'Rourke explains. "If you're launching a new product, for example, that insight could impact your forecast, your pricing and what customer segments you decide to target."

CFO influence over IT is nothing new, O'Rourke admits, as some surveys show that up to half of CIOs are already reporting up through the CFO. (Of course, there is history here: In the early days of IT, one of the first power struggles involved IT chiefs fighting to report to the CEO, not CFO.)

Among the Oracle-Accenture study respondents, 38% say IT now reports to the CFO's office, and 84% say cooperation between CFOs and CIOs has increased during the last three years.

"They have to work together to decide how to reduce the cost of IT operations and shift more of the budget into innovation and pursuing growth," says O'Rourke.

The survey shows that 44% of CFOs are involved in decision on IT infrastructure purchasing and more than 50% are leading the purchase decisions on ERP. Similarly, Gartner has famously forecasted that CMOs will be outspending CIOs on technology by 2017. Marketing execs are influencing the selection of CRM, marketing automation and analytic systems.

How should CIOs adjust to the growing role and influence of CFOs and CMOs in company strategy and related technology decisions?

"There's a lot of new technology that these executives need to be aware of, so the onus is on the CIO to educate them on the return on investments in things like cloud, big data and analytics," says Brennan of Accenture. "The CIO may have to become as much an influencer as a decision maker."

That influence should be focused on putting a consistent strategy in place and avoiding too many isolated, one-off decisions that don't adhere to the plan. CMOs and marketing departments are notorious for going their own way on technology decisions, but "there has to be coordination" says O'Rourke, "to make sure everyone's thinking strategically about which things stay on premises, which get deployed in the cloud." The same goes for data management and software development standards, which are best kept consistent and in sync.

An upside of having CFOs or even chief operating officers or chief executive officers involved is that as IT budgets grow and decisions get scrutinized by executive-, management- or even board-level committees, oversight and accountability from senior executives can help projects happen and help ensure than CIO-endorsed standards are enforced.