When CIOs and CFOs collaborate poorly, it has a significant negative impact on the benefits of IT transformation. Forbes Insights and Dell EMC have conducted a global survey of 500 CEOs, COOs, CIOs, and CFOs, and this point was one of their major conclusions. Here are some other eye-opening insights of their research.
Transforming on (for?) a Dime
Among the key findings: 89 percent of executives agree that “significant barriers” prevent CIOs and CFOs from working together more closely on IT transformation. However, the companies that fully succeed with IT transformation enjoy gains of at least 7 percent to both sales and profits—something to shoot for. The most common investment areas for 2018 are (in order) big data platforms, cloud services, and social media activities. Meanwhile, the top goals of IT transformation include (in order) reducing IT costs, being first to market with new products/services, and reallocating funds to strategic business projects.
In 2018, nearly a quarter of enterprises will dedicate between 26 and 50 percent of total budget to IT transformation, and another three fifths of enterprises will dedicate between 11 and 25 percent. This is a drastic improvement compared to 2017, where only 3 percent of businesses made 26-50 percent investments, and 54 percent of businesses made 11-25 percent investments.
When do businesses see an ROI on these transformation efforts? Well, nearly half of respondents expect to see returns in 13-24 months, while another 38 percent expect it after 24 months. Either way, a large majority do not expect fast returns.
But to get back to the CIO/CFO relationship—63 percent of those surveyed find that the risk of falling behind competition increases when that relationship is not strong. Nearly half of respondents also believe it delays technology investment decisions. And a little over a third of respondents believe it makes it more difficult to scale activities. These are all serious concerns, and the report authors say this about the challenges of the relationship:
For their part, CIOs say some CFOs have outdated attitudes about the role of CIOs. “Collaboration is challenged when a CFO sees IT as just a cost center,” says CIO [David Bray of the U.S. Federal Communications Comission]. But he also acknowledges the vital role CFOs serve. “Left on their own, CIOs may not know the overarching financial goals of the organization,” Bray says. “That’s why it’s important to have a CEO, CFO or COO who can clearly outline the business and financial goals of the organization, and let the CIO identify the technical options for achieving them through IT Transformation. In turn, the CIO can offer choice architecture options to different stakeholders, be they the CEO, COO, CFO, or other division representatives. Specifically, strategy-savvy CIOs should frame what they propose as business cases.
The research also examines the differences between transformation leaders and laggards, though the findings there are unsurprising, i.e., leaders are doing great and laggards are not. For this data, and geographic breakdowns on the progress of IT transformation efforts, you can view the full report here (reg. req.): https://www.forbes.com/forbes-insights/dell/it-transformation/