The relationship between CFOs and CIOs is strengthening, with 86% reporting improved collaboration. However, this shift brings challenges: only a fifth of CFOs are satisfied with tech investment outcomes, and ERP upgrades are seen as least valuable. As CFOs increasingly control tech budgets and final decisions, CIOs must navigate this new landscape carefully, balancing innovation with financial prudence.
The influence of CFOs on IT is on the rise as the costs and expenses of IT continue to increase, as reported by Rimini Street.
These results are based on a survey conducted by Censuswide between March 12 and April 2, 2024. The survey included 2,937 Chief Financial Officers and Chief Information Officers from various global industries such as manufacturing, retail, telecommunications, utilities, financial services, and energy.
CIOs are expected to provide significant returns on investment for chosen technology investments due to budget constraints and the need for tangible outcomes. By collaborating closely with their CFO counterparts, CIOs can play a crucial role in achieving profitable results for the company by prioritising projects that align with the organization’s financial and growth objectives.
The findings indicate that the partnership between the CFO and CIO is growing stronger, with 86% reporting that their relationship has improved.
The role of CFOs in making decisions about IT investments is becoming increasingly significant. According to the data, 72% of CFOs who participated in the survey state that they are responsible for determining the budget for technology, while almost 41% of CIOs report that their CFO colleagues are the ones making the final decisions about the underlying technology.
The increased cooperation and mutual responsibility between the two parties may result in higher profits for the company, as reported by 49% of CFOs who attributed improved business performance to the positive relationship between CFOs and CIOs.
According to Gertrude Van Horn, CIO of Rimini Street, collaborating closely with the CFO during strategic alignment and initial planning stages enables technology teams to make informed choices that align with the company’s overall vision and financial objectives.
Furthermore, chief information officers (CIOs) are addressing the issue of increasing IT expenses by making investments in new technology, which accounts for 44% of their strategy, and by opting for outsourcing of application support, which makes up 36% of their approach.
Chief Information Officers (CIOs) are making significant investments in Artificial Intelligence (AI) to combat the increasing expenses of IT. According to a collective 87% of CIOs, leveraging historical data is crucial in optimising the effectiveness of AI initiatives for Enterprise Resource Planning (ERP). However, a whopping 94% of them also acknowledge that their data requires significant or at least moderate cleansing to achieve success with AI.
One aspect that CIOs are prioritising in their budget is to enhance the ability to forecast costs. CIOs have found that outsourcing IT services can assist in addressing the issue of losing IT talent and employees. According to their reports, the advantages of outsourcing include assistance with application customisations (33%), a wider range of service and support solutions (33%), improved quality of service and support (32%), and quicker resolutions (30%). Additionally, 26% have stated that they were able to reduce costs.
In addition, not all technological projects are providing benefits for the company. According to CFOs, ERP upgrades or migrations (23%) were the least successful in delivering value.
According to the survey, the top three areas for technology investments that are seen as most valuable for the business are security (28%), emerging technologies like AI, business intelligence and data analytics (27%), and SaaS technologies that directly interact with customers (27%). However, CFOs seem less enthusiastic about investing in ERP upgrades or migrations.
According to a survey, only a fifth of CFOs are satisfied with the outcomes of their technology investments. Many of them encounter adverse effects, such as higher ongoing expenses, restricted future adaptability, or disruption to their business.
As a result, it is necessary for CIOs to take into account the potential consequences of their technology strategy in both the immediate and distant future.
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