Ann Senn, Principal, Global CIO Advisory Services Leader, Deloitte Consulting LLP, and Ken Porrello, Principal, Midwest Regional Managing Director, Deloitte Consulting LLP, co-authored the article.
Tighter reins on expenses and technology budgets. Strict corporate controls and demands for stronger governance. Given some of the issues making headlines today, one might speculate that chief information officers (CIOs) are becoming subordinate to powerful chief financial officers (CFOs). Go beneath the surface of the issues, however, and the real story is very different. The factors driving corporate agendas are, in fact, leading CIOs and CFOs toward more collaborative relationships. They're also leading to closer cooperation between finance and information technology (IT) departments, which are working as peers to increase stakeholder value.
In effect, the door between the CIO and CFO offices is opening wider, and the executives are building a path to regular interaction that allows the IT function to excel in meeting the business' needs, not simply to comply with regulatory mandates or budgetary strictures. The shift is occurring on a systematic level, in the way that key business processes, such as budgeting and investment decision making, are handled. It's also occurring at a grassroots level, evident in the frequency, pace and level of interaction between finance and IT staffs.
The closer working relationship has developed in reaction to a variety of pressures — for example, regulatory, financial and internal customers. The challenge for CIOs and CFOs is to turn this "relationship of necessity" into a platform for driving new levels of innovation and business performance.
Let's start with the facts. According to Optimize's third annual "Defining the CIO" report, nearly 60 percent of CIOs report to their chief executives, just as most CFOs do (see chart, below). But there has been a rise in the number of CIOs reporting to CFOs — from 8 percent in 2003 to 15 percent in 2004 and 22 percent in 2005. Some IT chiefs have chafed at this shift in the reporting structure, spurring headlines about friction between the CIO and CFO. Others take it in stride. General Motors CIO and group Vice President Ralph Szygenda summed it up this way in his April 2004 column in Optimize: "It's important to understand that you don't have just one boss as a CIO, though your organizational chart may say so. In essence, you report to every senior executive in your company."
What's driving CIOs and CFOs to collaborate more? We divide the catalysts into two categories: ones that affect many corporate functions, and those that specifically affect finance and IT.
To read the complete article, download the attached PDF or read it online at Optimize's Web site.
