A CIO recently complained to an executive recruiter that his company’s CFO was making his life a living hell. “The CIO came on board to effect change,” says Kevin M. Rosenberg, a managing partner with BridgeGate, an executive recruitment firm in Irvine, California, “but he is constantly being pummeled by demands of his company’s CFO to focus on cost controls and produce savings, while expecting service levels and IT efficacy to increase.”
Forced to pinch pennies, the CIO has not been able to roll out the services he envisioned for the company, and “his stock has fallen drastically with his users,” says Rosenberg.
The IT chief’s unhappiness with his CFO is hardly unique. Many CIOs voice the view, publicly and privately, that CFOs often don’t grasp the strategic importance of IT, that they use CIOs as scapegoats for cost overruns and failed IT projects, and thanks to their increased role in IT management, have so devalued the position that no quality CIO would take the job—at least if he or she had to report to a CFO.
CFOs, of course, have their own gripes, which can be largely summarized as: “IT is expensive, complex, and often fails to deliver, so let’s do something about it.” CFOs answer to investors on a quarterly basis, and with IT now accounting for more than half of all capital spending, it’s not only a logical but an essential place to look for savings.
That said, few would disagree that greater harmony could be brought to bear in CFO-CIO relationships. Toward that end, CFO IT spoke to a number of CIOs and encouraged them to be as candid as possible about their grievances. Think you’ve heard it all before? Think again.
Blame the Consultants
As one example, consider a recent survey by The Hackett Group that found that at nearly half of 22 companies polled, there is no IT representation on the critical steering committees that are addressing Sarbanes-Oxley compliance efforts. “CIOs are being ignored even though no company can possibly deal with Sarbanes-Oxley without IT,” says Allan A. Frank, president and chief technology officer at Answerthink, The Hackett Group’s parent company.
CIOs didn’t help their cause—or their credibility—much when many of the major IT initiatives of the past few years proved less successful and more costly than expected. “There was push-back after many Y2K, CRM, and ERP efforts didn’t deliver as advertised,” says Michael Zammuto, a former corporate CIO who is now chief technology officer at Ecometry Corp., in Delray, Florida. “As a result, the CIO position today is more reactive than proactive.”
“CFOs believe that CIOs do not care, can’t manage budgets, and always require more money for systems that generate no revenue,” says Dhafer AlShahri, CIO at AlFanateer Hospital in Saudi Arabia.
AlShahri argues that this image of the CIO as the last of the big-time spenders—and IT as a money pit—is hopelessly out of date. And many CIOs argue that expensive and ultimately disappointing (or worse) projects were sold by big consulting firms, which pitched ERP and the like as silver bullets to CEOs and CFOs, often going around, instead of through, IT.