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Are CIOs Doomed to Vanish into the Cloud? Many CFOs Think So.

Roy Harris | Feb. 28, 2012
In one survey of UK finance directors, 17 percent say the CIO position could disappear from the business landscape within five years' time.

It sounds shocking, perhaps -- until you think about the rapid pace at which corporate finance is becoming involved with technology. But 17 percent of corporate financial decision-makers in a recent UK poll believe the position of chief information officer will disappear from the business landscape in the next five years.

Of the 203 CFOs and finance directors who participated in the January survey, part of a report titled "The Changing Role of the CFO," just released by Getronics UK, another 43 percent say that the CIO's role eventually will be subsumed within finance. Further, 31 percent believe those in a CIO role will be coming from a non-technical background in the future. Getronics is a consultancy that is part of KPN, the Dutch telecommunications provider.

Generally, the reason for such dynamic predictions seems to involve the changing way businesses purchase and consume IT -- especially because of the increasing importance of utility-based and cloud computing, in which IT services are rented out on a pay-per-use model, rather than purchased and installed outright.

What CIOs Don't Know About Finance
In a wide-ranging series of other results --- all from financial decision-makers with UK companies having at least 1,000 employees --- respondents also show, among other things, a low opinion of how much CIOs know about finance. For example, 38 percent say CIOs have less than a good level of financial understanding. And, remarkably, 40 percent say that their own CIOs need a greater understanding of IT itself.

"Compounding this lack of understanding of both roles," Getronics said its press release about the study, "more than half [56 percent] of the CFOs and financial directors surveyed believe that a lack of integration between finance and IT limits the impact on cost savings achievable from IT projects within their business."

The findings suggest strongly that more integration is needed between the two departments --- and 48 percent of those polled said such closer integration is already taking place at their companies. (On the other hand, a decrease in such integration moves was cited at 35 percent of the businesses.)

Worries about IT Maintenance
Other poll questions concerned what IT spending worries were the greatest for finance decision-makers. Maintaining IT infrastructure is a key concern among 64 percent of respondents, while 48 percent say they are concerned by the level of expenditure paid to consultancies, and 47 percent list license payments for software.

Respondents indicate that they believe their own tech understanding is increasing, with only 2 percent saying they are "not aware of the term cloud computing." Most were able to provide a meaningful description of its use.

As the CIO role continues to evolve, Getronics UK said, more consulting for businesses will be driven internally, as outsourced consulting decreases.

The study recounts how the role of the CIO already has evolved recently, with 77 percent of the CFOs and financial directors saying they already have assumed greater responsibility for IT decisions over the past two years. The poll's results show that 38 percent of businesses rolling out a cloud computing project recently had that cloud project initiated directly by the finance department, rather than by IT. Another 39 percent said that finance had been directly involved in cloud projects, but only after the IT department initiated it.

Remember Those First CIOs?
"The role of the CIO has often been a point of contention within many organizations since its very inception," Mark Cook, CEO of Getronics UK, said in a press release accompanying the study. "Some of us in the industry will remember when the first IT roles were created in business and that these were predominately always within finance. It's only in recent years that we've seen IT as a standalone department and we're now seeing it come full circle, with one crucial difference: the CIO today is responsible for greater levels of innovation than ever before."

He added: "We're seeing CIOs moving away from previous years of having to lead on daily IT operations and maintenance into that of a provider of strategic consultancy to finance and the wider business. Only by freeing up CIOs from the day-to-day burden of managing assets will organizations be able to truly realize the value that a CIO can bring to their business.

Nearly a fifth of businesses with finance chiefs responding to the online poll say that cloud services account for at least "a small part of their IT use." The cloud's reputation has been bolstered through its association to "positive business change," according to the poll, with 64 percent of respondents identifying it as a source of "improvements to operations."

The study's authors conclude that cloud adoption is "progressing, albeit at a moderate rate."

 

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