Let a financial type run your data center? Survey says it may happen

Summary:Driven by cloud computing, finance and IT departments are now set on an unprecedented 'course of collaboration.' What does this mean for CIOs?

Let the bean counters run the data center? Ha!

Still, surveys suggest they are getting more involved in decisions shaping information technology, especially as cloud computing catches on.

In fact, the role of the chief executive officer (CIO) will look very different in five years' time, says a new survey of 203 financial executives from Getronics. The survey found that almost one in five CFOs and financial executives (17%) believe that the role of the CIO as it currently stands is in jeopardy. In addition, 43% of the financial decision makers believe that the role will merge more with finance. A third (31%) believe that CIOs will come from a non-technical background.

The role of the CIO has already been subject to a number of changes in recent years, with 77% of CFOs and financial directors claiming that they have already assumed greater responsibility for IT decisions over the past 1-2 years.

Along these lines, respondents revealed that 38% of businesses that have rolled out a cloud computing solution had the project initiated directly by the finance department, rather than IT. A further 39% stated that they had been directly involved in cloud projects, but only after the IT department had initiated it. This trend can be attributed, in part, to the attractive utility model of cloud services, where companies avoid long-term contracts and can track ROI and costs far more accurately.

This maps to predictions by Gartner that much of the work of IT is being integrated into business units, versus remaining in standalone IT departments.

In survey research I recently completed, we found IT departments do typically take the lead in cloud projects. In a survey of 364 IT and business managers conducted for the Oracle Applications Users Group, part of my work with Unisphere Research/Information Today Inc., we found close to three-fifths of respondents, 57%, say the original recommendation for cloud adoption came from IT managers or executives. Another one-fourth of cloud projects came from the top executive suite—at the behest of CEOs, CFOs or CMOs. (Disclosure: the research was sponsored by Oracle.)

Ultimately, however, IT executives will take a step back and let business executives lead as time goes on with cloud engagements, the OAUG survey finds. A majority, 56%, say CEO, CFO, or executive management is ultimately in charge, versus 45% saying IT departments have the final word in cloud decisions.

The question we need to ask is: do business leaders really want to spend a lot of time learning and managing the intricacies of cloud computing, or for that matter, the issues that will be involved in integrating cloud services with on-premises systems?  What about architecture and planning?  Rather than shift IT decisions to financial executives, the shift to cloud may elevate the role of IT executives within many enterprises. Line-of-business people are not qualified for — or for that matter, really interested in — sifting through and evaluating all the cloud options out there, at least for technical merits. They just want to get things done, and are turning to IT executives to assist in the process. IT needs to be the business partner that plans and strategizes what types of technology solutions the business needs to move forward -- whether those solutions are on-premises or come from somewhere else.

Still, there appears to be bad blood between financial and IT executives that needs to be addressed. Two out of five (38%) CFOs and financial directors in the Getronics survey believe that CIOs do not hold a good level of financial understanding. Surprisingly, 40% also believed that their CIOs need a greater understanding of the IT function itself. Compounding this lack of understanding of both roles, more than half (56%) 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 Getronics research also reveals that CFOs and other financial decision makers are increasing their technology understanding, with only 2% admitting they “were not aware of the term cloud computing.” This reveals increasing efforts from finance to truly understand technology and can be seen to be creating opportunities for the CIO to gain company-wide buy-in for cloud services as business requirements evolve.

Okay, sounds like the basis for good teamwork, which is what is needed to make cloud engagements and private cloud successful. Accordingly, the report observes that finance and IT departments are now "set on a course of collaboration and consolidation previously unseen in the working world."

While the Getronics study cautions that "there is a temptation for IT to safeguard its old working models and silo its activity," management of new, innovative systems such as SaaS or PaaS "will require input from both IT and finance."

(Photo: Wikimedia Commons.)

Topics: IT Employment, Banking, CXO

About

Joe McKendrick is an author and independent analyst who tracks the impact of information technology on management and markets. Joe is co-author, along with 16 leading industry leaders and thinkers, of the SOA Manifesto, which outlines the values and guiding principles of service orientation. He speaks frequently on cloud, SOA, data, and... Full Bio

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