ECONOMIC recession and slow growth are changing business dynamics in developed countries. While many

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organisations are struggling for survival, others are cutting costs at all possible quarters for sustenance. Given the scenario, the role of chief financial officers (CFOs) of companies has been gaining more importance and to an extent they are shadowing other business heads.

Among the most hit in the lot are the chief information/technology officers.

“CIOs were merely procurement officers for a long time. In this present situation, IT has to be aligned to business needs. Hence, CIOs are getting more evolved to think in business terms to justify their decisions,” says Jayabalan Subramanian, chief technology officer and co-founder of data centre services provider Netmagic.

“CIOs have to think about the business impact that each of their decisions will cause. Traditionally, CIOs would make their proposals to CFOs for clearance.

When a CFO has a clear mandate to cut costs, he would definitely not be interested in listening to any proposal that does not align with business goals,” he added.

CFO influence in IT is growing as they alone authorised close to 26 per cent of all IT investments while CIOs alone did so only for 5 per cent of the same as of early this year. Close to 42 per cent of IT organisations report directly to the

CFO and 33 per cent of IT organisations are reporting to the CEO, adds the agency’s report.

“This high level of reporting to the CFO, as well as their influence in technology investments demonstrates the need for companies to ensure that their CFO is educated on technology, and underscores just how critical it is that the CIO and CFO have a common understanding on how to leverage enterprise technology,” says John Van Decker, research vice president at Gartner.

CFOs are said to prefer IT systems that give them

competitive advantage. In the context, business intelligence has been steadily gaining importance in the eyes of CFOs. Enterprise applications such as ERP (enterprise resource planning) and CRM (customer relationship management) follow BI in the terms of priority. According to R Ramkumar, vice president of corporate marketing, research and communications of Cognizant, the trend has been happening for a while now. Every downturn brings along with it the need to cut costs and hence more offshoring. The natural tendency would be to go for much broader services from vendors on a global delivery model.

“Back in 2001-02, the focus was on improving efficiency. IT outsourcing service providers offered application maintenance and support. From 2002-07, effectiveness was demanded along with efficiency. That kicked off the need for ERP and CRM systems. Now, the need is for efficiency, effectiveness, innovation and growth. Customers would obviously want more for less,“ he says.