CIOs and CFOs - working better together to beat the recession

A good relation between IT and finance can help through the recession

IT leaders are having a greater influence over business decisions during this recession than in previous downturns, thanks to a better relationship with their colleagues in finance, according to research.

Chief information officers (CIOs) and chief financial officers (CFOs) are working better together, says the survey by the Economist Intelligence Unit (EIU).

"In contrast to the last major economic slowdown, IT appears to be surviving the crisis with confidence largely intact in many, if not most, companies," says the report, “Staying the Course? Technology Decision-Making in Turbulent Times.”

EIU global technology research director Denis McCauley said the influence that CIOs and other business leaders gained for the IT function in recent years is also surviving.

McCauley said he had expected to find a rise in friction between departments, and was surprised that this seems not to be the case.

"Our sense was that things would get dicier in budget discussions and that the influence gained by CIOs in recent years would be diluted by CFOs taking more control over spending decisions. However, this doesn't seem to have happened on the basis of the survey," he said.

The survey of 267 executives from around the world was supplemented with in-depth interviews of senior executives and independent experts.

When asked about the relationship between the CFO and CIO in their organisations, respondents were upbeat – nearly 60 per cent answered positively that communication and trust between CFOs and CIOs was strong, against just eight per cent disagreeing.

McCauley said the lack of friction between IT and finance reflects an acknowledgment of the critical role of technology in business.

"The CFO has a better sense today than 10 years ago of how reliant all of the company's core processes, especially the financial ones, are on IT," he said. " Although by the same token CFOs and CIOs don't all see eye-to-eye."

The EIU survey also provides insights into the effect of the recession on firms' approaches to technology spending. Nearly a third (32 per cent) of respondents said they were cutting spending selectively. But when asked about their intentions in the next year, the most popular responses - at 27 per cent each - were to invest in areas giving a competitive advantage or only in areas providing a clear return on investment.

"There seemed to be a greater acceptance of the need to increase the budget selectively in technology projects, than there seemed to be in other parts of the business. In the past year, everybody had been cutting," said McCauley.

But McCauley said he recently chaired a meeting of CIOs in London, where "a surprisingly large number" had seen their budgets increase over the past six months.

"There were some people there whose boards and executive committees were seeing the crisis as an opportunity to drive through some change initiatives," he said.

McCauley said the research highlighted how far IT has come in terms of its business influence since 2001.

"Then IT was seen as the source of the problem – and today companies are looking at it quite differently," he said.

But the downturn also presents an opportunity for CIOs and CFOs.

"[Look at] the amount of talent that is available, because so many people have been made redundant," said McCauley.

"CIOs were saying now is the time to bring the best staff we can to our company – because we do expect the talent shortages to reappear and reassert themselves later in the year."

Some 57 per cent of the survey respondents said they expect the recession to end in the second half of 2010, while 27 per cent said it would be in 2011 or beyond. Only nine per cent predict a pick-up before the end of 2009.

A separate survey of 900 CIOs by analyst Gartner also forecast that the downturn would end between the first and third quarters of 2010.