Computerworld — At a time when automation of business processes was the biggest fad among large enterprises, it was natural for CIOs to report to CFOs because such transformations occurred mostly in the areas of finance, such as in deploying accounting packages.

Why Is the CFO Still Boss of IT?

As businesses expanded-- and as technological innovation became more fast-paced--IT deployments have gone out from the old setup and spilled over to influence the way entire organizations carry out their work.

A recent Gartner survey, however, reveals that more and more IT organizations are finding themselves easing back into the old setup, especially due to the recent financial crisis and the fact that higher-ups are still stuck in the IT-as-a-cost-center conundrum.

In the survey of over 480 senior finance managers, 42% of IT organizations are already reporting to the CFO, while a staggering 53% prefer to move to this setup.

Gartner's survey talked with finance controllers across the globe. Computerworld Philippines ran its own survey, asking local CIOs about reporting setups in their own companies. Of those surveyed, only 25% said they report to the CFO, while 65% report to their respective CEOs.

Of those CIOs who report to their CFOs, 80% said the setup has been beneficial to their company, while the remaining 20% said otherwise.

Surprisingly, all of those who responded that they are not currently reporting to the CFO said their IT organizations are better off under the CFO.

"Where the CIO should report is a question as old as the CIO role itself," said John Van Decker, research vice president at Gartner. "CFO reporting can lead to success if the CFO has a deep understanding of IT's value."

CULTIVATING CFO-CIO RELATIONSHIP

Therein lays the effectiveness of this setup: CFOs who appreciate the work of IT understand the intricacies of the department's cost requirements, and would generally vote in favor of IT investment.

This, however, is hardly the case in reality, according to Mayi Valdes, director of operations at Encash, an independent deployer of ATM machines. "CFOs tend to look at the cost of IT projects--and will advocate evaluations looking for the most 'cost-effective' (or cheapest) solutions," he relates, adding that this strategy has been proven, time and again, to be ineffective.

In the Gartner report, analysts said CIOs should invest on a CFO-CIO relationship, and that they "must understand the impact their CFOs have on technology decisions in their organizations and ensure that they are providing the CFO with the appropriate understanding of technology."

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