What CFOs Need to Hear about Cloud Computing and Consumer IT

Cloud computing and consumerization of IT change how you buy and budget for technology. Here’s how to talk about it with the CFO.

The march of technology is starting to shake up one of the most important relationships that CIOs have—the one with the chief financial officer.

CIOs need to start changing the way they talk with CFOs, not just at budget time, but throughout the year, CIOs and experts say. Cloud computing and consumerization trends, especially, are changing the nature of corporate IT and, with it, the way CIOs structure their IT budgets.

This shift is in its early days, but forward-looking CIOs are beginning to think of themselves as providers of services rather than infrastructure. As such, they supervise operating expenditures, not capital expenditures, and they approach the CFO as partners, not supplicants, in business-investment decisions.

Robert Petrie, vice president of IT at Pharmaceutical Product Development, which runs clinical trials for big drug companies, says decisions about provisioning new technologies are made based on “what makes the most sense from a business standpoint and from a financial standpoint.” But thanks to cloud-based infrastructure, software as a service and employee-supplied devices, these decisions have different budget implications than they used to, including how IT investments are governed and who pays the bills.

Questions of Cash Flow

Cloud computing offers CIOs the opportunity to transform investments in corporate computer systems from capital expenditures into operating expenditures. Instead of making a multimillion-dollar up-front investment in software licenses and computer-room servers, companies can arrange to pay for the same capabilities with monthly per-user contracts. That means that when you want to deploy a new system, you have more funding options.

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