CFOs strengthen role in IT budget decisions amidst rising costs

A recent survey conducted by Censuswide and sponsored by Rimini Street has revealed significant insights into the collaborative dynamics between Chief Financial Officers (CFOs) and Chief Information Officers (CIOs). The survey engaged nearly 3,000 CFOs and CIOs globally, focusing on the growing influence of CFOs on IT investments and decisions amidst rising technology costs.

As IT expenses increase, the data underscores that CFOs are playing a more integral role in the management of technology budgets and decisions. A notable 86% of both CFOs and CIOs reported a strengthening of their relationship. Additionally, the survey highlighted that 72% of CFO respondents are now taking the lead in setting technology budget levels, while nearly 41% of CIOs acknowledged their CFO counterparts make key technology decisions.

The findings suggest that such close collaboration between CFOs and CIOs can lead to improved business outcomes. According to the survey, 49% of CFO respondents believed that a positive CFO/CIO relationship was a driving factor behind better business results. Rimini Street's CIO, Gertrude Van Horn, commented, "Working closely with the CFO in strategic alignment and in the early stages of planning helps technology teams make smart decisions that are in line with both the corporate vision and budgetary goals for the business." She added, "It's the partnership that drives favourable outcomes for the company, and we lean heavily into this relationship to ensure we are identifying ways to achieve greater profitability while freeing funds for innovation."

The survey also identified key areas of focus for CIOs in responding to rising IT costs. CIOs are actively investing in emerging technologies, with 44% targeting this area, and 36% looking to outsource application support. A significant portion of these investments is directed towards artificial intelligence (AI). An overwhelming 87% of CIOs agreed that historical data is crucial for maximising the value of AI projects related to Enterprise Resource Planning (ERP). However, 94% stated that their data required substantial or moderate clean-up to ensure the success of these AI initiatives.

In their efforts to improve cost predictability, CIOs noted several benefits of outsourcing IT services. These include support for application customisations (33%), broader service and support solutions (33%), better quality of service and support (32%), and faster resolutions (30%). Moreover, 26% of the surveyed CIOs reported that outsourcing had enabled them to lower costs, addressing the loss of IT talent and ensuring support for ongoing operations.

The survey further revealed that not all technology initiatives are delivering the expected value for businesses, with ERP upgrades or migrations identified as the least valuable by 23% of the CFOs. On the contrary, investments in security (28%), emerging technologies such as AI, business intelligence and data analytics (27%), and customer-facing SaaS technologies (27%) were deemed as high-value areas for businesses.

Despite these findings, only 20% of the CFOs surveyed expressed satisfaction with the outcomes of their technology investments. Negative impacts cited included increased ongoing costs, limited future flexibility, and organisational or business disruption. As a result, CIOs are encouraged to carefully consider both the short and long-term implications of their technology strategies.

Michael Perica, CFO at Rimini Street, emphasised the importance of achieving value from substantial ERP investments. "Thousands of clients of Rimini Street who have taken the lead in maximising the value of their substantial ERP investments also benefit from the flexibility and freedom to innovate with best-fit solutions for their needs, on their own timeline," he said. Perica highlighted the financial benefits achieved, adding, "It's not just about the USD $8 billion we've saved our clients to date, we've helped them reallocate their people, time and money towards strategic initiatives and innovations that accelerate growth profitability for the business."