A combination of frothy "“next-generation disruptive technology initiatives” and major ERP reimplementation and migration projects are most likely to face the wrath of Chief Financial Officers (CFOs) unless they can demonstrate real ROI, according to a new survey of 1,500 CFOs and senior financial leaders.
That's according to a report by Rimini Street published this week, which nonetheless suggests digital investments and transformation are firmly among the top priorities of these 'keepers of coin', with a sweeping majority (95%) agreeing that that technology investments are key to recovering from the business impacts of the pandemic.
Perhaps unsurprisingly, CFOs expect their CIOs to present technology investment proposals that demonstrate business value and strong ROI, the report found, with “optimising existing technology investments” topping the list of CFO desires with 44% of survey respondents. CFOs also cited “revenue-generating technology initiatives” (40%) and “process improvements and employee efficiency” (39%) as their second and third choices respectively.
Former Federal CIO Jim Gfrerer managed a $4 billion IT budget. Here are his tips on "stewarding taxpayer's dollars"
Perhaps one for CIOs to be most aware of was the finding that 70% of CFO respondents say they want to cut spending on non-essential IT investments. When asked about the type of IT projects they personally prefer to cancel when they don’t see clear business value or strong ROI, the areas most likely to see the axe wielded were fluffy "next-gen" initiatives” and unwieldy, expensive ERP migrations. (Needless to say, Rimini Street has skin in this particular game, but with solid sample size, the report deserves some attention...)
The survey comes six months after Gartner,'s own conversations with 175 CFOs emphasised a daunting list of digital priorities for 2021, from the implementation of advanced data analytics and RPA technologies, to accelerating digital skills among their teams. The survey also revealed that most CFOs were not confident in successfully meeting their highest priority digital objectives for the coming year.
“The COVID-19 pandemic has forced CFOs to abruptly assess both their organizations’ and functions’ current digital capabilities, and they have clearly found many areas lacking,” said Alexander Bant, chief of research in the Gartner Finance practice at the time. Investment appetite clearly remains to resolve these issues.
Meanwhile, in addition to providing a clear business case on new transformation projects, CFOs also expect the ROI on technology spending to be swift, with 46% of CFOs expecting to see ROI on their technology investment within two years, and the vast majority (82%) within 3-5 years, Rimini Street found.
Timing is also very important in terms of when the CIO should engage the CFO on a major new IT initiative. Most CFOs (88%) prefer that the CIO involves them before the business plan is fully crafted. In particular, 47% of CFO respondents would rather have the CIO engage as the business plan is being developed, and 41% want IT to partner with finance when the idea is fully formed but before the business plan is completed.