CFOs and other executives are in more control of IT purchases than ever, this according to recent research by Gartner, Inc., Financial Executives Research Foundation (FERF) and the Committee of Finance & IT (CFIT) of Financial Executives International (FEI).
The study reveals that CFOs have more influence than many would expect – authorizing 26% of all IT investments. Surprisingly, CIOs alone have authorized only five percent of IT investments, confirming what many IT sales and marketing professionals already know, that the vast majority of IT purchase approvals involve more stakeholders, as well as significant executive scrutiny. Since the bursting of the technology bubble in 2001, and reinforced by the Great Recession, CFOs have gained more organizational control over IT departments and decision making, driving more frugal / economic-focused IT purchase decisions – a condition we have coined “Frugalnomics.”
With the financial executive wielding so much approval power, savvy marketers and sales professionals must understand how CFOs view technology investment decisions, directly influencing, or empowering the champion with the right content to connect, engage and sell these economic-focused gatekeepers. This can help solution providers to “fight” Frugalnomics by facilitating the buyer’s journey and an ever more complex economic approval process.
What a CFO wants
CFOs are demanding of CIOs, indicating that they respect their technical skills, but want more project and financial accountability. When asked how to ensure that the relationship between the business and IT is successful and effective, financial executives indicated they would like to see:
- Clear ownership of the project (38%)
- The business case for the project (37%)
- Project management (36%)
CFOs are more focused on IT investment success than technology proficiency, highlighting a significant gap in confidence. In fact, the survey revealed that 70% of CFOs do not believe that IT is currently providing business benefits, and only 32% of CFOs said they see the CIO as a strategic partner.
This “crisis in CIO confidence” presents an opportunity for solution providers to help CIOs be more successful with CFOs by collaborating / delivering the business case / ROI for each proposal, and helping reduce project management risks.
To this end, we recommend the following best practices:
- CIOs need to be armed with content to help facilitate the complex change management process, which is now the buyer’s journey. Marketers and sales professionals can help arm the CIO for success, providing content to help them sell to executives and business stakeholders.
- With more executives doing their own online research, it is vital to have content to connect and engage CFOs directly, proving that the proposed solutions have quantified benefits, a business case with significant ROI, fast payback and minimal project management risks.
The bottom line
Frugalnomics is in full effect, with CFOs and other business executives exerting more control than ever over IT decisions. IT solution providers know that to be successful they must “fight” Frugalnomics with content to help facilitate the ever more complex buyer’s journey.
Saavy marketers and sales professionals will recognize the continued power shift towards more economic-focused buyers, developing and delivering the right content to empower CIOs / champions to communicate that there is a cost of doing nothing, and quantifying the value of change. This will include working with CIOs to develop tangible business cases to convince CFOs and other stakeholders that the proposed project can deliver significant benefits and ROI, with minimal risks.
As well, empowered executives are using the Internet and social media to do more research and facilitate buying decisions. Therefore, marketers should deliver resources to help CFOs and other stakeholders uncover and prioritize opportunities, make the case for change and prove that the technical team is making the most prudent choices.
Sources:
- CFOs’ Priorities for Technology Identified in the 2011 Gartner FEI Technology Study
- Gartner On Demand webinar >”Exploring CFO Priorities for 2011″
- The 3rd annual survey of CFOs is designed to gather perceptions from financial executives about technology, key trends and planned improvements to operations. The Gartner/FERF technology study, conducted from October 2010 through January 2011, included 344 respondents who were qualified in providing a perspective on technology deployment within the enterprise. Sixty-six percent of the respondents were CFOs, nine percent were business unit CFOs, and 95 percent could be considered senior financial executives.