Thursday, May 16, 2013

When CIO Reports to CFO, Everyone Loses

VPs of Administration and Finance represent the interests of that business vertical. They are also strongly partial to the systems used by that business vertical. Within a medical university, they cannot be expected to also represent marketing; advancement; communications; business development; client relations; disease control; provost; faculty; student life; or other departments. Think about your enterprise: How can the person overseeing finance be impartial or well-informed across all your departments?

Under many organizations' reporting structures, the CIO is expected to develop relationships with these other business verticals, but since they report to the CFO they are excluded from the cabinet meetings where leaders congregate. Even when CIOs are invited, they are not considered of equal rank -- because they are not. Everyone views the CFO as the final authority for IT decisions, leading to some serious problems.

First, finance drives strategy instead of strategy driving finance. IT is seen as a cost center and there is a perennial pressure to cut costs and reduce expenditures -- often at the detriment of strategy. Setting appropriate salaries for CIOs and people reporting to the CIOs becomes impossible.

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