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How Big is IT for the CFO?

The CFO's role in terms of IT appears to be evolving.

Some might think the role of chief financial officer (CFO) is relatively self-explanatory. "The CFO deals with the financial aspect of a company," they might suggest. 

The issue is, when you actually evaluate what it means to be the head of a company's financial segment, it becomes

Some might think the role of chief financial officer (CFO) is relatively self-explanatory. "The CFO deals with the financial aspect of a company," they might suggest. 

The issue is, when you actually evaluate what it means to be the head of a company's financial segment, it becomes immediately apparent that there are a number of other things that fall under the umbrella. For instance, think about the CFO role as "leading everything related to the company's finances." Right away, this brings in marketing, account management, human resources and something that has become increasingly critical in recent years - information technology

In a recent blog post, CFO expert Samuel Dergel tackles the question of how important it is for finance chiefs to fully understand IT in relation to the company's financial operations. Clearly, it's important to have a good idea about the company's IT unit, but, in his article, Dergel asks John Kogan, CEO at Proformative, if it is necessary for the CFO to fully "master" the IT sphere. 

"Master IT? No," Kogan tells Dergel. "Truly understand how IT can be used within their organizations and across the enterprise? Yes! CFOs can't outsource their understanding of technology and its use within the enterprise. They need to embrace it in order to understand how it is being used and how it might be used to better advantage. Armed with such knowledge they can create a plan, with help from others in their organization as well as IT, and work to make whatever they do have better and more effective."

Still, others have gone so far as to suggest that the CFO could ultimately end up taking the lead on a company's IT operations, potentially usurping many of the responsibilities traditionally held by the CIO. CIO magazine, for instance, reported on a 2010 Gartner survey of nearly 500 senior finance managers, which indicated that more than 40 percent of IT functions report to the finance chief already, while more than 50 percent signaled a desire to move in that direction - if they had not already. 

CIO reports that the issue of CIO-CFO reporting has been around for a number of years, but trends are beginning to indicate that the CFO is quickly assuming more IT responsibility within the organization. 

Comments

Topic Expert
Barrett Peterson
Title: Manager, Accounting Standards,
Company: TTX
(Manager, Accounting Standards,, TTX) |

IT is critical for a CFO, as IT can both drive and enable all operations of the entity. Finance functions from compliance to analysis also need effective IT. Lack of IT insight compares to a doctor oblivious to blood pressure.

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