The study also says that 42% of IT organizations directly report to the CFO, whereas 33% report to the CEO. These facts may mislead us to the conclusion that CIOs are losing control over IT.
I am yet to come across any organization where the CIO or the CFO alone is authorized to make IT investment decisions, especially in context of mid to large enterprises.
I am not too sure if the study conducted included only small scale organizations or mid to large enterprises.
Let us first understand the responsibility of the CIO to align IT with business. A business would always have some predefined mandates typically known as goals or objectives, which are set by the top management. A CIO is not responsible for setting business goals but is an integral part of the top management that jointly owns the responsibility of achieving these goals. Once the goals are set, the management looks at various initiatives to be performed in order to achieve them.
These initiatives may call for an investment in some cases. Thus, it is evident that any investment proposed by the CIO has to necessarily stem out from one of the strategic initiatives of the organization and must not simply be aimed at implementing a new technology.
Having established the process of originating a need for investment, let us now understand the process of investment approvals. If you look at the way an enterprise works, you will find that an organization with a reasonable size of operational maturity has a well-defined process in place for investments. It is not about authorizing CIOs or CFOs respectively but as an organization, any approval must be processed as per the authorization matrix. There exists a well-defined empowerment matrix in every mature organization.
In my experience, approving investment is a joint exercise between the CIO and the CFO. It is the role of CIO to provide business a competitive edge by suggesting breakthrough innovation which could be in the form of adoption of a new technology or application of existing technology in such a way that it creates a next practice.
The CIO is the only person in an organization who leads from the front when it comes to achieving business objectives through the use of technology and making sure that the organization stays ahead of competition in providing value to its customers.
A CIO does the technical evaluation and is the first person to be convinced of the return on investment before the case is presented to the management.
I am yet to see a case wherein a CIO would not have got the approvals from the management for IT enablement which helps an organization in achieving its strategic goals.
Are we saying that since the budget approvals are co-owned by the CFO and the CEO, thus the CIO is losing control over IT?
I definitely do not agree to this view. I do not want to question the authenticity of the study but would certainly be interested in knowing under what circumstances the CIO or the CFO alone are empowered to make investment decisions all by themselves. Let us not forget that it is not just about the signing of the investments by the CIO. It is about the CIO taking the sole responsibility of understanding technology trends and making use of the technology in providing a competitive edge to his organization.