Rimini Street have published the “C-suite Imperatives: Evolving IT and Enterprise Investments” study (registration required). The report is based on a Global survey conducted by Censuswide Research of 2937 CFOs and CIOs around the world. While the study is comprehensive, Rimini Street did not break down the answers by industry or nationality.
The report looks at the relationship between key business leaders, specifically the CIO and CFO. It also sheds light on how investment decisions are made and the influence those strategies have on technology investment.
The main body of the report is divided into three sections, which contain data from the responses to the survey.
- Who’s in the Driver’s Seat for Technology Decisions?
- What’s Driving Tech Decisions for C-level Execs?
- A Drive Toward Business Results and Revenue
Each section highlights one of the key findings from the report, which is included in the executive summary at the start. However, there is much more depth to this report than just those three findings. Those key findings are:
- The CFO and CIO partnership continues to strengthen
- CIOs are focused on solving for rising IT costs
- Not all technology initiatives are delivering value for the business
Overall, the report is cleanly laid out with a mix of data visualisations and commentary that includes analysis. It does, however, lack a qualitative element and there are no quotes either from interviewees, Rimini Street executives or industry experts within the text.
Who’s in the Driver’s Seat for Technology Decisions?
The authors conclude that the CFO is taking a bigger interest in technology projects. It is not a surprise that 72% of CFOs are setting tech investment budget levels (CIOs 65%). However, 66% of CFOs are making the underlying technology decisions to achieve business results, with CIOs only 1% higher.
Underpinning this evolution is 86% of respondents seeing that the strength of the partnership has strengthened over time. Four major events are causing this:
- A focus on security, compliance, and risk (41%)
- The urgent need to collaborate to make nimble technology decisions (39%)
- A direct result of the other leader proactively engaging (37%)
- They had to quickly cut IT costs in a smart way (36%)
Neither CIOs nor CFOs can become complacent, though with the relationship worsening where there was:
- Lack of expertise to engage security, compliance, and risk issues (32%)
- No flexibility in identifying ways to cut costs (31%)
- Frustrating lack of urgency (30%)
What isn’t clear is who perceived these issues, the CIP or the CFO. There is a case for either. Where both agree is that when CIOs understand the business better, and CFOs understand tech better, the relationship improves. Where the relationship is stronger, the CIO is more confident in approaching the CFO for greater funds, especially where fund requests are specific and offer business value.
Gertrude Van Horn, Rimini Street, CIO, commented, “Working closely with the CFO in strategic alignment and in the early stages of planning helps technology teams make smart decisions that are in line with both the corporate vision and budgetary goals for the business. It’s the partnership that drives favourable outcomes for the company, and we lean heavily into this relationship to ensure we are identifying ways to achieve greater profitability while freeing funds for innovation.”
What’s Driving Tech Decisions for C-level Execs?
In the majority of cases, CIOs appear to be struggling to put the business value forward for technology investment. Only 20% of CFOs are happy with the impact that tech investments make on their business goals.
CIOs seem to be turning to emerging technology, though the numbers are surprisingly equal across the survey. The survey asked about six technologies: Cloud SaaS, Cloud IaaS, AI, Machine Learning, Predictive Analytics and Cybersecurity. The responses across all very similar:
- Already Investing (42%-49%)
- Will invest this year (35%-40%)
- Planning for it (12%-13%)
- No Plans (2%-5%)
Machine learning is perhaps the laggard of investment decisions, but the percentages are similar. The report also identified why CFOs and CIOs make investments. For CIOs the top three results were:
- To gain business flexibility (22%)
- Increase productivity/efficiency (21%)
- Support business growth (21%)
CFO’s top factors are more complex:
- Security (29%)
- Sustainability of the solution (29%)
- ROI (28%)
While AI is a hot topic now, 87% of CIOs agree that historical data is the secret sauce to getting maximum value out of AI projects. There is a problem. 94% say their data needs a substantial or moderate cleanup to succeed with AI.
The survey also takes a look at the transition from license to subscription models. With 47% of C-level execs saying they have converted (or are converting) from a license model to a subscription model for ERP. While at first glance this is seen as a positive move, most find it comes with increased up-front IT costs. Though the report does not explain what those are.
Challenges
Both CFOs and CIOs have concerns, though, chief among them are security and staffing. Security is top of mind for CFOs and staffing for CIOs, with almost half of them suffering from losing staff to higher paid jobs. Hiring and training budgets take resources from other budgets, which makes it harder to retain and recruit staff. The obvious choice is outsourcing, which Rimini Street is keen to point out with its portfolio of solutions.
Michael Perica, Rimini Street CFO, notes, “Thousands of clients of Rimini Street who have taken the lead in maximising the value of their substantial ERP investments also benefit from the flexibility and freedom to innovate with best-fit solutions for their needs, on their own timeline. It’s not just about the $8B we’ve saved our clients to date. We’ve helped them reallocate their people, time and money towards strategic initiatives and innovations that accelerate growth profitability for the business.”
A Drive Toward Business Results and Revenue
The top three IT initiatives that CFOs want CIOs to focus on are:
- Revenue-generating technology initiatives – 28%
- Risk Management and Compliance – 27%
- Next Generative disruptive technology initiatives – 25%
The first is familiar, but it would have been interesting to dive into why CFOs want disruptive tech and how they evaluate which tech and why they should invest. What was surprising was that CFOs are seeing the most value from security investment, though the report does not identify how they quantify that.
The good news for CIOs is that technology investment is increasing, according to 70% of CFOs. They also indicated how they plan to improve their business: Improve Profitability, Technology Improvements and Growth being the top three.
Enterprise Times: What does this mean
There are some fascinating statistics within this report, many of which leave questions unanswered. The good news is that CFO and CIOs are working better together. They appear to be learning how to work better with each other, though the report has no trend analysis.
Technology has become critical, especially in the age of AI, for business leaders, including CFOs. However, the concern that CIOs have about data is concerning and almost certainly true. It is an issue that many will need to resolve before the drive to implement AI becomes imperative. With faulty data, the AI will almost certainly produce faulty results, perhaps not immediately, but in time, without correction, it could make more mistakes than humans.
