The survey results are detailed in a report called Technology Issues for Financial Executives, which is jointly sponsored by CSC and the Financial Executives Research Foundation, the research arm of Financial Executives International (FEI). FEI is an organization for North American financial executives that spans all industries and company sizes, including about 90% of the Fortune 1000. The survey gathered responses from 518 financial executives — 85% of them the senior financial executives in their companies.

The most pressing IT issues for respondents revolve around determining how much money to spend on IT. "Financial executives are most concerned with capital rationing decisions," says Jerry Boltin, senior partner in CSC’s Consulting Group, who managed the survey for CSC. A total of 62% of respondents said that prioritizing technology investments — deciding which IT projects merit funding — was a "very critical" IT issue; 61% said that identifying the appropriate level of technology investment — versus other capital expenditures such as building a factory, for instance — was very critical.

Although such an emphasis on financial issues may be expected from financial executives, the survey shows that the capital rationing decisions have become even more critical in the current economy. Just 48% of IT executives in 2000 found prioritizing technology investments very critical, and 56% found identifying the appropriate levels of investment very critical.

The financial pressures have also led to an increased number of respondents saying that they have reduced their spending levels over the past three years. Nineteen percent of respondents — or nearly three times as many respondents as 2000 — say that their companies have lowered IT spending as a percentage of revenue. However, 35% of respondents say that their company has increased IT spending, while 46% say that spending has remained about the same.

What’s in, what’s out

When financial executives were questioned about the importance of particular types of technology, the majority of respondents singled out analytical and business intelligence software as a critical concern. "CFOs need information to make the decision-making process more effective," Boltin says. Business intelligence was the area in which most respondents said their businesses are constrained by lack of technology, followed by measuring product and customer profitability — both areas that hinge upon analytical capability.

Accordingly, 58% of respondents said that they plan to upgrade their analytical and decision-support capabilities in the next year. The primary areas of business intelligence investment to be upgraded in the next year will be performance measurement (57%) and data warehouses (52%).

Another concern of financial executives is data security. Identifying the appropriate level of security for information and electronic applications is a very critical concern to 58% of respondents.

IT services continue to be an important area of focus for financial executives. The survey found that 18% of the respondents currently outsource their IT, with an additional 6% planning to outsource within a year. Two-thirds of those who outsourced say they did so because IT is not a core competence and in-house costs are too high. The survey found that companies with more than $5 billion in revenue are much more likely to outsource IT functions, while small companies are more likely to outsource payroll.

E-commerce, the most critical IT issue for respondents in 2000, has dropped substantially in importance in the 2002 survey. Just 27% of respondents deemed determining appropriate use of e-commerce as very critical, compared to 58% in 2000. It’s not likely that the business world is retreating from e-commerce, however. "Many e-related activities have become so ingrained in basic corporate operations that they are no longer considered distinct e-commerce investments," the report says. There is an increase in the number of respondents who say that they are involved in e-commerce projects, up from 60% in 2001 to 68% in 2002.

Guidance for CFOs and CIOs

The survey, in its fifth year, can benefit both the FEI’s 15,000 financial executive members as well as CSC’s IT executive customers. For senior financial executives such as CFOs, the survey provides guidance about the priorities of peers and competition, which can be used to craft IT and business strategy. The survey also helps CSC business units better understand the perspectives of financial executives who make technology decisions and craft offerings that will meet those executives’ needs.

The report is useful to senior IT executives because IT departments frequently report to financial departments. The survey found that the majority of businesses with less than $1 billion a year in revenues have an IS-to-finance reporting relationship. So any IT project a CIO proposes must go through a financial executive first. "It’s important for the CIO to know what CFOs are thinking because any project that he wants to get funded has to go through that door," Boltin says.

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