What Do CFOs Worry About? Information
When CFOs think about technology, they worry most about how to secure information and how to analyze it for business performance, a new survey coauthored by CSC says.
Information security emerged as the most pervasive concern among the roughly 700 executives participating in the eighth annual Technology Issues for Financial Executives survey. [Download full survey.] The survey, conducted by CSC and Financial Executives International (FEI), a professional organization for senior financial executives, also found that most organizations lack a written IT strategy.
While no single technology issue showed up as the primary focus of the respondents, information security was the most frequently cited response to a number of questions about CFOs’ critical technology concerns. Only about one in five CFOs, for instance, is "highly satisfied" with his organization’s security program. "This isn’t a surprise when you consider the potential for business interruption and negative market consequences if confidential information is compromised," says Jerry Boltin, a senior partner and the Business Intelligence practice leader in CSC’s Consulting Group. He notes that about one in 10 respondents reported a major business interruption as the result of cyber intrusion.
Financial executives have big plans to improve their analytical environments, which provide information that will help run the business better. Most respondents feel they have insufficient analytical tools, and 64 percent of respondents say they will invest in analytics in the coming year. Those investments could be large. Medium-sized to very large companies plan to spend between $1 million and $15 million each, while the largest planned expenditure will be about $100 million.
 Boltin says that CFOs have a built-in reason to demand more analytics: They are the people who are asked the questions that require analytics to answer. "The person who has primary responsibility for the organization’s analytical information is almost always the CFO," Boltin says.
Organizations boosting their analytical strength will often invest to improve planning accuracy and measure business performance. The two areas most in need of upgrades, according to the survey, are management dashboards and planning, budgeting and forecasting tools.
In a finding consistent with previous years’ reports, roughly 60 percent of respondents say they lack a written IT plan, despite the big technology investments their organizations are making. This may help explain the wide variability in project success rates and return on investment.
While a number of respondents reported IT project success rates of more than 90 percent, a substantial number also reported success rates below 50 percent. Overall, senior management views about one in three technology investments as unsuccessful. "They know that they have to continually invest to improve their IT environment, they just wish they were better at it," Boltin says.
The survey also found that overall IT spending is again expected to increase modestly in the next year, and companies plan to expand their use of outsourcing or shared services arrangements. One of the main drivers for increased outsourcing is the positive ratings it gets; about 90 percent of respondents rate their outsourcing arrangements as successful.
 All forms of outsourcing will grow, with IT and human resources as the areas with the most planned outsourcing activity. Approximately seven percent of respondents plan to outsource some portion of their IT in the next year, while about six percent plan to outsource some portion of their human resources.
The survey shows a lower level of satisfaction for respondents who outsource functions to an offshore vendor and who have a direct relationship with their offshore provider. While 68 percent of respondents are satisfied or highly satisfied with their offshore providers, that figure is 15 percentage points lower than the satisfaction rate for traditional outsourcing providers. Less than 10 percent of respondents plan to increase offshore usage or begin new offshore relationships.
The survey examined other issues, including financial management, IT strategies, use of technology applications and managing the IT function. Other topics explored include measuring return on technology investments, identifying the implications of Sarbanes-Oxley compliance and assessing the effectiveness of ERP implementations.
The study was carried out by CSC, the FEI’s Committee on Finance & Information Technology, and the Financial Executive Research Foundation, the research affiliate of the FEI. The survey included 708 responses, with demographics that match that of the FEI membership in terms of industry, company size and location. Only the responses from the most senior FEI member in a financial officer role in each entity were included.
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