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Top-Level Executive Support Key for IT Investments Such as ERP

A recent study by Gartner and the Financial Executives Research Foundation indicates that chief financial officers are becoming increasingly influential in the decisions regarding technology investments for many organizations. The study shows that the CFO's role in technology decision making has increased in the last year, with 44 percent of CFOs stating that their influence over IT investment has increased since 2010.

"The CFO and CIO are well-positioned to work together at generating business value from enterprise IT investments. However, this performance is often not achieved because of poor perceptions of IT, a parochial CFO or CIO perspective, or simply a failure to invest in the CFO-CIO relationship," said John Van Decker, research vice president at Gartner. "This year's results show that, in most organizations, the CFO and CIO work together to finance IT and provide information that supports enterprise processes. But there is also an opportunity for them to form a powerful alliance that generates more value for the enterprise.”

While CFOs don't strictly decide who receives funding within an organization, they are powerful influencers and strict enforcers of policies and decisions. Further, CFOs often have greater access to, and involvement with, senior business governance groups, and usually have strong influence and credibility with the CEO and board.

International management consultant James Robertson ups the ante by stating flatly that CEOs should be responsible as enterprise “custodians of ERP.” “Fundamentally the CEO is the custodian of the integrated view of the business,” says Robertson. “It is one of the principal functions of the CEO: get all the divisions and functions of the business to pull together coherently. Inherently, only the CEO can be the custodian of the ERP or the data warehouse and business intelligence systems. There is no practical alternative. I have repeatedly seen sub-optimal ERP implementations … where the lack of CEO custody is a significant and frequently dominant factor in an unsatisfactory situation.”

This is a clear departure from where we were as little as three years ago, when a blog on cio.com pointed the finger at ERP as the reason CFOs and CEOs dislike IT. What goes around comes around.

As the Gartner report notes, enterprise organizations are being challenged to adapt as technologies intersect (e.g., social, mobile, cloud, information) and the data that result from their adoption and deployment (within and beyond the enterprise) expand exponentially.

In this environment, ERP remains a core tool for leveraging data, one that CEOs and CFOs as well as CIOs must attend to. We are seeing this in increased executive participation, from funding to implementation to ongoing operation and maintenance.

Posted by the Epicor Social Media Team

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