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CFOs Getting More Involved in IT Purchasing

February 11, 2009
For those of you who regularly sell to CIOs, I read an article in The McKinsey Quarterly today that predicts a growing convergence of IT and corporate finance--which means that if you sell to CIOs, you might have to add the CFO to your list of executives you need to reach.



Or, at the very least, you need to arm your CIO with information they can provide to their CFO that outlines the value equation of the IT investment you want them to make.



Here is an excerpt:



"The year 2009 will be a tipping point for the CFO's involvement with IT. Large businesses have hundreds of millions or even billions of dollars locked up in their IT organizations—including data center facilities, systems assets, and organizational capabilities built over time. In a world where capital is at a premium, CFOs will seek to use IT assets as a lever to generate cash...Successful CIOs will give the senior-management team practical ideas on how to optimize cash...In retailing, for example, a CFO knows with some precision what an additional location will cost and how much revenue it is likely to generate. In contrast, an IT project’s total cost could be off by an entire order of magnitude and its value either minimal or game changing. Senior executives at some organizations that have used IT less successfully in the past will probably throw up their hands and shut off all discretionary IT projects for the duration of the downturn. Naturally, this situation will challenge CIOs. The most effective course will be to explain what it would take to improve the value equation for IT investments."

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Lee Demby

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Lee Demby