Are CFOs, CMOs New Favourites Of CEOs?

by CXOtoday News Desk    Mar 24, 2015

CFO vs CMO

Technology is transforming businesses, impacting every key decision, irrespective of the size of business or department. The CXOs are making compelling propositions to increase their technology spends and are bullish about using technology in forward looking planning and decision making.

CFOs are emerging powerful in organizations because of their ability to directly link financial planning with company goals. Given their evolving roles, CEOs say they turn to CFOs most frequently for strategic advice (72%), followed closely by CMOs (63%), according to a recent survey conducted by IBM’s Institute for Business Value.

What makes CFOs and CMOs the favourites of CEOs is the fact that they understand technology and are in a better position to decide what is relevant for the organization and plan spends well. Gartner predicts that some CMOs will spend more on IT than their companies’ CIOs by 2017.

Larry Tieman, a CTO for the last 20 years, in a commentary states: “As the CMO spends more money on customer- and product-focused IT projects, the CFO will want to cut the CIO’s budget. These will be difficult discussions for CIOs.”

As the technology evolves, the roles are being redefined. Teradata Applications CMO, Lisa Arthur, was quoted as saying that the CMO can’t be a  brand executive anymore, as he needs to be business executive which requires a healthy relationship with the CFO and CMO.

Technology preferences of CFO

According to a study — Global Business and Spending Monitor 2015 — by American Express, in partnership with CFO Research, CFOs are optimistic about the pace of economic growth and over 94 per cent are looking at increasing their spending and investment to drive their top-line, while others are optimistic about new acquisitions or business partnerships.

As per the American Express report, the ‘mobile first’ mindset in evident with over 7 in 10 executives saying the use of mobile technologies can significantly enhance customer service. There is a direct correlation between mobile and cloud. As rightly pointed by Otto Kroboth Palmer, Chief Financial Officer, Grupo Fármacos, in an Accenture report:  “It’s about moving information out of the office and on to the street. Without the cloud, mobile would be a difficult-to-manage platform and very inflexible,” he says. The finance leaders are laying emphasis on the need to leverage cloud computing solutions, in serving customers and adding value to their businesses with 44 pc saying that spending on cloud computing will form a critical component of their increased spending on technology. That is followed by enterprise level IT systems spending (41 per cent) and business intelligence and data analysis capabilities (34 per cent).

The Accenture report states that delivering insights and value to the business starts with establishing a common finance language.“Modern CFOs are focused on using data insights to understand changes in profitability across multiple, different dimensions of the business. To measure profitability consistently across all markets, products and geographies, you need to get the baseline right. That means establishing a common finance language that everyone speaks, from a standard reporting architecture and profitability measurement framework, to a common set of analytical tools and processes.”