Why CFOs should play a bigger role in digital strategy

May 22, 2015, 2:52 PM UTC
contract Armin Harris. Kyle Bean for Fortune
Kyle Bean for Fortune

Most big companies have the will to invest in digital innovation, but C-level leadership hasn’t yet found the way to manage it effectively.

Two separate surveys, undertaken by management consulting firms KPMG and EY, underscore a disconnect between the priority information technology executives place on investments in business intelligence, analytics and the Internet of things—and the urgency with which their companies are moving.

For example, just 17% of almost 3,700 large-company CIOs surveyed by KPMG in collaboration with recruitment firm Harvey Nash thought they would do “much better” than their competitors in “managing digital disruption.” Two-thirds of the respondents, however, believed that this phenomenon will require a significant leadership change for their company over the next several years.

“Pressure to produce at an accelerated pace is felt across all vertical markets, and has direct ties to the talent war,” said Bob Miano, president and CEO of Harvey Nash USAPAC, commenting on the data. “The industry can’t produce talent fast enough. The pace will only continue to quicken, and the companies on track to win will secure and hold on to talent, be nimble enough to shift quickly, and will reign in digital to manage it in smart way.”

Three quick survey stats to illustrate:

  1. The number of marketing teams that have exclusive control of digital strategies is shrinking; more are collaborating with IT teams.
  2. 17% of the surveyed CIOs are now working with a chief digital officer (CDO), compared with just 7% one year ago; another 5% plan a CDO hire within “several months.”
  3. More CIOs (50%) are seeking outside talent to supplement skills rather than simply to save money; the top priority centered on business intelligence and analytics.

That last point dovetails with the key finding of the much smaller EY study: many CFOs still tend to view information technology as a cost center.

Slightly more than one-third of the 650-plus surveyed CFOs pointed to managing technology costs as the top concern of their relationship with their CIO. Building the business case for new initiatives ranked third, although it wasn’t all that far behind, relatively speaking.

“What most firms are still lacking is a good digital strategy,” noted David Ryerkerk, EY’s global IT advisory leader, commenting on the data. “The firms that are struggling with this most are those who see it as predominantly an IT issue, as opposed to a larger, business one.”

One thing winning over CFOs: they realize that improved analytics and data management practices are vitally important for future decision-making. At least half of those surveyed are being consulted on corporate strategy for these technology investments, but that number still needs to grow.

“There’s a huge opportunity for CFOs to be a champion for advancing the analytics agenda—not only within finance but also, given how CFOs are involve in other parts of the organization, for embedding it across the firm,” said Chris Mazzei, EY’s global chief analytics officer.

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