The Cloud and the Balance Between CFO and CIO/CTO

One of the most interesting aspects of the rise of cloud the past few years is the balance between the CFO and CIO (or CTO). Over the past few decades, companies have seen the cost of IT grow. This has sometimes occurred out of control for some companies with ever demanding IT budgets and loosely defined returns. IT departments often request more resources to maintain what is often seen as the status quo or unknown risks. Depreciation charts for IT assets never seem to follow the norms. This makes budgeting, especially in small and mid-sized companies, difficult for the CFO/controller/finance department.

On the other side, the CIO and IT department receive the constant flow of user needs (technical and educational), hardware/software patches and updates, and the changing needs of the overall business. There are always changing variables of the IT department. For example, the iPhone has placed additional needs on corporate IT and came out of nowhere in the past 5 years. A survey in November 2011 showed that 45% of workers now used iPhones with Blackberry accounting for only 32.2%. This is a device that was unknown 6 years ago. Yet, IT departments have had to adapt from a security, support, and risk perspective – often without any formal corporate initiative or budget. This provides minimal time for the constructive innovation and makes deliverables difficult.

Cloud computing and the outsourcing of IT infrastructure have been catalysts in opening the discussion between CIO and CFO.  The open discussion between the CIO and CFO is needed and well past its time. CFO.com features three articles on the front page around the topic, all of which are part of their sub-topic on “The Cloud”. CFOs are being educated on the opportunities and risks associated with IT. CIOs are being provided options with controllable and scalable costs – from pay-per-hour to managed services to reduce risk and increase IT departments innovation.