Chief financial officers (CFO) realize the benefits of their companies’ digital transformation and would totally back any proposed investments. This is one of the major findings of Rimini Street’s recent global survey of more than 1,500 CFOs and senior finance leaders across 13 markets covering most industries.
Rimini Street is a global provider of enterprise software products and services, the leading third-party support provider for Oracle and SAP software products, and a Salesforce partner.
The report finds that 80% of CFOs globally said digital transformation is within the Top 5 of their list of priorities and 59% cite it is actually in their top three priorities. About 71% of the respondents surveyed believe digital transformation investments are key to their company’s success.
Manufacturing CIOs: 3 strategies to face 2021 like a superhero
Rimini Street now an approved supplier on New Zealand Government Marketplace
The COVID-19 pandemic is among the factors organizations accelerated their digital transformation with 73% CFOs indicated the global health crisis increased their investments, and the vast majority of survey respondents (95%) agree that technology investments are key to recovering from the business impacts of the pandemic.
CIO x CFO
Chief information officers found an ally with 77% of CFOs surveyed said they would help the CIO find a way to fund a new digital transformation project if the initiative delivered a strong return on investment (ROI). Of the 80% of CFOs who expect their technology spending to increase in 2021, 46% say this growth in spending is being driven by new digital transformation investments.
While CFOs would totally support any type of spending on digital transformation, the survey found 67% of respondents say they “refuse to waste precious dollars on IT investments that don’t move the needle.”
“This report highlights the heightened importance of digital transformation for CFOs but reinforces that IT investments must have clear business value to receive CFO support,” said Seth Ravin, CEO, Rimini Street. “It’s not surprising that CFOs want to cancel IT projects that lack a strong ROI, like many software vendor-forced ERP reimplementations and migrations, given that resources can be liberated for new technology investments that accelerate achieving the businesses digital goals.”
CFOs expect their CIOs to present technology investment proposals that demonstrate business value and strong ROI. When asked about the type of IT projects they personally want to see more of from their CIO because they see the clear business value and strong ROI, “optimizing existing technology investments” topped the list with 44% of survey respondents. CFOs also cited “revenue-generating technology initiatives” (40%) and “process improvements and employee efficiency” (39%) as their second and third choices, respectively.
Return on investments
CIOs that continually optimize their IT operations are in a strong position to create and secure new funding for strategic IT investments that are aligned with business priorities. As a result, IT resources, including time, money, and personnel, can be reallocated to critical new revenue-generating initiatives that create competitive advantage and growth for their organization.
One of the CFOs’ primary considerations for IT spending is prioritizing those projects that yield positive business outcomes — 70% of respondents say they want to cut spending on non-essential IT investments. When asked about the type of IT projects they personally prefer to cancel when they don’t see the clear business value or strong ROI, responses included “next-generation disruptive technology initiatives” and “major ERP reimplementation and migration projects.” When there is not a strong ROI, technology for technology’s sake or forced by major ERP vendors does not satisfy CFOs that want to see strong business value for IT investments.
Large technology investments that may not have a clear business case, such as some vendor-forced ERP migrations and upgrades, may be better deferred or avoided and instead, ERP systems can be optimized through strategies like third-party support, enabling the CIO to free up IT resources to help accelerate digital transformation programs.
The report is based on a global online survey conducted by Dimensional Research and sponsored by Rimini Street. More than 1,500 CFOs or equivalent top finance professionals from 13 countries, representing companies with at least $200 million (US$) in annual revenue, participated in the survey.