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Conflict In The C-Suite: Who Decides When To Spend Money To Make Money?

The CEO wins the battle and the CIO wins the war.

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The CEO wins the battle and the CIO wins the war.

Opinions

Conflict In The C-Suite: Who Decides When To Spend Money To Make Money?

The CEO wins the battle and the CIO wins the war.

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When the Covid 19 pandemic began in March 2020, the reaction from most businesses was decisive and swift. The need for entire workforces to work from home and for businesses to close their doors increased the intense pressure for organisations to digitally transform.

Large portions of IT budgets were channelled towards short-term urgent projects. Business leaders were united in their sense of immense responsibility to maintain operations and insulate their organisations from physical and financial disruption. In many cases, longer-term strategic investments were paused.

However, quickly following that initial leadership unity, what large numbers of businesses have since experienced is an ongoing internal power struggle between the CEO, the CFO and the CIO; the former wanting to prioritise getting the business back to growth, the CFO more cautiously wanting to conserve budgets and pull back from hefty capital expenditure focussed investments while the CIO sees worthwhile opportunities for long term spending on technology.

With uncertainty rife and so many businesses under huge duress, the CFO’s conservative perspective, in the majority of cases, came to the forefront and dominated the IT spending agenda. However as we head into 2022 that tide is turning rapidly.

Power struggles for spending priorities

Despite reservations brought by new variants of Covid 19, in general, the business environment is much more positive. Leadership teams crave more flexibility in their IT infrastructure to be able to react quickly to new opportunities to gain competitive advantage and not be hamstrung by legacy systems.

The pressure on business leadership has now switched to a focus on agility: both in terms of the infrastructure which supports the entire business as well as using data to derive strategic insight and business intelligence. 83% of respondents in our recent survey deemed this approach essential for achieving innovation and growth.

The power struggle between the CEO and CFO is now much more finely balanced, with the CEO’s growth perspective now driving the conversation. In addition, the importance of the CIO’s role is widely understood and respected.

Their knowledge has proved vital in maintaining business operations during a pandemic and CIOs find themselves in a position to advise the wider board about worthwhile technology investments which will enable the business as it matures and grows.

According to recent research from ESG (2022 Technology Spending Intentions Survey), the top three factors for justifying IT investment were strengthening cyber security (38%); improving data analytics for real-time business intelligence and customer insight (33%), and improving customer experience (30%). This demonstrates how important and high profile, making the right IT investment has become.

Get it wrong and a business could suffer dire consequences from ransomware attacks, not properly responding to customer needs and not making the most of company data. The survey highlighted how important improving the customer experience was as a direct link between investment and projects which help to grow a business.

Making growth-focused IT investment

With companies now adamant not to lose any momentum, they need IT infrastructure which is as fast moving as it is reliable. But for business leaders it’s not really the technology itself but what it enables which is valuable.

Good tech investments are about enabling a business. Business and IT leaders want better results and faster, smoother performance from their IT. They don’t want to worry about the infrastructure or hardware needed to achieve this – they just want the polished, seamless end result which enables a growth trajectory.

Meanwhile, investments in subscription and as-a-service models aid the CFO in their need for financial stability. They allow them to predict their outgoing revenue better as they are committed to smaller regular payments rather than large one off costs.

Sustaining the ‘invest to grow’ mindset

Leadership vision can be held back by infrastructure. In order to achieve the agility, customer focus and innovation businesses seek to prioritise, IT needs modern technology that provides a cloud operating model and can be consumed flexibly, scaling up and down as needed. The freedom afforded by this approach allows for more time and resources for growth focused investment.

As we go through 2022, organisations will make significant strides away from survival and into revival mode. They will increasingly move away from the CFO’s hesitant outlook and embrace the CIO’s strategic tech investment to meet the CEO’s growth plans. The old adage ‘you have to spend money to make money’ has never been truer.

James Petter is GM, International at Pure Storage.

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Conflict In The C-Suite: Who Decides When To Spend Money To Make Money?

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