Growing pressure to improve Information Quality (IQ) has been driving CFOs and CIOs to collaborate more effectively, according to the Deloitte Survey, Do Executives Have The Right IQ?, which analysed the practices of more than 450 of the world’s leading organisations.

According to the survey 46% of CIOs are involved in developing business strategy, but 60% of CFOs participate in the development of information and technology strategies.

Only 18% of the Deloitte survey’s respondents agreed with the statement that “finance and IT are wholly independent groups that have an arm’s length relationship”.

In addition to organisations around the world, Deloitte surveyed 140 organisations in Australia and New Zealand, where 43% of respondents were executives at companies with more than $1 billion in annual revenue.

“Where CFOs and CIOs appeared to have the most in common, was where the CIO reported to the CFO,” says Thorsten Engel, the Deloitte partner leading the New Zealand research. “However this did not necessarily mean that all or any of the barriers to information quality were overcome.”

Half of the survey’s respondents cite disparate, non-integrated IT systems and variability of business processes as an acute problem and 40% agree finance and business units alike spend too much time developing special reports and analysis to supplement system-generated reports.

“Only one in ten organisations believe they have achieved satisfactory corporate information quality ‘achievers’,” says Engel. “The rest are still searching for the right information through their disparate IT systems or business processes and are also wrestling with multiple versions of the truth, information overload or irrelevant performance metrics.

“There is no single right answer for the roles and responsibilities of the CFO and CIO, however their collaboration is crucial to enhancing information quality and to driving business success.”

IQ Achievers
CFOs and CIOs in the “IQ achiever” group report that their management teams are better able to manage and proactively improve operations, implement and consolidate IT systems as well as deal with organisational change.

However, when compared with the US and Europe, New Zealand businesses are skeptical when it comes to translating their high “IQ” into share price and revenue growth.

“The findings do show that timely access to the right information, can contribute to the bottom line,” says Engel. “The majority of businesses are now starting to realise that information is a collective responsibility, and should not just be left up to IT.

“Today, the cornerstone criteria of Return on Investment (ROI) for IT spend is too narrow a mechanism for evaluating the success or otherwise of an IT initiative. Most businesses are failing to capitalise on the wealth of data they have. They struggle to create valuable corporate insight and to make effective decisions. Now more than ever before, Management must consider the need to reduce complexity. The challenge to reduce data sources and system variations and the challenge around letting go of legacy systems cannot be solved by the CIO alone.

“Conversely the CFO has a significant role to play around finding where poor information quality hurts the bottom-line, as well as helping the business better plan and budget, using actionable business insights,” adds Thorsten Engel.

Off the board
Structurally, culturally or capably, CIOs or Senior IT management are still noticeably absent from the board table. Only 46% of the survey respondents cited CIO or senior IT management involvement in business strategy development, whereas 60% of CFOs participated in IT strategic planning.

40% of respondents believe that their finance and information technology staff spend too much time developing special reports or doing analysis to supplement system generated reports.

Across Australia and New Zealand, 22% of respondents view their planning and budgeting information as “unrealistic and lacking relevance”, which compares to 34% of respondents in the global survey.

An overwhelming majority of respondents (82%) across Australia and New Zealand believe that timely access to better quality information would improve profitability and 86% say that it would reduce costs.

Improving information quality (IQ) is money well spent, but necessary budget remains elusive. Three quarters of respondents believe they can improve information quality for decision making purposes, even if it is just reducing the time mining data or reworking information.

Conclusively, the organisations that have better information quality (IQ) enjoy meaningful benefits in decisions making when compared to their peers.

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October 2006