CFOs push top execs for more information on IT projects

The US financial reporting regulations that were made law last year are spurring some chief financial officers to demand that...

The US financial reporting regulations that were made law last year are spurring some chief financial officers to demand that chief information officers provide them with more detailed information about the status of IT projects.

The Sarbanes-Oxley Act, which is aimed at producing more complete and accurate assessments of the financial condition of public companies, requires businesses to disclose "all material off-balance-sheet transactions" that may affect their capital expenditures or other aspects of their finances.

Because IT spending accounts for more than half of all capital expenses at many companies, chief financial officers are pushing hard to ensure that they can update quarterly earnings reports with as much information as possible about ongoing IT projects, said business and technology executives.

"Without question, chief financial officers are going to place more pressure on everyone in the organisation because of Sarbanes-Oxley," said Paul McFeeters, chief financial officers at Kintana, a supplier of software for monitoring IT operations and automating tasks like project management.

Companies "cannot run off with multimillion-dollar IT projects without good visibility and controls", added McFeeters, who uses Kintana's digital dashboard software to keep track of internal IT projects.

He said senior executives are also requesting more thorough financial reports from corporate officers to satisfy a provision of Sarbanes-Oxley that requires chief executive officers and chief financial officers to attest to the accuracy of a company's financial data.

Steve McDowell, chief information officer at Holiday Retirement a private company which supplies housing for retired people, said he has talked with IT executives from public companies about Sarbanes-Oxley and they "are really afraid that it will dominate their projects and budgets for a while".

The push for chief information officers to deliver more comprehensive information about IT spending is a  growing trend, said Gartner analyst Jeremy Grigg. But he noted that the reporting demands being placed on chief information officers are not tied solely to Sarbanes-Oxley.

Increasing numbers of companies are taking a portfolio management approach to evaluating the returns being generated by their IT investments.

Steve Denny, chief information officer of  FreightPro, has delivered a formal report on the status of IT projects to the logistics provider's board of directors each quarter for the past three-and-a-half years.

The reports detail the anticipated cost, timeline and benefits of both new and existing projects, he said, adding that IT work typically accounts for the bulk of FreightPro's capital expenditures.

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