CFOs To IT: Simplify, Simplify, Simplify

Most chief financial officers struggling with reducing the cost of their companies' general and administrative operations say controlling information technology complexity is a critical factor in their efforts, a survey released Tuesday showed.

Nearly 90 percent of CFOs who said they were behind the competition in reducing overhead cited "managing a patchwork of different systems" as their main IT challenge, the survey by management consulting firm Booz Allen Hamilton found. Among companies who described themselves as overhead-reduction leaders only 43 percent said IT complexity was a critical factor.

Booz Allen surveyed 156 CFOs worldwide to find current trends and best practices in the management of general and administrative functions, which are often referred to as "overhead." Those operations include human resources, finance and accounting, information technology, purchasing and procurement, facilities management and risk management.

Only 3 percent of the respondents felt they had reduced overhead costs by as much as possible.

A clear majority -- 85 percent -- said cost reduction is still the highest priority challenge they confront. Nearly 60 percent of CFOs are focused on managing overhead by reducing non-essential spending, by restructuring costs and by standardizing the levels of service they provide.

Forty-five percent of the respondents said they were working with business units - the "customers" for overhead services - to find ways to manage and reduce their demands for these services.

"Despite the fiscal discipline most companies imposed during the recession, overhead costs are still a target for even greater savings," Booz Allen Vice President Vinay Couto said in a statement. "The quick fixes have been used up, and companies need to find innovative ways to control costs."

Sending business processes to low-wage countries with lower service costs was met with skepticism among many of the CFOs. The most common concerns were the risks to service quality (37 percent), doubts that claimed savings would materialize (31 percent), and concerns about disruptions to operations (23 percent).

Fifty-three percent of the CFOs considered those hurdles highly significant, but when asked what functions they would likely or very likely send offshore, IT headed the list among 43 percent of the execs, followed by finance, 22 percent, and purchasing, 19 percent.