The Power Struggle Between CFOs and CIOs Over AI Investments

Table of Contents

1. Key Highlights
2. Introduction
3. Divergent Perspectives on AI ROI
4. Who Owns AI Investments?
5. Collaboration: A Divided Opinion
6. The Demand for Tech-Savvy Finance Leaders
7. Building a Unified AI Strategy
8. The Future of CFO and CIO Dynamics
9. Conclusion
10. FAQ

Key Highlights

• A KPMG report reveals a significant divide between CFOs and CIOs regarding AI investments, with 39% of CFOs and 49% of CIOs disagreeing on how to define technology ROI.
• A majority of both CFOs (59%) and CIOs (61%) believe they hold primary responsibility over AI decisions, indicating a possible power struggle between these two critical leadership roles.
• Collaboration is seen differently: 57% of CFOs believe it enhances operational efficiency whereas only 37% of CIOs share this view, highlighting a disconnect in perspectives on teamwork.

Introduction

As organizations rush to implement artificial intelligence (AI) into their operations, two pivotal roles in the corporate structure have emerged at the forefront—the Chief Financial Officer (CFO) and the Chief Information Officer (CIO). Amid the growing reliance on AI technology to drive business success, a new report from KPMG has shed light on a burgeoning tension between these two executives. The survey, which includes insights from 102 CFOs and CIOs, uncovers differing viewpoints on responsibility and return on investment (ROI) related to AI. What is driving this tension, and how might it impact the implementation and effectiveness of AI across businesses? This article explores the rift between CFOs and CIOs, its historical context, potential implications, and real-world examples to illustrate the ongoing power dynamics.

Divergent Perspectives on AI ROI

The crux of the disagreement between CFOs and CIOs lies in their vastly different interpretations of the ROI associated with AI expenditures. According to KPMG's findings, 39% of CFOs and an even higher percentage of CIOs (49%) view the definition of technology ROI as a point of contention. For CFOs, who traditionally focus on financial metrics, AI investments should yield quantifiable savings or revenue. Conversely, CIOs emphasize intangible benefits like improved efficiency and enhanced strategic capabilities, leading to fundamental discord about what constitutes success in AI deployment.

Historical Context of CFO and CIO Roles

To understand the origins of this conflict, it is essential to look back at the evolution of these roles. Traditionally, the CFO is tasked with maintaining the financial health of an organization, overseeing budgets, and ensuring that every expenditure is justified. The role has grown to encompass strategic management, especially as companies seek to capitalize on technological advancements.

On the other hand, the CIO emerged with a primary focus on managing an organization’s IT infrastructure and spearheading innovative tech initiatives. This position has evolved to include a significant emphasis on digital transformation, with the CIO often at the helm of integrating AI technologies. As AI grows more prominent, the stakes for both roles increase, leading to friction over leadership responsibility.

Who Owns AI Investments?

The report indicates a remarkable overlap in the perceived ownership of AI investments, with 59% of CFOs and 61% of CIOs asserting that they are responsible for driving these initiatives. This shared claim not only complicates decision-making and accountability within organizations but also cultivates an environment ripe for conflict.

Marcus Murph, KPMG’s U.S. head of technology consulting, emphasizes the need for collaboration between CFOs and CIOs to align objectives and build a more cohesive vision for AI investments: “CFOs and CIOs need to collaborate to execute strategy and achieve goals."

Real-World Example: Collaboration Challenges

Kim Anstett, the CIO of Trellix, offers a case illustrating an approach to collaboration that could bridge the gap between these perspectives. Anstett actively engaged with various departments to outline potential uses for AI, generating a list of over 100 possibilities. However, the exercise also highlighted a need for prioritization and alignment with budget imperatives—a scenario likely to resonate with CFOs.

This example underscores the complex balancing act of managing costs while pioneering innovation. Despite efforts to cooperate, underlying structural tensions can hinder progress and drive disconnect at the C-suite level.

Collaboration: A Divided Opinion

A key finding from the KPMG report reveals a notable disparity in attitudes toward collaboration between these two roles. Around 57% of CFOs express confidence that collaboration is critical for improving operational efficiency, while only 37% of CIOs share this view. Moreover, more than half (51%) of CFOs assert that collaboration has substantial benefits for risk management, in stark contrast to a mere 29% of CIOs who hold this belief.

Implications of Divided Perspectives

This cultural clash has potentially significant implications for organizational effectiveness and AI strategy achievement. If the two leaders cannot align on metrics for success or cooperate on strategic initiatives, businesses risk falling short of leveraging AI for competitive advantage.

The ramifications can range from inefficient resource allocation to missed opportunities for cost savings, technology innovation, and improved customer experience. In industries where agility and responsiveness are crucial, this lack of cohesion could ultimately hinder performance.

The Demand for Tech-Savvy Finance Leaders

In response to these challenges, companies are increasingly prioritizing the hiring of tech-savvy finance professionals. Research by software firm Datarails indicates that in January 2025, 27% of job postings for CFO positions included AI proficiency as a key requirement. This trend underscores the recognition that AI and technology are now integral to the responsibilities of finance leaders.

As companies navigate this evolving landscape, an interdisciplinary understanding of both finance and technology will likely become a crucial attribute for successful CFOs. Organizations that can find leaders who bridge this gap may be better positioned to harness the power of AI effectively.

Building a Unified AI Strategy

The KPMG study also suggests actionable steps that can foster better collaboration between CFOs and CIOs:

1. Open Communication: Ensuring continuous dialogue between CFOs and CIOs can help bridge the gap in understanding and expectations.

2. Unified Strategy Development: Collaboratively developing a strategic framework for AI investment and focusing on shared goals helps prevent misunderstandings and conflicting priorities.

3. Clear ROI Metrics: Establishing a common understanding of how to measure ROI for AI investments will facilitate constructive evaluations of success.

4. Cross-Departmental Teams: Encouraging the formation of teams that include both financial and IT experts allows for diverse perspectives and innovative solutions.

By taking these steps, organizations can mitigate the risks associated with fragmented leadership and build a more resilient approach to AI investment.

The Future of CFO and CIO Dynamics

As AI technology continues to evolve, the roles of CFOs and CIOs will undoubtedly shift along with it. The power dynamics between these executives are likely to remain fluid, shaped by ongoing developments in AI and organizational strategies.

Some analysts predict that as the demand for technology-led solutions grows, CFOs may take on a more prominent role in AI investments, reflecting the extent to which organizations lean into digital transformations. Conversely, as CIOs increasingly work to refine their financial literacy and articulate the value of their initiatives, we may see a recalibration of these power structures.

Conclusion

The ongoing discussion about the roles of CFOs and CIOs in managing AI investments underscores a broader narrative about leadership in the digital age. As companies face heightened competition and evolving market dynamics, executives must address their divergent perspectives to drive meaningful change and enhance organizational performance.

Collaboration will be essential, but forging a path toward mutual understanding will require intentional efforts from both parties to create coherent strategies that leverage AI in beneficial ways. As the landscape of business intelligence continues to transform, the ability of CFOs and CIOs to collaborate effectively will define the success of AI implementations and overall corporate growth.

FAQ

Q1: What is causing the schism between CFOs and CIOs regarding AI investments?
A1: The disagreement stems primarily from differing evaluations of ROI, ownership of AI initiatives, and views on the importance of collaboration.

Q2: How can companies improve CFO and CIO collaboration?
A2: Companies can enhance collaboration by fostering open communication, developing a unified AI strategy, establishing clear ROI metrics, and creating cross-departmental teams.

Q3: Why is it important for CFOs to be tech-savvy in the context of AI?
A3: As AI becomes increasingly integral to business strategy, CFOs must understand technological implications to make informed decisions and champion effective resource allocation.

Q4: What steps do organizations need to take to ensure successful AI implementation?
A4: Organizations should focus on aligning objectives between CFOs and CIOs, defining ROI metrics clearly, and promoting ongoing collaboration across departments.

Q5: What are the potential outcomes if CFOs and CIOs fail to collaborate effectively?
A5: A lack of collaboration may lead to inefficient use of resources, missed opportunities for innovation, and ultimately, diminished organizational performance in a competitive landscape.