IT Budget: The Crucial Role of the CFO in IT Management
In the rapidly evolving landscape of healthcare, the need for strategic leadership and collaboration has never been more crucial. This week, the HealthLeaders Chief Digital Executive Exchange (CDEX) is taking place in Washington D.C., where panel discussions on teamwork needed for systemic transformation are at the forefront.
The role of the Chief Information Officer (CIO) is becoming increasingly complex, with technical debt emerging as the biggest barrier to progress. CIOs are grappling with a mixture of legacy IT systems and new technology, spending an inordinate amount of time and money on maintenance and upkeep.
Financial oversight is essential in navigating these challenges. AI pilot evaluations, for instance, require clear key performance indicators and return on investment (ROI) thresholds to be established upfront. The CIO must balance IT needs with clinical and financial concerns, gaining support from other C-Suite members to push transformative ideas forward.
A survey by CereCore breaks down CIO priorities into four categories: technical debt, IT staffing, infrastructure improvement, and AI implementation. The surveyed CIOs are focusing on maintaining their current IT foundation and watching debt, and are devoting less to capital improvements.
The need for a strong CIO-CFO relationship cannot be overstated. In the current economy, where health systems and hospitals have limited cash to spend on technology and innovation, collaboration is crucial for financing new technology implementations. The CFO should lead IT-asset lifecycle planning and advocate for dedicated budgets to refresh aging systems, including evaluating opportunities to consolidate vendors to lower costs and simplify operations.
According to Andy Crowder, the Chief Digital Officer (CDO) of Advocate Health, the role of the CIO should be as a strategic advisor, part of the C-Suite, tied to strategy. This sentiment was echoed during a CHIME panel at ViVE 2025, where he stated that security/compliance issues and end-user access and support are concerns tied to technical debt.
The survey revealed that 29% of CIOs and executives are more concerned about technical debt than in previous years. More than half of the surveyed CIOs are allocating at least 75% of their IT budget to operational expenses, compared to around 40% in 2024.
AI is seen as both a cause for CIO headaches and a cure. Almost a quarter of CIOs of larger hospitals and health systems identify AI as a key priority to driving savings and efficiency. However, a strategy for using AI, virtual care, or digital health should have a definable return on investment and the backing of key decision-makers.
The governance of a health system's approach to AI requires direct leadership from the finance department. The CFO should champion a comprehensive AI framework that addresses cost, ethics, risk, long-term sustainability, and appropriate-use policies.
In conclusion, the healthcare industry is facing significant technological challenges, but with strategic leadership, collaboration, and a focus on financial oversight, these hurdles can be overcome. The CIO and CFO, working together, can drive financial performance, improve clinical quality and access, and implement successful transformation strategies.
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