Why CFOs Who Rely on their CIO too Heavily Are Risking their Careers.

By Rich Bond

The percentage of corporate spending going to IT is at an all-time high, but so is the level of dissatisfaction.

Many of the big promises for cost savings, improved efficiencies, and greater control and understanding of operations and finance failed to deliver. From my perspective, IT people love big projects, which generally run too long, cost lots of money, and underperform.

Most of the value of treasury and finance is not in the systems, but from what you do with the information. Companies spent billions on SAP and got almost nothing from it.  They ended up hiring smarter people with finance and IT skills to make the system produce useable information.

To me the most successful CFOs became so without significant help from IT. Instead, they hired brighter, IT-literate people to make use of the existing IT resources or to bring in new tools like business intelligence (BI) software that helps companies condense data and analyze trends.  Prior to BI, this was largely being done on spreadsheets.

While IT can give the CFO and other finance people tools to work with, it is up to finance to get value out of them or ask for new ones. There are some great tools like data warehouses that allow finance to operate relatively independently of IT and use outside information to make their analyses more meaningful. In recent years, there have been some great software products that are add-ons to SAP to do what finance people have been doing themselves.

I’ll admit, there can be great value in investing in IT. Take FedEx, a company that succeeded because of IT advances and RF tags. And there are organizations, like Southwest Airlines, whose existence was imperiled by failure to spend the money to replace outdated systems and processes.

Good finance people know what they need from IT and how to get it. But placing too much faith in IT is an easy way to get fired.   As a CFO, you need to make IT work for you and hire people who know how to help make that happen.

 

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