Much has been written about the supposed "disconnect" between IT executives and CEOs. "An acute state of misunderstanding caused by differences in training, temperament and tradition," is how Charles Wang, founder and then chief executive of Computer Associates described it in his book Techno Vision (McGraw-Hill, 1994).
Much has also changed since Wang wrote the book. As more and more companies and their boards came to realise the strategic importance of IT, the CIO role emerged and IT chiefs became part of the executive team. By anyone's standards it has been a rocky road, though, as has the relationship between CIOs and CFOs - to whom 41 per cent of CIOs still report, according to Gartner's March 2002 survey of its Executive Program (ExP) members (see "So Who Is the Real Chief?", page 88).
"Business is screaming for it, IT is trying to deliver, but CFOs put a hold on it. If they don't want you to go ahead, they ask for yet another report. It starts out as frustration and turns into all-out war," is how one IT director in 1998 described dealing with CFOs. "Everyone hates CFOs, at least everyone who wants to get something done," said another IT chief. "They're so petty and autocratic. You have to go through a very formal process for very minor expenditure just for the sake of it. But in IT we also speak a different language. To an accountant, PCs depreciate over three years, yet CIOs often need to replace them annually. It's easier to put forward a business case for a new manufacturing plant to a CFO than it is for an IT infrastructure project, as there are many more tangible outcomes."
That was then. Just as the CIO role has evolved, so has the CFO role, from accountant to strategic thinker and planner. However, according to Bart Stanco, Gartner's global CIO and senior vice-president IS, the key to a successful and constructive relationship with CFOs is in fact to speak their language. Talk in terms of cost, qualitative and quantitative measurements and you will be appreciated, he says. Stanco himself reports to Gartner's CFO but says that finance is essentially no different from any other internal client of IT at Gartner. However, as both finance and IT sit across the enterprise, they both have a view of all the other business units and the CFO is involved in all major investment decisions.
"I think the biggest problem is that for many years it was the CFO who drove IT, which is a great fit as long as you're only implementing financials," says Les Hayman, president and CEO, SAP Asia Pacific (and a former IT manager himself). "There is probably more of a disconnect between the CFO and the CIO than there is between the CEO and the CIO. CEOs are starting to understand to a much greater extent the role that technology can play in their business. But in some areas I think there is still a bit of a power struggle between the CIO and the CFO.
"In the mid-1990s in Australia we found it was traditionally the CFO who was the SAP champion, not the CIO. The CIO tended to view SAP as much more threatening because it was taking away some of the value add that the IT function could give to the business. CFOs, on the other hand, saw that they could deliver a business-driven rather than a technology-driven solution to their companies. These days it's very unusual to have CFOs in large companies making a decision on technology without the CIO being heavily involved, and it's unusual to have CIOs making the decision on their own without having the specific business unit manager involved."
Hayman makes some cogent points. Indeed, in most organisations finance and accounting was the first area to be automated as it was the primary source of information provision. This was why it was deemed that data processing (as it was then) should report through to the head of finance. As a result, for many years most of the IT effort went into financial applications, with the rest of the business hardly getting a look in.
Conversely, it is still the CFO who sometimes initiates and champions major re-engineering projects and concurrent systems implementations, and it is they who have often been instrumental in transforming the role of IT in the organisation from operational to strategic.
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