6 things that should be in the CFO's budget -- not mine!

CIOs are from Venus. CFOs are from Mars. And nowhere is this more obvious than at budget time.

Ahhhh. . . chief financial officer: a title, surely, that only a mother could love. Yet there you are, the chief information officer, hitched to this business colleague in a relationship of convenience, confusion and culture-clash. CIOs are from Venus. CFOs are from Mars. And nowhere is this more obvious than at budget time.

We’ve all seen the cartoons, in which the firm’s annual budget biffo depicts the CEO sitting at the head of the table, arms folded, eyebrows arched. The CIO stands to one side -- there is no chair for him -- a forlorn individual. He is undernourished, dishevelled, shoulders hunched, wearing specs. On the other side of the table lounges the CFO: handsome, well-dressed, grinning like a Cheshire Cat. The moment tells us the CIO has just realised he’s taken a knife to a gunfight.

CIOs are optimistic big thinkers who thrive on change, whereas CFOs tend to crave order

Bruce Carlos

But in our YouTube adaptation of this cartoon, something magical happens. Like the Cowardly Lion in The Wizard of Oz, the CIO finds his voice. In a tone somewhere between Darth Vader and Dirty Harry, he tells the other two Cs that THIS time it’s gonna be different. This is how the budgets will look for the coming year. And this is what will be in the CFO’s budget. . .

1. Training

Julian Tan, CIO and head of business operations at Dexus Property Group, says he’s all for cost reduction, but he wants to know: who’s cost we are talking about?

“The item that should be in the CFO’s budget, but always ends up in mine, is training,” says Tan. “This even covers re-training when his staff haven’t paid enough attention on the first go! As we all know, people learn at different rates. They just seem to learn more slowly when their boss isn't paying!”

Bruce Carlos, a former CIO of Raytheon Australia, agrees that training costs should reside with the bean counters. But he wouldn’t stop there.

2. All shared services

Carlos tells of a successful CIO friend, an accountant by profession with years in sales and business development, who still talks of how he “came over from the dark side”.

“He has selling and financial acumen, but the dark side he describes helps to keep him connected with CFOs, so he always gets his budget,” Carlos says.

Carlos believes CIOs are optimistic big thinkers who thrive on change, whereas CFOs tend to crave order. A meaner man would say they’re the type of people who fold a fitted sheet.

“Sometimes we seem to be from different planets,” Carlos says. “Technology Management Analytics reports that about half the technology managers surveyed and even more financial executives cannot agree on how to measure technology ROI, and few financial executives thought IT could measure ROI adequately.

“So things that should be in the CFO’s budget are shared services that create shared value through common centres of excellence; and any expenses for organisational development and process improvement, which the CIO needs for IT to function effectively.”

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3. New applications

Like window tinting, alloy wheels or GPS navigation, it’s the cost of extras and add-ons that can really hurt. So who should pay for the cool but non-essential technology baubles?

If the gung-ho types in sales and marketing want some new trinkets or frippery attached to the company’s CRM then it’s a cost I’ll send their way

Anonymous CIO from an Australian manufacturing company

One CIO at a mid-size Australian manufacturing company says the costs of developing new applications that benefit only one section of a business clearly belong with that business unit.

“For example, if the gung-ho types in sales and marketing want some new trinkets or frippery attached to the company’s CRM then it’s a cost I’ll send their way,” he says. “Same for the financial types who want to tweak the risk management software. Every tweak costs money, so it’s a classic chargeback in my book.”

4. Everything

There are those brazen CIOs who claim they can make a case to have someone else pay for everything. Simarjit Chhabra, the CIO of fire detection and security specialists Xtralis, would start with people.

“This should be part of the HR budget,” he says. “After all, what is the activity of human resources other than providing resources for humans?”

More than half a CIO’s budget deals with human resources, so even a novice CIO should be able to reduce his or her budget by 50 percent simply by sending those bills back to the HR Director. If you haven’t met your HR Director, they’re easy to find: they’re the ones organising the wellness program.

Chhabra would then move onto communications costs -- landlines, mobiles, Internet, PABX, etc. And he could be onto something. CIO knows of one ASX 100 company that made its business units pay for their employees’ use of mobile phones and saw the bill drop by almost half.

“This should be part of the marketing budget as they need you to communicate with customers,” Chhabra says. “Most of us in IT don’t like to talk to anyone. We’d prefer to hide in our comfort zones.”

Chhabra also takes aim at hardware and software maintenance. “This should be part of the facilities management budget,” he says. “After all, don’t they manage maintenance of other building activities? Why should IT equipment be given alien treatment?”

Stand back, he’s not finished. . .

“And we’ll throw in the computer leases,” he says. “This should be part of the finance budget. After all, they’re the people who are meant to manage the leases for the building, furniture, cars and our other tools of trade.”

Finally, proving that chargeback, bravado and Red Bull make for a heady cocktail, Chhabra says all IT travel expenses should also be put on the CFO’s tab.

“Hawaii, Bermuda, Maldives -- that sort of thing. This should be mandated by the CEO for all IT personnel. It’s essential for IT to learn to relax, socialise and develop new people skills, so these trips would need to be sanctioned every six months as part of the firm’s R&D budget. There would be massive ROI.”

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5. Nothing

Some CIOs believe that with the pain of wearing the cost comes the pleasure of controlling the expense. After all, the hand that signs the cheques is the hand that runs the shop.

So it was for former senior VP and department head of SMBC Leasing & Finance, Arun Manansingh, whose responsibilities for the subsidiary of Sumitomo Mitsui Banking Corporation included IT.

“My budgets contained everything I needed to run my department,” Manansingh says. “It was better that I had oversight over every line item.” Given that the bulk of Manansingh’s budget was spent running mission-critical operations in New York and London, why take the risk of letting a CFO anywhere near the money?

6. Pharmaceuticals?

Law-abiding CIOs might not know that Diazepam has anticonvulsant, hypnotic and sedative properties. It is commonly used for treating anxiety, insomnia, seizures, muscle spasms, and restless legs syndrome. Sound familiar?

Dematic CIO Allan Davies says his monthly Diazepam bill is the first thing he’d send back to the finance department. Davies notes that Diazepam can be administered as a suppository. He can think of no better way for a CFO to enjoy the occasional pill.

Now, lest you think CFOs know the cost of everything and the value of nothing, we’re giving the final word to former Queen front man Freddie Mercury. It is a little-known fact that Mercury studied accountancy before going on to become the greatest live performer of all time. Clearly a CFO trapped in the body of a rock god, Mercury once said: “We have no such thing as a budget anymore. We’re lavish to the bone.”