If CIOs Don't Embrace Change, CEOs Will Find Someone Who Will - Maybe the CFO

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The recent release of a Gartner survey that found, among other things, that CFOs authorized 26 percent of all IT investments while CIOs alone authorized only 5 percent of IT investments prompted me and other folks to examine the sometimes tenuous relationship between CFOs and CIOs. Just last week I wrote a post in which I wondered whether the CIO or CFO should sign off on IT investments, concluding that ideally an executive board or other committee of leaders should do it.

 

A Computerworld article from March features a few organizations where a single person serves as both CIO and CFO, in theory wielding most if not all of the IT investment power. Think of it, no wrangling back and forth about whether a server or a software application is a good investment. Interestingly most of the examples in the article focus on companies poised for major business transformation efforts, implying that the elimination of lengthy debates over investments allows organizations to move more quickly.

 

One of the executives said he took on his dual duties because his company needed "a lot of coordination and communication between the financial model and the data model." The implication here seems to be this kind of communication and coordination doesn't occur when the CIO is pushing for money the CFO doesn't want to spend.

 


The examples offered in the article are all smaller organizations facing shortcomings in IT. Jim Money, the VP, general manager and director of Alabama-based Joe Money Machinery Co., said that prior to appointing a CIO/CFO "there was no one who could look at a three- or five-year business plan and say, 'These are the IT resources I think we should include in our projects.'" Again, the implication seems to be that the typical CIO has trouble prioritizing IT investments and taking a more strategic portfolio management approach.

 

Earlier this month IT Business Edge colleague Susan Hall, in a post on CIOs taking the lead on innovation, cited one expert who felt the CIO's encompassing view of the business at a process level and his or her methodical approach to systems and process design make the CIO the logical go-to person to lead innovation initiatives. Yet another expert highlighted an area that seems to more naturally fall under the purview of CFOs: the connection of business processes to enterprise policies. I'd add that the CIO's process-centric view of an organization probably isn't worth a hill of beans if the CIO doesn't prove he/she can deliver process improvement.

 

The article relates an instance in which Money Machinery's CFO/CIO, prompted by his concern that the company was losing money on broken construction equipment when it was unable to prove damage was caused by customers, implemented a document-retention system that stores before and after photos of rental equipment along with details about the equipment's condition, providing a time stamp that's admissible in court. Problem solved.

 

The company's CIO/CFO calls it "a very good example of how being a CFO and knowing the issues that are so common to the function spill over to the issues that affect IT." True, but is there a reason a CIO couldn't recognize the business need and lead this kind of an effort?

 

I wouldn't think it would be too tough to convince a CFO or other C-level executives of the wisdom of this kind of an investment. This obviously reinforces the need for the CIO to stay on top of business needs throughout the organization and to proactively suggest technology-driven ways of addressing them.

 

If CIOs don't do this, then CEOs will look for someone who will. It may be the CFO, as appears to be the case at Home Depot, where CFO Carol Tome appears to be leading technology initiatives. In my post about Home Depot, I cited a BusinessWeek article that related CEO Frank Blake's decision to ask Tome to "come up with a plan" for the retail chain's mobility strategy. The article quoted Blake as saying Tome "has the breadth of view to coordinate that. She's a very bright woman with a good sense of the business."

 

There's been a lot of speculation about how IT jobs will change in the coming years - though most of that speculation has focused on lower-level IT positions. But it's becoming clearer all the time that change will come to the CIO role as well. Last summer, when the Corporate Executive Board's Information Technology Practice released a report that focused on shifts in IT organizations, it predicted large chunks of traditional IT would vanish with some roles taken over by external service providers and others becoming embedded in the broader business. The CIO "will [either] expand to lead this broader group or shrink to manage technology procurement and integration," it said.

 

I recently wrote about Petco, a company where the CIO has seemingly embraced the idea of leading IT change rather than being subsumed by it. Petco trimmed its IT staff from 150 two years ago to about 50 today. Petco CIO Herman Nell opted to outsource the company's IT infrastructure, call center and most software development, embed some of its IT pros on management teams and allow IT staffers to experiment with job rotation.



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Jul 25, 2011 2:08 AM Yisarel Dancziger | Digital Fuel Yisarel Dancziger | Digital Fuel  says:

The good news: from where I stand, more and more CIOs are indeed embracing change, while more and more  CIO/CFO teams are working together to advance their companies' business goals.

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