Do CFOs and CIOs Need a Mediator?

One way to bridge the CFO-CIO divide: Bring a third party into the conversation.

Having looked at life from both sides now, Bill Glassen is acutely aware of the often profound disconnect between finance and IT. In fact, he embodies it. The former controller at Borden Milk Co. says his lack of knowledge about technology once proved costly. “I overloaded my promises to senior management, using IT as my fallback position,” he says. “On one finance project, for example, I made promises I couldn’t keep because I wasn’t as technologically up-to-date as I should have been. We went over budget, exceeded the deadline by almost a year, and ended up with hardware that didn’t meet our needs.”

The project failed, and Glassen, a 25-year finance veteran, felt completely responsible. But the man who had often believed that “IT was the answer to everything” didn’t give up. Instead, he took classes on technology and then went back to his IT group, working with them to reformulate the project. Together.

The experience proved so valuable that in 1997 Glassen embarked on a new career path, heading up the IT department at 75-year-old Cashman Equipment Co., a Las Vegas-based heavy-equipment dealership with 530 employees. “I have a CFO here, Jim Moore, who understands technology and is directly involved in IT,” says Glassen. “We speak the same language.”

It’s a rare CFO who believes in technology too much, and then educates himself to the point where he can move into the role of CIO. More common is a tense working relationship in which each C-level executive secretly wonders whether the other one really gets it. It was summed up nicely at a CFO conference last fall when one panelist said, “I have no problems with my CIO — because the post is empty at the moment.”

Consultants say many CFOs throw dollars at costly IT projects without fully grasping the business need or understanding the value of the technology — an expense undertaken without the rigor given more easily understood capital investments. CFOs counter that they are oversold if not misled, and that when they question the value of a project or simply ask for more analysis, they are cast as Dr. No’s: hopeless number crunchers impeding the organization’s march into the future.

As Don Schulman, global leader of financial management solutions at IBM Business Consulting Services, sees it, “When you’ve got a CFO who is a business person and a CIO who is a technology person — and they don’t live in each other’s world — clash is inevitable. There needs to be fusion between these two strategic positions, or IT projects will fail.”

Great Expectations

And fail many have. A survey of 450 companies by consultancy Mainstay Partners LLC indicates that companies are spending 25 percent more on IT than their budgets indicate. The survey’s woeful tale of companies bewildered by IT posits that a staggering 72 percent fail to tie IT investments to business strategy and goals. Small wonder that IT investments seem to have little impact on company financial performance. Also according to the survey, fewer than 12 percent of companies accurately measure the business benefits of their technology investments, 57 percent say their senior business executives are not involved in IT planning, and 82 percent concede they do a poor job communicating IT strategies across the enterprise.


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