You Say Cobol, I Say IFRS

When CFOs are suddenly put in charge of IT, how do they get up to speed?

Last year, a management reorganisation at Delhaize Group, a €19 billion Belgian food retailer, left CFO Craig Owens in charge of IT. Other CFOs might have quaked at the thought. For every staffer in finance ready to pepper innocent colleagues with the latest IFRS and GAAP changes, there’s a techie a few floors away in IT who has a similar arsenal of acronyms equally unintelligible to outsiders. In two different worlds, finance and IT don’t often see eye to eye, and being in charge of both is a daunting challenge for any CFO.

But not for Owens. Getting involved in IT has been something of a theme in his career. While financial controller of Coca-Cola’s bottling company in California in the 1990s, he was asked to oversee IT, which required drawing on his hazy memory of the IT module from his MBA course at Wharton to get up to speed. So when it came to the Delhaize’s reshuffle, he knew he had to find ways to “engage intelligently in the IT discussion.”

Owens’ predicament is now far from unusual. Reorganisations, mergers and takeovers often result in IT personnel reporting to the CFO. This means that finance chiefs must have a good grounding of technical knowledge in order to make certain critical decisions, such as whether an application should be hosted or run in-house, or choosing the type and right number of suppliers. While the level of technical knowledge required varies from company to company — depending, for example, on how reliant a company is on IT and how robust the IT team is — Owens says there are some tried-and-tested steps a finance chief can take. The most important one is to regularly seek advice from an adviser familiar with the company’s technology. This could be either a CIO or an external consultant, although the latter should not be someone on a contract with the company in order to avoid conflict of interest.

Owens sees his IT responsibilities at Delhaize falling into three areas: aligning the IT strategy with the overall business strategy; making sure that IT investments contribute to the company’s growth; and ensuring that the right governance processes — such as service levels between IT and operational units — are in place. He leaves the finer details to CIO Terry Morgan, who reports directly to him. “One of the roles of a modern CIO is to orchestrate intelligent dialogue in terms that regular business people can understand,” says Owens. “Just as all business people need to have some sense of finance but don’t necessarily need to be completely fluent in GAAP, I don’t think that we [finance professionals] need to have a deep fluency in the really technical pieces of IT.” He adds that it’s important for IT staff to avoid putting him “on the back foot by speaking in tongues, rather than plain language.”

Stand Back

Richard Tobin agrees. Four years ago, the CFO was put in charge of the IT department of SGS Group, a SFr4.3 billion (€2.7 billion) Swiss firm that provides inspection, testing, certification and verification services. To keep up with the latest developments in technology, Tobin regularly reads reports from IT research firms as well as the coverage in the daily business press. He also meets with executives from companies using software applications that SGS is considering, in order to get a firsthand account of their effectiveness.

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