• Strategy
  • CFO IT

The Great Divide

Or, what your CIO would really like to say to you if only the job market were better.

Despite sounding like an oxymoron, co-equal is a term that many experts pull out to describe a proper relationship between the CFO and CIO. That can be difficult to achieve, particularly when one reports to the other, but companies have found ways to foster such a relationship.

At Rockford Health System, for example, CIO Dennis L’Heureux was given a say in picking a new CFO. “I recommended finding someone who appreciated the strategic value of IT, understood benchmarks for IT. Someone that I could work with every day,” he says. Both executives report to the CEO and work well together, says L’Heureux.

Belt-tightening is a perpetual exercise at the $400 million—plus company. Even so, working with the CFO, L’Heureux has been able to add new technologies. “Recently, for instance, we put in a time-and-attendance system, which increases our capital expenditure and operating and maintenance budgets, but it is expected to reduce payroll expenditures by 1 to 2 percent.”

L’Heureux praises both his CEO and CFO for their grasp of technology. “I don’t have to educate them,” he says, “because they understand the value, and they know that you can’t realistically slap an ROI analysis on some kinds of projects.”

As the former CIO of Federal Express and AT&T, Ron J. Ponder, now CIO of $20 billion WellPoint Health Networks, in Thousand Oaks, California, has witnessed firsthand the many vicissitudes in the CIO-CFO relationship. While Ponder does not report to WellPoint CFO David C. Colby, he says they work closely together. In fact, they have achieved what many might consider the ultimate aim of a CFO-CIO partnership: budget-conscious strategic advantage. Colby, whom Ponder describes as “technology literate,” has been working closely with Ponder to achieve ROI from technology investments and ensure that they correspond with business objectives. “David worked really hard at helping me integrate the three-year technology plan into our three-year business plan,” explains Ponder.

That close coordination, Ponder says, has enabled WellPoint to implement ambitious applications that will put the company significantly ahead of its competitors. In January, for example, WellPoint announced a $40 million program designed to get physicians to stop writing prescriptions and instead to issue them electronically, a major cultural shift that doctors have been reluctant to make.

“We’re working with Dell, Microsoft, and Cap Gemini Ernst & Young to jump-start E-prescribing and provide doctors with the tools they need to do this,” says Ponder. The program launch comes at a time when WellPoint is merging with another $20 billion health-care company, Anthem Inc., to create the largest company of its kind in the United States. Ponder argues that a vital, mutually supportive CIO-CFO relationship is one of the cornerstones of such efforts.

Laton McCartney is a New York-based writer and editor.

Why Is Your CIO Ticked Off?

IT chiefs get really concerned when CFOs and CEOs react to a sound bite or print story about a new technology. “They come running in and say, ‘Hey, everybody is going to voice over IP. What are we going to do about it?’ ” says Teradyne CIO Randy Stone. These unsolicited promptings are especially unwelcome in organizations where senior management has been beating up the CIO for spending excesses and implementing less-than-successful IT initiatives.


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