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  • CFO IT

Stand by Me

While finance and IT don't always see eye to eye, many companies have learned how to transform a mere reporting relationship into a true partnership. Could this be the path to genuine alignment?

At some companies, it’s not only the CFO who happily swears off a detailed knowledge of technology; the CIO does, too. At Saucony Inc., a small ($136 million) publicly traded maker of athletic footwear and apparel, CFO Michael Umana says that while the company’s senior vice president of operations and technology, Sam Ward, does report to him, “I’m happy to stay out of the fray. In fact, I love the fact that I get to forward ERP vendor phone calls to Sam.”

But Ward, who went through General Electric’s financial-management training program before earning an MBA and then working as a consultant at Arthur Andersen, disavows a deep knowledge of technology, saying that he’s most comfortable with supply-chain, operations, and IT planning issues. He relies on Andy James, vice president of MIS, to serve more as a “pure” technologist. So James is the person steeped in computer science? Not at all — before moving into IT, he served as controller and was once an accountant at a Big Eight firm. “Managerial training and financial literacy are the keys to solving business problems,” says James. “Some people in IT don’t get that.”

Saucony’s everyone-is-a-finance-guy approach may be unusual, but it does underscore the way in which finance and IT are working more closely together. “Finance,” says Ward, “is the language of business decisions, from IT to marketing to operations.”

United by that common language, Umana, Ward, James, and other leaders have spent a significant amount of time and money not on IT strategy per se, but on streamlining operations, with IT as a vital part of that process. Umana may not feel pressure to understand the inner workings of software, but when he says, “We’ve gone from 2.5 to 5 inventory turns per year; improved our gross margins, working capital, and several other financial metrics; and now have a 98 percent on-time delivery rate,” it’s clear that he understands exactly how IT has played a part in all these achievements.

“We have a shared vision in how we want to move forward,” says Umana. “There are no gaps in understanding between decision-makers, and finance education is key to that.”

That’s not to say that CFOs have simply convinced CIOs to deliver status reports long on finance buzzwords and purged of technobabble. Geswein says he spends about one-fourth of his time involved in IT issues, while Umana says that “we combined operations and IT because they are so closely linked that we can’t tell where one ends and the other begins, and I spend a lot of time with Sam and Andy working through operational issues that have a huge IT component.”

At First Tech Credit Union in Beaverton, Oregon, CFO Mike Osborne says, “I spend more time thinking about technology strategy implications to our business than I do on the finance side.” The 12-branch, $1.4 billion (in assets) credit union has a very tech-savvy client base — one-third of its 130,000 members use electronic banking services, an industry high. The credit union places such a premium on cutting-edge features, in fact, that Osborne has no fewer than four CIOs reporting to him. “IT used to report to the CEO,” he says, “but I think it wore him out.”

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