(Editor’s note: This article has been revised from the original version to clarify the structure of Nationwide’s IT finance team.)
No one doubts that managing the funding and expense of technology operations at a Fortune 500 company is a big responsibility. In fact, it’s a puzzle why more companies don’t have a team devoted solely to overseeing the finances of the IT department.
Nationwide Insurance has such a team, led by Michael Leach, the CFO of Nationwide Services Co., a subsidiary that owns and manages all of the parent company’s technology. He and William Miller, associate vice president and controller for NSC, have a bird’s-eye view of both the finance and technology functions in their role as liaison and, occasionally, referee between the two.
For Miller, who recently sat down for an interview with CFO, the keys to the job are understanding that some principles of running a company do not apply to the IT department, absorbing as much information as possible about available technologies and vendors, and helping IT and finance view each other in a realistic light.
But Miller and Leach are finance professionals first. That identity was reinforced this year, when Leach began reporting directly to Nationwide CFO Mark Thresher. Previously he had a solid line to the CIO and a dotted one to the finance chief, but now those relationships have been flipped. Following is an edited version of the interview.
What is your view of your role and the value it brings to the company?
Over the 10 years that I’ve been involved in IT financial management, the deeper I’ve gotten into it, the more I’ve recognized that it really is a unique specialty, much like accounting or treasury. The fact that I get asked about it over and over again means people recognize that there’s a value in that specialty.
Our board of directors is looking to my team every year for an update and analysis of what’s going on. They’ve continued to fund us and want us to continue our work.
“Any organization that doesn’t have its CIO and CFO on equal levels is asking for trouble.” — William Miller, Nationwide Insurance
Do you have an overarching philosophy about IT economics?
The IT trend line is different from the company’s trend line, whatever business you’re in. IT economics don’t follow insurance-industry norms, and the same is true at car dealerships or any other type of organization. When people try to make decisions about financial investments in IT while thinking about the industry they deliver products and services in, rather than about the IT industry, they tend to make mistakes.
For example, car sales may be down, but the dealership still needs to manage every car sale, so there are still IT investments that it has to make. A financial-services company may have stopped making mortgage payments, but it still has to store all the transactions that come through for the mortgages already on the books. And it has to build into systems the functionality to deal with all the regulatory changes relative to handling mortgages.