Such a steering committee also could help prevent the costly purchase of systems with more power than the company needs. That is a common scenario, according to Ken Sanginario, whose firm, NorthStar Management Partners, provides interim CFO and CEO services in a variety of industries. Training time and costs are grossly underestimated, causing people to become frustrated and stop learning.
A related mistake is to buy new hardware or software when existing technology can suffice. Initiatives usually are done faster and cheaper when companies resist the urge to buy new gear and instead reconfigure existing systems, according to Cramm. The problem is that CFOs, like IT executives, “fall in love with bright, shiny objects,” she says. She advises that for any project, IT should be required to include the use of incumbent technologies in the range of options.
Beyond its initial price tag, new technology exacts another cost — on users. Dinkins of USI Insurance says that when a previous employer implemented a new system that forced account managers to update customer policies using two computer monitors simultaneously (instead of transferring information from paper documents to a single monitor), the company underestimated the impact on workers. Most of the account managers were in their 50s and had been doing the job for many years, and the change was stressful. “When you’re ready to move on a project, you have to stop and think about things like that,” says Dinkins.
Also Key: Beware Your Bias
Most CFOs know that there is a lot more to IT than financial systems, yet a finance bias may still creep in when it comes to prioritization. Khaled Haram, who has held both CFO and CIO roles in his career and currently is president of Lighting Science Group, says he often sees the focus tipping too far toward finance. That can shortchange order-management, customer-relationship, and other systems that less directly benefit the CFO, or where the financial ROI may not be clear-cut.
As the ultimate allocators of resources, CFOs should have a holistic view of their company’s needs, says Haram. They tend to look at the end results as reflected in the financial systems, but they should look more upstream, to the process.
Once in that mind-set, a finance chief may have a better appreciation of the difficulties of IT execution. Vilifying the CIO when projects are late and over budget may be unreasonable, especially since, Haram says, projects are often enhanced by delays as people start looking at them in different ways than they did at the outset.
That viewpoint is alien to most financial executives, who grew up in a very disciplined profession. “You have your debits, your credits, your accounting rules — it’s all very methodical,” Haram says. “But IT is not that buttoned up. The system itself will end up being methodical, but the process of building it is not.” CFOs often conclude that CIOs don’t manage budgets well and as a result impose arbitrary cost cuts.