An Action Plan for IT

CFOs who oversee technology should have no fear: a methodical, top-down management approach can produce strong results.

And Finally: Foster Democracy

Once a CFO feels comfortable with his or her grasp of IT and has a high-performance IT capability in place, a viable goal may be to loosen that grasp and, as Cramm says, “democratize” IT. That means creating a platform and policies that allow business leaders to fulfill their day-to-day technology needs on their own. To do that, a new organizational model must evolve that “will allow IT to make sure IT is done well without trying to do it all,” she writes in her new book, 8 Things We Hate About IT.

In the democratized framework, the technology department would shift from direct to indirect control of IT-related activities, from a servicing to a coaching role, and from providing “point” solutions to providing enabling tools. That, in turn, would free IT to focus more of its limited resources on innovation.

A good way to foster such democracy is to recruit technology “power users,” people outside the IT department who have a natural affinity for technology — who, for example, can work wonders with data-analysis tools — to mentor the less advanced. “People who are extremely motivated to innovate and really maximize technology might be one of the most underutilized resources in many companies,” says Cramm. She recommends setting up a GATE (gifted and talented education) program, in which power users are rewarded with more freedoms, and personalized IT support for helping the “barely users.”

Ultimately, Forrester’s Symons suggests, CFO oversight should result in greater IT accountability. “IT has been run as this opaque black box for years, and it shouldn’t be,” he says. “CFOs should realize that IT can be held to the same standards as any other organization in the business.”

David McCann is senior editor for technology at CFO.

 

 

Who’s the Boss?

New thinking on a perpetual conundrum

IT often reports to the CFO, but should it? Conventional wisdom holds that the CIO should report to the CEO at companies where IT is deemed “strategic,” or the company regards itself as an “IT-intensive” business.

But new research by professors at Temple University, Stevens Institute of Technology, and Singapore Management University comes to a different conclusion. The reporting relationship should be governed, they argue, not by how IT is regarded but by how the business defines itself. Companies that emphasize product differentiation are well served by a CEO-CIO reporting relationship, while cost leaders are better served by a CFO-CIO relationship, even if IT is an essential component of maintaining a low-cost edge.

To whom does the CIO report?

One academic paper won’t settle a debate that has raged for three decades, but it might remind executives that the quest for IT-business “alignment” should be determined by the company’s core strategy, not the perceived value of, or politics surrounding, its IT department.

To former CFO and CIO Susan Cramm, however, it doesn’t matter who the CIO reports to, as long as it is someone who cares. “It should be someone who has an emotional connection with technology — whether the person is mad, happy, excited, depressed, or whatever,” she says. “That connection can be channeled into some kind of leadership conversation or partnership with the CIO.” — D.M.

 

 

How to Hire a CIO

Whether the CIO reports to you or works with you, if you play a role in hiring here’s a short list of questions to ask, supplied by CIO recruiter Martha Heller.

Problem: The IT organization is not aligned with the business mission.
Question: “How have you changed the culture of your current IT organization?” Look for an emphasis on client focus, business focus, and accountability.

Problem: Users are dissatisfied with the company’s IT services.
Question: “How would your current users rate your IT organization? How do you know?” A good answer will cite a rigorous, methodical customer-satisfaction survey process.

Problem: The IT department is overwhelmed with projects at the expense of building relationships.
Question: “What are your most important business relationships and how do you maintain them?” If the answer is “my vendors,” that’s a bad sign.

Problem: IT champions the latest technologies without addressing ROI.
Question: “What is the most exciting technology advancement you’ve been responsible for?” A good answer is not IT-focused (“blade computing”) but business-focused (“increased market share in a key demographic”).

Problem: A love of arcane terminology and acronyms.
Question: “What do I need to know about services-oriented architecture?” Can the candidate discuss a complicated subject in straightforward business language? — D.M.

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