How to manage your CIO: What every CFO needs to know

More and more CFOs are becoming responsible for businesses’ IT function. Andrew Donoghue explains what they must know to manage CIOs.

Financial chiefs are only going to become more involved in IT decision-making in the future, recent research from analyst Gartner shows.

Around 23 per cent of CIOs surveyed last year said they currently report to the head of finance, compared to 38 per cent who reported to the CEO. According to Gartner, if this trend continues, by 2013 more CIOs will be reporting to the head of finance than the chief executive.

The CIO may be more familiar with the intricacies of the technology but the CFO will make the final call on whether the project goes ahead. So how much does the chief financial officer really need to know about technology to feel confident in their decisions?

silicon.com spoke with industry insiders, senior financial staff and academics to find out what insights about technology CFOs need to equip themselves with to effectively oversee the IT operation.

1. You don’t need to be a techie to understand IT
As anyone who has ever dealt with a so-called ‘helpline’ can attest, some IT staff have a hard time empathising with people who don’t share their technical knowledge.

But according to Ian Sibbald, financial controller of Cranfield University, it is possible to work closely with, and even make decisions on IT projects without having an intricate knowledge of the systems concerned. “Our IT department is very good at not going down purely the technical aspects of an IT system,” he says. “We will think about what are the right solutions from a business perspective.”

Ian Singer, IT partner at accountancy firm Littlejohn, agrees CFOs should focus on the business benefits and not get too wrapped up in the technical details. “CFOs shouldn’t get bogged down by the detail of technology features. CFOs faced with new technology should ask their CIOs, ‘what are the benefits to the business of implementing this change/buying this new system?'”

More important than technical knowledge is the ability to ask the right questions and illicit responses in clear language from the head of IT, says David Chan, director of the Centre for Information Leadership at City University. “You don’t need to be a techie, you just need to be able to probe and get them to explain things in plain English. If you don’t have technical staff that can answer those questions, then recruit them or train them.”

2. Think themes not technologies
Rather than focusing laser-like on specific technologies or products, it is more realistic given the rapid pace of development in the IT sector for CFOs to think in terms of general topics and let the tech experts fill in the details, experts argue. “I would say it is more themes in technology. Some of those that we have been looking at recently would be voice over IP, ERP solutions, and carbon management,” says Cranfield’s Sibbald.

Amir Sharif, professor of operations management at Brunel Business School, agrees that a broad understanding of technical strategy is more useful to CFOs than wrestling with specific products. “CFOs definitely need to know what’s going on with IT – they don’t need to know the specific nuts and bolts obviously but a good, broad understanding of the strategic use and risks of IT are essential,” he says.

That said, Sharif also argues against complacency and expecting the IT department to spoon-feed all the requisite information. “One fundamental danger that CFOs face is that of ‘Leave it to IT’,” he warns.

For more go to: Silicon.com

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