Insider Business Club: technical difficulties

Can a business change the way it views IT and ensure it uses to support
the business?

Noel Gorvett, group business systems manager, Pearson

We have moved into a far more compliance-orientated world. Over the past
three years we’ve moved from a very distributed environment where each business
was responsible for its own technology, their own implementations, their own
reporting processes etc, to a centralised and transparent environment.

The requirements for the programme were that we achieved a faster close, more
understanding about the processes than the technologies themselves and a single,
standardised reporting shot of accounts. We went through a fairly extensive
programme working with the businesses on how they improve and work their
processes. The technology behind that then supported it and, from a perspective
of sponsorship and involvement, both the CFO and the CTO were on the steering

In hindsight, we may have handled the education and working with the
businesses differently because we didn’t, at that point, really understand how
the culture would be changed within the business or the way people’s jobs

Is the relationship between systems and finance departments a healthy

Ade McCormack, FT columnist and founder of Auridian

There is an uneasy relationship between IT and the rest of the business and
there is a very uneasy relationship between IT and finance. Finance wants to
know what IT delivers in terms of value.

The IT industry doesn’t actually know how to represent value in terms that
finance people can understand. So, we claw at, to some extent, pseudo-scientific
spreadsheets, enterable indexes like return on investment, total cost of
ownership, total economic impact and total value of opportunity.

These are a little bit of a waste of space. When you buy a PC, when does it
start delivering value, when does it stop delivering value? It’s almost
impossible to say. So, value measurement is something the IT industry hasn’t got
its head around yet. It needs to do it in a business- friendly way.

I think the best way one can decide whether you’re getting good value out of
your IT investment is whether your users and your customers, who come to you
online, are happy. If they’re happy then you’re doing something right in the IT

Are most companies managing IT investments to best effects?

Dale Vile, research director, Freeform Dynamics

Whenever we find an organisation that doesn’t know how much a project is
going to cost and how much a system is going to cost over its lifetime, we
generally find that the business is not particularly happy with IT.

We’ve seen some massive changes in behaviour in terms of procurement of
software solutions in the past 18 months. At the beginning of 2000, we still saw
a lot of runaway investment taking place. But then the crash came.

What we’ve seen for the past couple of years is investment for reasons mostly
of competitive edge. I would add the compliance question does figure quite
highly in specific market sectors, but, generally speaking, it is overestimated
in terms of its impact across businesses as a whole.

There has, however, been a lot of, maybe, deferred investment in
infrastructure and a lot has happened in terms of IT infrastructure developments
technology wise over the past few years. That’s something that is going to sneak
up on us over the next two or three years.

What market changes are forcing companies to invest in finance

Dennis Keeling, chief executive, BASDA

We are just about to embark on the biggest change to accounting and finance
systems in the past 13 years. During that time there has been no compliance
reason to change the finance systems. But as you’ve probably seen with carousel
frauds, the government is considering imposing legislation on the handling of a
specific range of goods.

The software industry has been involved in consultation and, as far as we’re
concerned, the plans that the government has are far too complex. We’re hoping
for that to ease slightly, but the government is still adamant that it will be
imposed by December.

That will necessitate the biggest change that we’ve had to our computer
systems for more than a decade. Will it affect your business? If your business
is involved in buying or selling mobile phones, computers, computer chips,
memory chips, iPods, PDAs, then it will be on this list of goods that will be
subject to reverse charge.

Do you have the technology in your present system to cope with this? I’m
afraid the answer is no. There will be a white paper on it shortly and there
have already been two bulletins on it.

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