The CIO: friend or foe?

It is fair to say that the relationship between many finance directors and
chief information officers (CIOs) has long been characterised by mutual
suspicion, misunderstanding and even hostility. In fact, it has long been argued
in some quarters that there should be an open season when FDs can hunt CIOs down
and put a stop to all their techno-tomfoolery.

The justification for this harsh stance towards acronym-spouting, binary
watch-toting technology professionals is, of course, cold, hard cash.

Return on investment for the wheelbarrow-loads of money that goes into IT has
often been creatively referred to as a bit of a grey area. Spending on roll-outs
of some ‘must-have’ technology has, for many companies, been accompanied by
little or no quantifiable business benefits.

The other side of the coin

But this, of course, is only half the story. Seen from the perspective of
hard-working IT professionals, many FDs are narrow-minded, suit-wearing,
number-crunching legume quantifiers. The IT geeks accuse the financial killjoys
of doing nothing but rein in legitimate attempts to boost competitive advantage
and improve process efficiency by buying the latest and greatest technology
known to humanity.

However, there are signs of a rapprochement that could see CIO and FD finally
join in harmonious union. Recent research highlights the many and varied
commercial advantages to be accrued by businesses where these historically
bitter adversaries have managed to bury the hatchet.

It is perhaps even more telling to take a step back and look at the origins
of the two reports that support this view. The first is firmly in the IT corner,
coming as it does from technology analyst firm Gartner; the second, an Ernst
& Young study, fights the FD’s corner.

Gartner’s report ­ called Meet Your Next CIO ­ advises senior IT
professionals, including those currently working as CIOs, to make it a career
priority to acquire at least one or two years of non-IT business unit
management. Only by broadening their horizons in this way will they be able to
progress up the greasy pole to what the analyst describes as the CIO roles of
the future, which are focused increasingly on business, rather than technology.

The advice follows on from what Gartner describes as some ‘intriguing’ CIO
hiring trends. CIO candidates, it notes, are no longer required to have formal
technology-oriented backgrounds. Gartner polled IT recruitment specialists,
asking whether businesses were looking for particular educational backgrounds
and technical know-how for their CIO candidates. It transpired that there were
no preferred educational backgrounds for the CIO role. As one of the recruiters
said: ‘When push comes to shove, it doesn’t matter.’

This is not to say that corporates are grabbing the nearest passer-by to take
over their IT departments. Professional qualifications and competence are still
necessary for becoming a CIO. But the new approach does mean that suitable
executive candidates, often from other parts of the business, will increasingly
be selected on merit to take over responsibility for what has historically been
the CIO’s domain. They will then be given the relevant technical training on the
job.

What is important is that these ‘new CIOs’ must be able to show that they
understand the needs of the business as a whole and not just maintain a narrow
technical focus. In recognition of this they will be working to a far broader
remit, with plenty of responsibility for business functions and divisions beyond
the scope of the traditional IT silo.

The IT recruiters also noted that CIOs’ experience of rolling out
high-powered software packages such as enterprise resource planning systems
meant that many had good knowledge across a wide range of activity within their
businesses. As a result many CIOs have already reached the point where they are
well equipped to take on a range of broader business responsibilities.

These sentiments were echoed by Ernst & Young. The firm notes that the
long overdue reconciliation between IT and finance is also being driven by the
onslaught of compliance regulations, which usually have an equally profound
impact on FDs and CIOs.

Ernst & Young’s report ­ entitled Successful IT in High-Performing
Organisations: The impact on business growth ­ notes that successful
organisations show a sophisticated understanding of IT and a flexible view of
its function and reporting lines. These companies employ a variety of leadership
structures to support integrated business and IT decision-making. One strategy
is to promote existing CIOs to the board where they can gain holistic business
experience.

In today’s world, IT plays a key role in helping companies succeed.
Technology is here to stay and needs to be made to work hard to support core
business objectives. Getting the relationship right between FDs and CIOs ­ or
whatever they will be called in the new corporate world order where traditional
roles are merging and morphing ­ is essential. It’s nothing personal, it’s just
business.

This article previously appeared in Accountancy Age’s sister
publication Financial
Director