The IT guy now holds the power.
Research in the USA has suggested that the head of IT is the most powerful person in an organisation. Responsibility has come under the finance function and with e-commerce, changes are afoot. Accountants in business need to beware of the threat to their long-term position and act if they want to stay at the top of their organisation.
Historically finance was responsible for IT for obvious reasons. When computer systems first came into being in commercial organisations the applications were usually for the accounting function. Payroll, sales and purchase ledgers were common examples of this. Finance picked up the responsibility for this as a result.
IT was a complex product and this fitted well into the mystique of the accounts department, which was used to dealing with strange terminologies ill understood in the rest of the organisation. The teams of staff that carried out manual processes within finance became data input clerks reporting into IT, or data processing, as the function was known. They in turn reported into the finance function.
IT is now used across the business spectrum and the benefits are coming from customer-facing activities rather than the service or ‘back office functions’. Hence it is open to a much wider audience internally.
Many IT projects have performed badly in the last decade. Finance has unfairly been at the brunt of this a high proportion of finance staff has tried to protect ‘their’ information and restrict user access to data.
This has contributed to a high level of dissatisfaction with the existing systems and the information that is available.
Chief executives realise the huge cost of IT. A growing proportion also recognise the tremendous opportunities e-business is starting to offer.
They want to be involved and understand what is going on in this area.
As a result IT is increasingly being represented at board level and the role of finance is being sidelined.
IT is a change agent and a successful head of this role will need creativity to understand the scale of the opportunities and the ability to rapidly make change happen. These skills are not attributes associated with a stereotypical accountant.
This situation is likely to develop further as the size of the accounting function decreases. The transaction processing side of the role will diminish as e-business automates the buying and selling process. Outsourcing of the professional aspects of the accountant’s role will become easier as technology allows communication with third parties such as lawyers and auditors. This will potentially leave the FD with a much-slimmed down portfolio of activities.
The role of IT will increase in importance and there is a danger finance will go the other way. Forward thinking accountants must act and reskill if they want to stay ahead.
– John Tate is chairman of e-business consultancy Tate Bramald. ?: