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You can earn verifiable CPD points from this article – visit the Click2start Website to get your free verifiable points and click here for the manual on how to answer Accountancy SA CPD questions.

“The Information Technology (IT) industry is no stranger to change. ”

CFOs vs CIOs - The Rise and Fall of IT

Nor is it an industry that has walked out unscathed from business transitions brought on by economic pressures and collapsing markets. It is, however, an industry that is well used to transformation and one that is having to become more and more accountable, especially around the boardroom table.

The cowboy days of IT managers and CIOs are long past, and decisions taken by these teams not only have to be vetted and approved at board level, but also need to provide a strategic benefit to the business. It is with this that the CFO has taken a firmer grip on control of technology investments, decisions and, in many instances, the IT department itself.

While the link between technology and finance has in many circumstances always been tenuous, the landscape is changing and the two are working hand in glove to make decisions that meet the demands of both. After the recent global credit crisis, the role of the CFO has taken on a different view, no longer just juggling the balance sheet, but taking an active role in business decisions as well.

But why has the traditional bean counter taken on a different view and, for the most part, a more active decision making role when it comes to technology? One of the reasons for this is that markets have changed, disposable Capex has shrunk, and operating budgets are under constant review, every penny spent needs to present a rational ROI in a reasonable amount of time. Long IT projects that can't place a timeline on the delivery of this promise are simply no longer an option.

Another reason is that of corporate governance and legislation. As per the latest King III report, every board member is now accountable for every decision taken in an organisation. Ambivalence or the statement “I was not aware” is simply just not an option. With industry watchdogs now placing a closer magnifying glass on businesses in general, there is a strong ethos arising in companies that revolves around sticking to the rules and within the letter of the law, and no one takes this more to heart than the CFO.

The impact of this can clearly be evidenced in the nature of the relationship between the CFO, the CIO and IT management at large. Disposable IT budgets are a thing of the past. Every penny spent on technology needs to be motivated, accounted for and presented at a board level before being shared out.

In some instances, there has been resistance to this shift, but the forward thinking IT person knows that to nurture the relationship is to be able to win the budget. How is this being achieved? IT is no longer talking in Gigs and Bytes, but rather in business value and performance management. It is starting to put systems in place that are able to track and monitor performance and benefits, while still yielding business value.

The effective IT manager knows that the financial department is watching every line of expenditure and doesn't just promote the purchasing of technology but, early on in negotiating the benefits of replacement, already starts presenting financing options and potential leasing agreements for each deal.

The effective IT manager also knows that the CFO is a cautious individual, and that there are a number of departments fighting for the same slice of the pie, so they ensure that all the right ticks are next to the right boxes, such as BEE and sustainability factors of a deal, before being presenting to the CFO.

But the CFOs themselves are no longer individuals content to sit on the sidelines and wait for their IT managers to bring the latest technologies to them. They are becoming a more active force in making and identifying technology decisions. They are a more knowledgeable power around the boardroom table in these decisions and, while they still don't care about Gigs and Bytes, they do care about ROI, business value, performance management and productivity, reporting and monitoring. And more importantly they care about transparency and accountability.

The rise of the CFO does not mean the fall of IT, but rather the rise of IT as the value house it has always striven to be.

Stuart Cohen is a Sales Manager at KSS, a partner of Westcon and NetApp and a local company.

You can earn verifiable CPD points from this article – visit the Click2start Website to get your free verifiable points and click here for the manual on how to answer Accountancy SA CPD questions.