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 empathizing with people who don't share their same level of technical acumen. That being said, it is possible to work closely with, and even make decisions on IT projects without having an intricate knowledge of the systems concerned. CFOs should focus their attention on the business benefits and ROI of the technology being proposed without being bogged down by the technical details.CFOs faced with new technology offerings should ask their CIOs, 'what are the benefits to the business of implementing this change or buying this new system?'
More important than technical knowledge is the ability to ask the right questions and illicit responses in plain English from the head of IT.
2. Think themes not technologies
Rather than having laser-like focus on the technical details of specific technologies or products, it is a better approach for CFOs to think in terms of general topics and specific functionality, 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,"
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 Information Technology systems are essential. That being said, CFOs should guard against complacency and the expectation that the IT department will spoon-feed all the requisite information; "One fundamental danger that CFOs face is that of 'Leave it to IT'.
3. Don't believe vendor hype
While becoming too bogged down in detail has its own dangers, the popular adage that a 'a little knowledge is a dangerous thing' also holds true, especially when it comes to dealing with IT vendors. Finance directors and chief executives are often targeted by some of the major IT services companies and suppliers. These vendors know exactly which key buttons to press.
It's very important that finance heads don't take vendor claims on face value and when possible ask experts to scrutinize the proposals. I think that is a key point - don't believe the vendor's hype and if necessary find an independent source.
4. Be energy efficient
One area which merits special attention from the chief financial officer is so-called "green" or sustainable IT. Many companies focus on cutting carbon emissions by using energy efficient IT hardware (e.g. servers, desktops, laptops) where possible. Companies in every sector are recognizing the need to minimize their carbon footprint. Many progressive CFOs have already begun investigating carbon accounting particularly in light of government legislation aimed at Carbon Reduction.
5. No license to ignore
Software licensing might sound like something that is firmly in the remit of the IT department but according to the Business Software Alliance, there is plenty of scope for CFOs to be more involved with software licensing.
"I don't think this is an issue that in most companies is part of the CFO's agenda and therefore it's not necessarily given the prominence that it deserves. Yet this is an area of compliance and often the CFO is the person responsible for all compliance issues in a company. So there is definitely a role for the CFO.
6. Outsource IT services but not strategy
Consultants might help you through the process of developing an IT strategy but the hard work has to be the responsibility of the company's senior management including the CFO.
You do get some chief executives and finance directors who think they can buy an IT strategy from consultants but the strategy they eventually get will be unimplementable. Consultants might help you through the process but you have got to end up doing the work.
The idea that IT is a utility that can be "bought-in" might sound nice but it isn't realistic. "If you pay someone else to manage IT governance and strategy, you're basically paying someone else to do your job."
7. Know your financial tech
It might sound obvious but another area where it makes sense to have some specific IT knowledge is the finance departments own systems. Once you get down into finance systems then it's more important that there is some detailed knowledge in there. In fact the MIS systems in total, when you are talking about the HR systems accurate record keeping, then that is something CFOs needs to have a detailed knowledge of.
According to recent research commissioned by ecommerce technology maker GXS, ERP systems are also a potential headache for the CFO and should be monitored closely.
8. Don't make your CIO a plumber
Having overall budgetary control over IT projects is part of the CFO's remit but that shouldn't be to the detriment of the IT director or CIO's role. The first time the email crashes everyone expects the CIO or IT director to be the plumber. If you take a senior IT person on, you can't treat them like that. Sadly that is one of the issues - some finance directors would love IT to be a utility.
Several heads of IT recently that have seen their strategic role overshadowed by short-term fire-fighting. It takes a very skillful operator to turn that around.
9. Think outside the accountancy box
Just as some IT directors come from a technical background which didn't promote communication skills, finance chiefs may need to transcend the limitations of a career begun in accountancy.
As financial careers have evolved beyond the reconciliation of numbers, accounting professionals must be adept at communicating with a diverse group of people, have an acute knowledge of their company's business systems and make sound recommendations on technology-related investments.
IT requires fundamentally different skills than finance - skills which the finance heads must acquire to be successful in making tech decisions.
Accountants are great at linear extrapolations. How is bad debt going to perform? Let's look at bad debt for the last year. But the world doesn't always happen like that as there are structural changes happening. That is a real danger with IT because they will look at history and use that to predict the future.
10. Embrace the chaos
IT is not only about processes that support the business. It is also about using technology to disrupt old ways of doing business when necessary. This chaotic and creative aspect of IT is hard for some staff from a financial background to grasp, according to experts.
Consumer devices such as the iPhone, social networking and cloud-based collaboration tools are just some of the technologies threatening to derail established ways of doing business and should not be ignored.
Organizations trying to impose control over these chaotic technologies from the top down with pages and pages of policies and guidelines will fail, "Chaos is the new norm." Says Forrester Research
11. It's the business continuity, stupid
IT is essential to just about every business carrying out their day-to-day tasks. So if a server crashes or email goes down - or any number of IT disasters occurs - it can have serious consequences for the business. "Like the equivalent large-scale infrastructure projects, IT can go horribly wrong. And when it does, it generally means delays and costs well beyond expectations.
The CIO might be responsible for the IT systems but any disruption to the functioning of the wider business ultimately rests with the CFO and CEO. And that's why the CFO must pay particular attention to business continuity plans - especially as a result of any potential IT outage.
The CFO is responsible for the stability and the financial probity of the company. He or she would be absolutely slated if something happened to the firm in term of disasters, the million in one chance occurs nine times out of 10."