CFO IT - Spring 2004 Issue

The Great Divide

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As a model for just such a CIO, Rosenberg points to Guy Abramo, who as executive vice president and chief strategy and information officer for Ingram Micro Inc., the world's largest wholesale distributor of computer products, serves as chief architect for both the company's strategic business and technology direction. (CFOs might be interested to know that before becoming CIO, Abramo headed up worldwide marketing, giving him a big-picture view that some CIOs lack.)

Co-Equal Billing
CFOs may be relieved to learn that the onus is not solely on them. "Today, CEOs are far more interested in how information affects the strategy of an organization than in the past," adds Stephen P. Mader, president and CEO of executive search firm Christian & Timbers. "They want IT woven throughout the organization, and they are showing more sensitivity to CIOs, to having them work with CFOs and other senior managers."

This tends to be truer in some industry segments than others, notably media and consumer goods. "Companies that routinely turn on a dime need to know in a hell of a hurry what's going on in consumer trends so that managers can make quick decisions regarding, say, logistics or the supply chain. Margins can be greatly impacted," says Mader. The input used to make those decisions has to come from both IT and finance working in concert, he says.

Despite sounding like an oxymoron, co-equal is a term that many experts pull out to describe a proper relationship between the CFO and CIO. That can be difficult to achieve, particularly when one reports to the other, but companies have found ways to foster such a relationship.

At Rockford Health System, for example, CIO Dennis L'Heureux was given a say in picking a new CFO. "I recommended finding someone who appreciated the strategic value of IT, understood benchmarks for IT. Someone that I could work with every day," he says. Both executives report to the CEO and work well together, says L'Heureux.

Belt-tightening is a perpetual exercise at the $400 million—plus company. Even so, working with the CFO, L'Heureux has been able to add new technologies. "Recently, for instance, we put in a time-and-attendance system, which increases our capital expenditure and operating and maintenance budgets, but it is expected to reduce payroll expenditures by 1 to 2 percent."

L'Heureux praises both his CEO and CFO for their grasp of technology. "I don't have to educate them," he says, "because they understand the value, and they know that you can't realistically slap an ROI analysis on some kinds of projects."

As the former CIO of Federal Express and AT&T, Ron J. Ponder, now CIO of $20 billion WellPoint Health Networks, in Thousand Oaks, California, has witnessed firsthand the many vicissitudes in the CIO-CFO relationship. While Ponder does not report to WellPoint CFO David C. Colby, he says they work closely together. In fact, they have achieved what many might consider the ultimate aim of a CFO-CIO partnership: budget-conscious strategic advantage. Colby, whom Ponder describes as "technology literate," has been working closely with Ponder to achieve ROI from technology investments and ensure that they correspond with business objectives. "David worked really hard at helping me integrate the three-year technology plan into our three-year business plan," explains Ponder.

That close coordination, Ponder says, has enabled WellPoint to implement ambitious applications that will put the company significantly ahead of its competitors. In January, for example, WellPoint announced a $40 million program designed to get physicians to stop writing prescriptions and instead to issue them electronically, a major cultural shift that doctors have been reluctant to make.

"We're working with Dell, Microsoft, and Cap Gemini Ernst & Young to jump-start E-prescribing and provide doctors with the tools they need to do this," says Ponder. The program launch comes at a time when WellPoint is merging with another $20 billion health-care company, Anthem Inc., to create the largest company of its kind in the United States. Ponder argues that a vital, mutually supportive CIO-CFO relationship is one of the cornerstones of such efforts.

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