VideoJoseph Anichebe knows which side he's on. Despite a hybrid title — IT CFO for the investment banking arm of UBS — Anichebe's allegiance, first and foremost, is to finance.
His team of more than 50, which oversees billions of dollars in annual IT spending at the Swiss bank, works with IT to monitor expenditure, build projections and assess new projects. "My job is not to get in the way of IT delivering solutions to the front office," he says. "It's to make sure that we're clear on how much it costs, so that managers can make informed decisions. If we do that, our goals are aligned." But it's no bad thing for a "healthy tension" to exist between finance and IT, he adds. Anichebe has been in his current role for two years, but for 20 years has held various posts at the intersection between finance and IT, both through appointment and through circumstance. Along the way, he's come into contact with a select group of others who have carved out a similar niche. "They've worked for me, and I've worked for them," he says. "It's a small world."
Small, but vital. Few corporate relationships can become as strained as that between finance and IT. The stubbornly high number of IT projects that are completed over budget, late or lacking important capabilities — and sometimes all three — is a key source of friction. It doesn't help that both functions speak their own highly specialised language, which is often unintelligible to other parts of a company.
That's why executives such as Anichebe are becoming more prominent, bridging the gap between the two adversarial functions. Like Anichebe, most of these intermediaries have a finance background.
London-based recruiter Harvey Nash, known primarily for its expertise in IT, launched a finance practice last year in response to the blurring of the boundaries between the two functions, according to Carol Rosati, head of the firm's CFO practice. "Companies are looking for a more sophisticated use of their systems, so they're getting finance more involved to make sure that the right information is being generated," she says. "There is a premium to be paid for a CFO or controller who can manage major implementations."
In a global survey of 450 directors released in March by Deloitte and Corporate Board Member magazine, nearly half of the respondents said that they didn't receive appropriate business plans at the outset of IT projects, or suitable updates during implementation, or both. It makes sense, therefore, that organisations are despatching finance managers to gather information about IT in the same way that they already do for most other capital investments.
What's more, with technology now woven into all aspects of operations, IT will be discussed less and less as a subject in its own right. In the Deloitte survey, only a quarter of directors said that IT was addressed as a standalone topic in the boardroom. And on the increasingly rare occasions that IT is on the agenda, the CFO is almost as likely as the CIO to lead the discussion. Bear in mind, too, that just over half of companies surveyed actually have a CIO, and that this person's interaction with the board is generally on an ad hoc basis.
Meanwhile, a survey last year of nearly 300 senior executives by the Economist Intelligence Unit, a sister company of CFO, found that a third of the respondents thought that standalone IT departments would not exist in five years' time.
Technical Difficulties
And so it falls to finance to measure, monitor and manage IT for the benefit of the board and other senior executives. At UBS, Anichebe is currently refining how the bank measures IT's total cost of ownership (TCO), a task that he's performed in many of his previous roles. When entering new markets, the cost of IT applications and infrastructure necessary to support particular products can have a significant impact on a venture's profitability. The TCO project gives senior managers certainty by making these costs as transparent and predictable as possible. Anichebe's experience has shown that a main source of friction between finance and IT "has come from IT teams building a Rolls-Royce system when a Mini Cooper would do," he says.
No Bells and Whistles
As Stuart Kilpatrick, group financial controller at Elementis, a £396m (€579m) speciality chemicals group in London, sees it, "Most IT systems are designed to give users choice, but sometimes too much choice can be a bad thing." Kilpatrick recently helped steer the company through the rollout of a new JD Edwards system that coincided with the opening of US and European finance shared service centres.
"We spent more money on preplanning at Elementis than I ever have before, making sure that everything worked on day one," the controller says. "Finance got involved early, setting parameters for what was critical to the business." By focusing on key system requirements, and not allowing all of the available bells and whistles to distract project teams, finance managed users' expectations and ensured a smooth rollout.
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