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If your board considers IT important (and it does), CFOs need to learn the language of IT or risk being left out of the conversation about the future of business.
Timothy Chou, CFO.com | US
August 20, 2012
As a member of a public company's board, I was fascinated to see the results of a 2011 survey conducted by the National Association of Corporate Directors. Among other matters, the survey asked: "What is the importance of IT to the future of the company?" With more than 200 public-company directors responding, 99% said that over the next five years IT would have a significant impact on their organization. Thirty-six percent said IT would improve operational efficiency; 30% said IT would convey competitive advantage, and 19% said IT would transform the company.
And while all the board members surveyed talked about the importance of IT, only 16% of the participants had been either a chief information officer or a senior IT executive earlier in their career. So what does this mean for CFOs?
Learn the Language
Every so often I have the opportunity to counsel young MBAs from a variety of prestigious universities. The ones who come to me have no desire to follow their more senior classmates into the worlds of private equity and investment banking. They see the promise of technology, but they're concerned that their lack of a computer-science degree will prevent them from taking advantage of that promise.
I tell them that today's challenges are not technological. We have a lot of software and hardware technologies and, yes, they will need to be improved in many ways. But the key challenge is how to apply the technology. The only way to apply the technology is to be able to understand the problems within a business domain and then figure out how to use technology to solve those problems.
A few years ago, a major university asked my opinion of their computer-science curriculum. It wanted to give its students more domain understanding. I told the university that that was an admirable goal but wondered how it proposed to teach its budding computer scientists about poultry management, retail banking, insurance underwriting, oil-exploration logistics, and pharmaceutical-contract research. There just aren't enough hours in the day. The answer isn't to provide computer-science students with highly specialized domain knowledge in a variety of industries; the challenge is to teach our young business leaders how to type. In other words, they need to learn about computing. They can't sit around waiting for the computer scientists to develop domain understanding in the hundreds of domains to which computing is applicable. And no, you don't need to learn how to program, but computer science cannot be a foreign language to you. Or, as I tell many MBA students, if you're going to work in France, you better learn French.
If your board of directors thinks that going forward IT is going to have a significant impact on the business (as almost all do) or has the potential to absolutely transform the company (as almost a fifth do), you're going to need to learn French- the language of IT - if you're going to be part of the team that leads that transformation. In order to learn the lingo, talk to your senior technology people, or go outside and learn the language of cloud computing. Not the programming languages, but how the companies that already are information companies (Facebook, Twitter, Google, FedEx, Starbucks, etc.) use technology to accomplish their missions. Ask your best technical people to give you a tutorial. Ask dumb questions, but learn the language.
If you don't, the discussions that will ultimately drive your business will all be Greek to you.
Timothy Chou teaches cloud computing at Stanford University. He is the former president of Oracle On Demand and the author of Cloud: Seven Clear Business Models.