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A new breed of executive -- equally fluent in the ways of finance and IT -- is bridging the gap between two traditionally adversarial roles.
Jason Karaian, CFO Europe Magazine
July 2, 2007
Joseph 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.
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.
Also key to the success of the project, Kilpatrick says, were the dual IT-finance specialists assigned to the various tiers of steering groups overseeing the implementation. Finance staffers with "a natural affinity for systems" were prominent, as were a few IT employees with some financial training, a much rarer breed. "They're worth their weight in gold during these situations," Kilpatrick notes.
But having a foot in both camps is never easy. "It's surprising how heated the exchanges between finance and IT can get," says Heather Blackwood, a UK-based interim finance executive. Blackwood, who has experience in senior roles at several food and drinks groups, including Allied Bakeries, Threshers and Seagram, in addition to her current assignment at London's Royal Free Hospital, says "Half of my roles seem to be acting as the intermediary, smoothing feathers after arguments between finance and IT."
"Finance people expect their systems to work, but they don't often put the effort in to get them that way," she notes. "It's about articulating what you want, because systems deliver exactly what you ask for."
As at Elementis, early and intense collaboration between finance and IT is critical. "It's only when you tackle the base assumptions that you find where it all goes wrong," Blackwood says. "It often takes somebody new, a director in charge of both areas, to examine those assumptions."
That was the thinking at Gunnebo, a SKr6.7 billion (€730m) security products group based in Gothenburg, Sweden, when it hired Hans af Sillen last year. Af Sillen spent 15 years working his way up the finance ladder at industrial group Atlas Copco, and — unusually — joined Gunnebo as its first-ever CIO.
Although he considers himself a "finance guy," af Sillen is no stranger to technology. "I've been involved with ERP, of course, changing, adapting and implementing systems. I've also taken the lead on business intelligence projects. I've headed CRM implementations, quotation tools and web tools for ordering and delivering products. I've also dealt with infrastructure issues, like wide area network projects, collaboration platforms and these sorts of things. I've had a bit of exposure to IT," he deadpans.
After dozens of acquisitions, Gunnebo was left with a jumble of poorly integrated systems, prompting a major restructuring that coincided with af Sillen's arrival. At the end of this year, the group will pare itself down to around 60 companies running more than 30 technology platforms. Within three or four years, af Sillen's roadmap calls for a single, homogeneous IT environment, "basically scrapping everything that Gunnebo had before," he explains.
Securing the Future
With his finance background and fresh perspective, af Sillen's approach to Gunnebo's IT overhaul was different from that of a pure technologist. For instance, choosing one of the widely used systems from SAP or Oracle would have been the safest route, but af Sillen chose "a stronger and more economically efficient" system based on tools from Microsoft.
The "rather unique decision" to go with Microsoft for ERP, portal services, business intelligence and other functions will give the company "the biggest bang for the buck," he asserts. For a company like Gunnebo, which is not particularly capital-intensive or transaction-heavy, traditional manufacturing-focused solutions would be "overkill" and risk overcomplicating the transition.
In January, af Sillen took over as CFO at Gunnebo, while retaining his duties as CIO. As with IT, he is now drawing up a restructuring roadmap for finance. Given his financial background, but recent history in IT, "finance probably thinks I'm an IT guy, and vice versa," he jokes.
Although the middle ground between finance and IT departments remains a lonely outpost, it is likely to attract more settlers as pioneers like af Sillen and Anichebe continue to prove their worth.