Job Hunting

CFO Job Description: No Tech Experience Necessary

Headhunters think senior financial executives only need to know enough to decide whether to fund IT projects.
David KatzMay 2, 2001

If you’re a CFO, you don’t have to know much about information technology.

You just have to know enough to decide, for instance, whether or not a tech project costing hundreds of millions of dollars should be funded.

That was the paradox put forward by high-level headhunters speaking at a recent panel discussion on what chief executive officers are looking for in their CFOs.

In fact, said Stephen Scroggins at the CFO Rising conference in Atlanta last week, the issue of whether a CFO candidate has IT knowledge or experience “almost never comes up” in the executive searches he does.

In terms of priorities in filling a CFO slot, while technology knowledge would be “ideal,” added Scroggins, a managing director with Russell Reynolds Associates in New York City, “it’s the first thing to go. It’s never on the list that really matters.”

James Boone, president of the Americas for Korn-Ferry International in Atlanta, said IT has become too specialized a field for a CFO to think that he or she “can wear these two hats.”

At the same time, senior financial executives must know enough to turn thumbs down, if need be, on the funding of costly IT projects. “Obviously, that’s a very powerful role you have,” the headhunter told CFOs.

In a recently completed CFO search for a large aerospace corporation, Boone said, there was an internal candidate who did just that.

The candidate, a senior financial executive at the company, had no technological experience. But he convinced senior management and members of the company’s board to kill a global enterprise-resource- planning implementation.

The company had already spent $100 million and was expecting to spend a total of $200 million on the ERP implementation, the headhunter said. (Boone said the candidate eventually became a CFO. But he wouldn’t confirm whether the executive became the CFO of the aerospace company.)

Deploying his “keen financial acumen,” the executive “looked at the economics of the implementation,” and was able to make a decisive case even though he lacked IT knowledge, the headhunter told CFO.com later.

In general, CEOs’ scarcity of interest in their CFOs’ lack of tech knowledge marks a shift to a more strategic role for CFOs, said Boone. After the 1980s, when CEOs started to hire chief information officers to handle IT, technology and finance became more “siloed,” he said.

Referring to the CIO, Boone said that “having another ‘expert’ sitting in a chair next to you allowed the CFO to step back and become “far more involved in the strategies and the what- ifs”— and create a closer relationship with the CEO.

Henry Deaver, a partner in the Chicago office of Ray & Berndtson, noted, however, that the costs of IT projects have become so large that they demand the close scrutiny of finance departments. For instance, a client of his spent $1.5 billion to $2 billion on technology last year, he said. The client is looking for a senior executive, possibly a controller, just to oversee tech spending. The executive would report to the CFO.

The money being spent on technology is “too big for a CFO to keep running the other way,” Deaver said.