Tech Know-how Brings Career Success, CFOs Say

It's more beneficial than expertise in operations, law, and sales and marketing, according to a Robert Half survey of finance chiefs. That wasn't t...
David McCannAugust 27, 2008

Being a successful CFO requires finance and accounting adeptness, but what else is needed? Working familiarity with operations, law, and sales and marketing surely could help — but information-technology expertise trumps all three of those, according to poll results from Robert Half Management Resources.

One-half of the 1,400 respondents — all CFOs — said IT knowledge is “most beneficial” for their careers, after accounting and finance wherewithal. That response beat operations by five percentage points; legal was next with 37 percent, and sales and marketing registered 26 percent. (The numbers add up to more than 100 percent because those polled were allowed to give more than one response, despite the use of the phrase “most beneficial” in the question.)

The top-dog status of IT represents a quantum leap from 2003, when Robert Half posed the same query to CFOs. Then, only 28 percent of respondents said tech was most valuable, 18 points fewer than operations scored.

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The results of the new survey reflect companies’ increasing investment in IT systems and e-commerce capabilities. “IT was important back in 2003, but more so today,” says Paul McDonald, executive director of Robert Half Management Resources. “It represents a larger share of the capital budget, and as a result of the higher spend, it’s become more impactful to the bottom line. Cost overruns are prevalent, and many CFOs are tasked with keeping IT projects on time and on budget.”

Today’s heightened regulatory environment compared to five years ago is another factor. CFOs are asking for more and better internal controls, which requires more support from IT systems, McDonald notes.

Not having IT knowledge can significantly limit career options. “The difference is night and day between one candidate for a CFO job who has experience with SAP, Oracle, J.D. Edwards, Lawson Software, or Great Plains Software, and one who doesn’t,” says McDonald, whose company places finance executives in interim roles.

For a finance executive, “IT knowledge” usually doesn’t mean programming expertise or even hands-on experience operating systems. “It’s just an understanding of what technology and communications are available, and an ability to think of how you want it to flow,” says Randall Durling, director of international finance for The Boeing Company and a key participant in its ongoing, massive project to connect its patchwork of systems that arrived via acquisitions.

“The key, for us, is the straight-through processing of transactions and no re-keying of data so that it flows throughout our trading, accounting, ERP, and procurement systems,” Durling says.

But while CFOs do not necessarily need to know the technical details about how such an integration is accomplished, they do need to oversee a core discipline other than finance in order to maximize their success, according to Richard Block, a CFO consultant with executive-services firm Tatum, a professor at Babson College’s graduate business school, and a co-author of articles about spreadsheets. That’s particularly true at small and mid-sized companies, he adds.

“For a company to be successful, the functional parts have to work well together,” Block says. “Someone needs to figure out what makes sense for all of it to work, and finance is often a place where the proverbial buck really does stop.”

Overseeing inter-discipline coordination is not always the CFO’s sole responsibility, of course. Block notes that, for example, the company president might have key skills in sales and marketing or R&D. “When that happens, maybe you have a wonderful product that’s selling so well and making so much money that you don’t need a CFO to be sophisticated in other areas,” he suggests.

But Block says it’s not possible to say generically what area is most helpful to CFOs’ careers, because it depends on the company’s particular circumstances. For example, at a company that is hiring and, perhaps, terminating employees much more quickly than its competitors, human resources might be a good area for the CFO to oversee.

“When IT becomes critical is when a company is morphing into new areas,” he observes. “Acquisitions or new products may demand that the company look and act differently. Usually sales and marketing starts acting differently first, but in the best-case scenario the IT activities come first. When that is the case, the CFO or whoever is leading it is a visionary. But if finance is saying ‘no, we’re spending too much money on this,’ then the processes don’t change, and the company is out of control.”

At companies like Amazon and Dell, the IT function is such a crucial part of the operation that the CFO must have an understanding of IT, Block notes.

For companies generally, “On an importance scale of 1 to 10, IT is probably never lower than a 7,” he says. “But in some cases it might be an 11.”