Over the years, I’ve had the benefit of being both the CIO and CFO of publicly-traded companies. What I saw in practice, and see with clients as a consultant, is that CFOs can make all the difference to an important IT project’s success.
My firm uses many of management consultant Peter Drucker’s insights to help companies with change initiatives, such as large hardware or software implementations. And these types of initiatives are critically important in today’s rapidly changing business climate. To be successful, they need to be managed productively through the company’s “power structure.” The CFO is often in an ideal position to help make this happen, because he or she usually has two essential ingredients: an independent perspective and a high degree of organizational clout.
Too often, CFOs are not used strategically enough with key IT initiatives. While they are often involved with budgeting, their greater value as an independent advisor is often missed. When this happens, all they can do is keep score, rather than help the company play to win. Taking full advantage of CFOs in large IT initiatives is vitally important, given historicallyfrightening statistics, which have not improved over time:
- Seven in 10 technology projects are considered failures.
- Nearly one in five projects will be cancelled entirely.
- 88 percent of projects exceed deadlines, budget or both.
CFOs can help reinvention initiatives succeed by advising the CIO and other executives in three critical areas: Single strategic vision, integrated and dynamic planning, and shared business-wide project management approach.
Single Strategic Vision
The most common pitfall related to managing large reinvention initiatives is failing to establish and maintain a single living vision across stakeholders. CFOs can play a key facilitation and tie-breaking role in this area because of their broad perspective and organizational power. The conventional project management approach usually takes too much time establishing a vision and not enough time keeping it relevant, which—in conjunction with a CFO—can often be made more productive. As a result, business-IT alignment is a perennial issue and often gets worse as projects proceed over time. The CFO can be the CIO’s best advocate and coach.
Integrated and Dynamic Planning
Project planning usually takes too long, is too detailed in the wrong areas and often does not adequately integrate the knowledge of key stakeholders. Project outcomes can be significantly improved when organizations formally integrate the human elements (including personalities and conflicting responsibilities) of key stakeholders into project plans. This is an area that CFOs have excellent experience in, when different divisions and functions compete for resources and implement non-technology initiatives. Often, this needs to be a dynamic exercise, integrating the best thinking in real time, while at the same time keeping key stakeholders on the same page and moving in a single direction.
Business-wide Project Management Approach
Having an integrated project management approach between IT and non-IT stakeholders may seem like common sense, but it is rarely done in practice. This creates multiple disconnects, driven by the lack of a shared process and common language. CFOs are often skilled at cutting through the jargon and unifying various parts of the company via their reporting, financial statement, and investor relations activities. They can provide IT projects excellent guidance on how to do the same when important reinvention initiatives are being communicated and managed.
Productive CFO involvement is often a missing link in large, IT-heavy reinvention initiatives. The truth is, in most companies, “one size fits one.” Every company and project is different because stakeholder personalities and priorities are different. Yet, with reinvention projects, systematically changing the approach, and the role of the CFO, can turn organizational reinvention into sustainable competitive advantage.