Thanks for the timely caution in “Putting People First” (April). It’s now dangerously easy to gather reams of data and crunch it through newer, more powerful tools as we rush to keep up with the newest technology offerings. This generates plenty of information, but we need people with insight at the wheel.
The software’s cost is often a mere fraction of the true cost of producing insightful, business-relevant information. It may cost several times the application’s sticker price to get the right people with the right capabilities operating the system. If we miss that step, the best-case scenario is we receive useless information. The worst-case scenario is we receive misleading information that sabotages decisions.
Pass the MFA
I completely disagree with the notion suggested by eBay that small businesses will be hurt by the Marketplace Fairness Act (“Online Retailers Feel the Heat,” April). Modern technology available freely on the Internet (taxcloud) has eliminated the historical burdens originally cited by the U.S. Supreme Court 45 years ago. The MFA simply allows states the option to require collection of existing taxes citizens are evading (knowingly or not).
When sales tax goes uncollected, state and local governments are forced to compensate by mandating further cuts to vital services, or raising property or income taxes. By requiring states to modernize and simplify, the MFA represents progressive action, eliminates bureaucracy, makes state and local governments more efficient, and makes sales-tax collection and remittance easier for retailers and consumers. It’s time to update our sales-tax laws to recognize the achievements and efficiencies provided by the Internet. I urge Congress to pass the MFA.
Sten R. Wilson
Point of View Farm
Bangall, New York
A Happy Reader
I like the changes to CFO magazine that debuted in your April issue. The overall presentation is cleaner, crisper, and eminently more fun to read. Thanks for making a great publication even greater.
US Bank Commercial Banking Group
I’m completely in sympathy with the idea that companies should disclose how much they spend on political lobbying and who they spend it on (“Show Us the Money,” April), but the article’s claim that the decision in Citizens United v. Federal Election Commission has not increased PAC contributions seems willfully blind. PACs have proliferated and contributions have skyrocketed since the decision, and where do people think the money is coming from? As rich as he is, it’s not all coming from Sheldon Adelson.
Helping the Competition
The problem with the automated hiring system described in “No Résumés Required” (April) is that it will automatically eliminate anyone who has worked as a contract employee for a company, and has received a 1099 rather than a W-2. Any company that uses this system will be looking only at people who have held or are holding full-time positions. However, contract employees often stay ahead of trends, and have to be more competitive than people who have held full-time jobs. Without the ability to fully research a job applicant, organizations may miss talented people, giving their competition a leg up.
Cy-Quest Media Services
San Antonio/Uvalde, Texas
Figuring Out Who’s the Boss
Where IT should report in the chain of command hinges on two factors: 1) the chief executive officer’s attitude about the role technology plays in the strategic direction of the company, and 2) whether the chief information officer is a “strategic” thinker; that is, does the head of IT think outside the box (“So, You’re the Boss of the CIO. Now What?” March)? If indeed the CIO is a strategic thinker, the more access he or she has to the CEO, the better.
If the CFO is also a strategic thinker, then the “We are all in this together” comment is on point. That attitude is consistent with the idea that the management culture is collaborative, and the exact reporting relationships become less important.
Philip H. Grantham
Curtis Hall Partners
I’m shocked at the naiveté displayed in “So, You’re the Boss of the CIO. Now What?” Take, for example, PwC principal Chris Curran. Were I hiring consulting services, I sure wouldn’t want such sophomoric advice as this: “Some CFOs believe every dollar should have some sort of ROI. Not true. When you’re experimenting, piloting a new initiative, there may be no ROI.”
If the objective of the experimenting or piloting does not offer a reasonable ROI, it shouldn’t occur. Of course, there is a “research function” in business. However, IT should be far more pragmatic — applied research, targeting a business objective.
The naiveté continues with NetSuite CFO Ron Gill. “Sometimes the CIO will say the phone system needs upgrading. The CFO will ask, ‘What will we get from the upgrade?’ The CIO says, ‘Phones.’” Gill then states, “Some IT spend falls into that bucket.” But, in fact, that CIO should be terminated for incompetence. If the new phone system doesn’t improve operations or reduce costs, again, the investment should not be made.
More naiveté comes from Karoline Mello, vice president of finance and technology at The College for Financial Planning, who states that there are some IT jobs that drive revenue and jobs that negatively affect the bottom line. If systems maintenance only negatively affects the bottom line, don’t do it. By contrast, if business continuation is important, then systems maintenance positively affects the bottom line. Mello then states: “In accounting, there are jobs that increase net income by, say, improving accounts receivable, and essential jobs that reduce income, such as GAAP compliance.” If GAAP compliance only reduces income, don’t do it. Again, by contrast, if not in GAAP compliance, there is some penalty, and if the penalty is greater than the cost, there is an ROI.
In today’s competitive world, management with such naiveté will not long survive.
Don R. Sherwood
The proper custodian of the complete gamut of information technology, including the ERP, is the CEO, not the CFO. I constantly encounter organizations where systems run by the engineers — the operational computer-based systems in manufacturing, the warehouse, the mine, and so on — have no integration or correlation with the systems run by accountants. The only way the full value of integrated information systems that span the business from end to end can be achieved is if the final accountability sits with the CEO, and the CFO is but one of many customers for the ERP and finance.