Rapid change is a part of the world of the IT professional. It always has been and always will be.
In today’s fast-paced ‘the Internet of Things’ world the intensity of that change has increased and with it, so has the responsibility of a key decision maker: the CFO.
Technology decisions are no longer just the domain of the usual IT suspects which traditionally includes everyone from the day-to-day practitioners all the way up to the C-suite. As technology plays an increasingly strategic role in the ability of a company to compete in a rapidly evolving business environment the CFO has become a major player in the process of determining the who, what, where, why and when of IT strategy and execution.
A recent post from Data Center Knowledge examines the shift in IT options and the havoc created by shadow IT and other developments that require a different set of eyes to make truly wise strategic business decisions.
More than just bottom-line Management
“This is where the CFO comes into the game. Beyond business applications, CFOs need to understand the quickly changing world of IT infrastructure and outsourcing. The more CFOs know about cloud computing and hosting options, the more they can influence IT decisions and help the CIO avoid a scenario of integration chaos and waste.”
This new dynamic has created the need for CFOs to expand their knowledge beyond just bottom line assessments of IT decisions. As if there is not enough on the plate of these C-level executives, the need to be aware of more details of the present IT climate is one that cannot be avoided by those financial players who will lead into the future.
So what are some of the most important elements that CFO’s should consider when making decisions about IT investments? Here are just a few that should be at the top of any list.
- Close ties to CIO/CTO – It’s unreasonable to expect financial experts to know everything about the world of IT which includes network, cloud computing of all stripes (public, private, hybrid), disaster recovery/business continuity just to name a few. A close working relationship with the party responsible for the details, the CIO/CTO will make these decisions stronger. IT decisions made in a vacuum could have lasting negative impact on a business. The more integrated these disciplines become the better the chances are that IT strategy will be sound from strategic, financial and practical points of view.
- Understanding the true cost of IT – CFOs are tasked with protecting the most important asset a company has: capital. Preservation of capital is critical for business success. In the past, this mindset has led to IT decisions that are based on lowest bid scenarios. While being financially prudent is still critical there needs to be a greater understanding of the actual value of IT investments than in the past. Basing IT decisions solely on cost can lead to issues in the future. These pitfalls could cost the company more than if they had invested a bit more up front in a solution that was designed to navigate the terrain more efficiently. CFOs need to understand IT value now more than ever in the past.
- Security – With the volume of IT hacks that have cost businesses not only money but hard earned reputation, CFOs must ensure they are not being penny wise and pound foolish. IT decisions that save money could leave gaps in protection of valuable business data. Oftentimes the protections gained by working with larger vendors that have the knowledge and resources to provide true security are worth the additional cost. Unfortunately, the world is not becoming safer but rather it is the opposite. With that reality in plain view, CFOs have to be able to weigh the true cost of protection of critical business assets versus exposing them for the sake of short term savings.
- Compliance – HIPAA, PCI, SOC (1, 2, and 3), Safe Harbor and other compliance requirements are essential to a strong IT solution and CFOs are going to need a working knowledge of these requirements to make sound business decisions. What makes this component of the CFOs job even more difficult is that there are constant changes that need to be maintained. Finding a provider that can ensure compliance can be a major factor in any IT decision making process.
- Flexibility – As a rule in today’s business world, flexibility is essential to staying competitive. In IT that may be even more relevant. As a result, CFOs may have to abandon the ‘this is our budget until next cycle’ approach and assign IT spend on an ‘as needed’ basis. More traditional CFOs may find this the most difficult reality of today’s IT space but not being able to act on critical IT needs due to strict budget constraints could end up costing a company dearly. The opportunity cost of implementing or not implementing critical technology needs could be catastrophic to a business so CFOs need to maintain flexibility.
This is not an exhaustive list by any means. CFOs have more to consider and carry more power in the IT buying cycle than ever before. Technology will drive most industries and individual businesses in the future. CFOs that are not aware of what is driving business from a technology perspective are at risk of making poor decisions for both their company and their career. Are you prepared for what the future holds?
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