It's easy to view the finance folks, especially the CFO up on top of the monetary food chain, as the people who are always whining about budget requests and project overruns. But a better way to look at things, suggests Chris Thomajan, Managing Partner with TechCFO, would be to try to see things from the CFO's perspective. In the process, IT can be better aligned with the business, be more likely to get what it really needs and cut down on stresses between IT and finance.
"When IT and finance work together, things go really smoothly, but a lot of that depends on understanding whose responsibilities are whose, so open communication and being upfront about needs and requirements are key," Thomajan says.
The first step in improving communication and cooperation between the two sides, though, may rest primarily with finance. The CFO and other financial professionals should define the budget and budgetary processes well, and set up clear expectations from the start so that IT won't wonder what money can be used for what, how to properly use budget money, and when to scale back.
"One common problem is when the head of IT thinks like a prince who wants to add toys to a kingdom," Thomajan cautions. "Some people in IT measure the worth of their department by how many shiny new things they have as opposed to how effective they are, and that's a disaster in the making right there."
What IT heads need to do more is to put on a business hat when they consider new purchases, implementations and the like. They need to ensure not only that it meets their needs but also the company's needs, and whether it is even a real need.
"What IT needs is incremental thinking," Thomajan says. How do I do more with what I have or how do I do what I'm doing now more cost-efficiently? We need to optimize what we have before we start adding things."
Another thing that will help make finance happy with IT is when the IT department not only seeks multiple vendor quotes for proposed purchases, but also makes sure to factor in follow-on spending related to the purchase, such as maintenance and the possible need to add more modules later to a product.
Also, it is vitally important that an IT department doesn't spend money simply because it's in the budget. Significant purchases should still be cleared with finance personnel even after budget approval to ensure that belt-tightening isn't necessary (which may mean putting off a purchase or killing it entirely) or to ensure that the purchase still meets the needs of the company.
"The economic and business climate is always in flux," Thomajan says, "just like technology is. So you should never assume that you can spend the money just because it's there. Money that doesn't need to be spent can go back into the company so that the money can last longer when times are tough."
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Footnotes: From "View from the TreeTop" Volume 3 Issue 2 March 2009