E-Commerce: How CFOs Can Seize the Initiative.

• Author: Zorko, Mark

EMERGING

technologies and practices give CFOs unprecedented opportunities to exert leadership, but they need to understand and manage the changes affecting their companies.

Today's chief financial officer has a multitude of broad and rewarding responsibilities, most geared toward value-added business growth programs, raising money or building business management infrastructure. However, the CFO's role has also become more creative in assessing today's ubiquitous electronic commerce challenges.

When you consider the frequency of problems stemming from flawed strategies or technology snafus, you realize how important it is for the CFO to have an active role in information technology implementations. This is also an opportunity to help CEOs and peers who traditionally focus on production, product development, marketing, etc., with an understanding of these business opportunities and challenges. CFOs also need to help the chief information officers work with user departments to manage major initiatives.

In addition, we've all read the startling statistics, published in well-known studies, indicating that information technology (IT) projects have a lot in common with mergers and acquisitions - more than half fail to meet expectations. The risk of failure may be even greater as we progress into the e-commerce world, where the pace of change is even faster than with traditional IT systems such as enterprise resource planning (ERP).

There is commonality between the risks created by so many M&A and IT initiatives:

* Today's business environment is complex and changing more rapidly than ever before.

* Shareholder expectations continue to ratchet up, which magnifies the rewards and penalties associated with business/technology decisions.

* The growing scope and scale of IT investments and their impact on the enterprise continues to grow.

* Most technology life cycles are becoming shorter, even as technology alternatives become more varied.

With system life cycles getting shorter and increasingly sophisticated, the opportunity/risk tradeoff is greater than ever.

How do you assess the risks and opportunities created by these technology shifts? Recent changes -- from mainframes to client-server architecture, from host computing to the Internet and Web-based technologies for workflow distribution and supply chain management have shifted the paradigms we previously used.

Nowhere is a CFO's understanding of IT more critical than in the area of acquisitions. Given the confidential nature of most acquisition...