Double-duty CFO.

• Position: AT&T's Chief Financial Officer Alex J. Mandl - Special Report: Information Management - Interview

Many financial executives find leading a company's information management charge a role they'd just as soon decline. Here's how one CFO who accepted the challenge is shaking up the system.

FINANCIAL EXECUTIVE:

What are the differences between your role in information technology at Sea-Land and your same role at AT&T?

MANDL: At Sea-Land, the IT function reported to me directly. Information technology resources are one of the very fundamental aspects of that business. The business is hinged upon linking together the ships and trucks and trains and terminals that are all important pieces of that industry. An integrated global network supported by information technology provides the undergirding for making that an integrated transportation for making that an integrated transportation network. It's a critical resource. I spent a lot of time on it. Information technology was a cost function that provide systems throughout the various businesses. We had four geographically oriented divisions that had some level of autonomy, but there were enough commonalities to require a central information technology perspective.

At AT&T, the central information resource function, Information Management Services (IMS), reports to me. But, because IMS is a multi-billion-dollar central service function that contracts services to the various business units, it's very different organization. It's still a very critical function. We feel it's positioned well. Because most of it's in one place, we get the benefit of economies of scale and efficiency and we can leverage new technologies.

The critical part here is that this central group has to be competitive. The business units have the option to go elsewhere if that's what they prefer. IMS is not their captive supplier. The service has to earn and keep customer respect and build customer relationships every day in the market-place. So far, we're making good progress in that area.

Sea-Land was a $3.5-billion enterprise; AT&T is a $65-billion business. The various business units of AT&T represent $8- to $10-billion businesses. The scale is a very different one.

FINANCIAL EXECUTIVE:

Does the AT&T IMS division have a profit and loss statement like any other business unit?

MANDL: It in effect has a profit and loss statement. The division contracts out its services on an arm's-length basis. It's mostly a cost center in that it has specific targets it wants to achieve and it's held accountable for those. It makes a small margin on some aspects of its business.

FINANCIAL EXECUTIVE:

What's your level of involvement with IMS?

MANDL: I look after a number of things in this company, and this is only one of them. I'm actually spending a fair amount of time on that function because we've had a major evaluation across the company in terms of what should be the corporate overhead, or what we call the corporate center. I've spearheaded that over the last six or eight months. We're looking at what functions or resources should be at a corporate center and what should be out with the business units. It's a large, comprehensive effort with the idea that the corporate center should be very small compared to what it is today and the lion's share of the resources should be in effect linked with the business units.

As part of that study, the way we think about information resources is a relevant issue. We are therefore giving a lot of thought to how we position that set of resources throughout AT&T. We don't have the answer yet, but a likely path is, on...