Finance and IT: a need to work together; While their roles are very different, CIOs and CFOs say that more than ever, they need to cooperate and plan together to cost-effectively deliver systems and applications that companies need to thrive.

• Author: Marshall, Jeffrey
• Position: Cost management - Chief information officer - Chief financial officer

Yin and yang, heavy metal and Mozart: The interpersonal dynamics of information technology (IT) and finance officers have often been portrayed as a clash of opposites, starting from their formative days as pizza-craving programmers or buttoned-down accountants.

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If you talk to chief information officers (CIOs) and CFOs today, however, that cliched vision evaporates. They are seasoned professionals, intensely aware of the importance of finance and IT talking and walking together in the face of ever-escalating demands for corporate systems to provide everything from automated financials and procurement, to real-time links to global offices, to protection against a myriad of viruses and other operation and security threats--and do so cost-effectively.

"There is clearly a need for financial executives and IS (information systems) executives to come closer together," says Ed Trainor, CIO of Paramount Pictures and the 2003 president of The Society for Information Management (SIM). "There is a mutual desire to do that, and we all can do better." FEI is co-locating its Forum on Finance and Technology with SIM's annual event, the SIMPosium, in Chicago this month, giving top finance executives and CIOs an opportunity to rub elbows and compare notes.

The evolving relationship between CFOs and CIOs doesn't date back that far; as recently as the 1980s, relatively few companies had designated someone as a CIO. More than likely, the top technology manager at that time ran a data center or some other back-office function, and didn't have the C-level interaction with the CFO, COO or CEO that many do today.

And if you go back more than a generation, when computer projects were distilled from stacks of IBM Corp, punch cards and programmers still sported horn-rimmed glasses and pocket protectors, automation and finance were still mostly in separate worlds.

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"When I started, we were still in a mode of transitioning from manual general ledger entry to a general ledger package, which then interjected the first direct relationship with IT in support of an application," says Todd R. Stephenson, CFO of Lincoln National Life Insurance in Fort Wayne, Ind., a 27-year veteran of the insurance industry. "With the interface of that data into the general ledger, the accounting folks became more computer-literate."

It's been onward and upward from there for most organizations, yet over the years the stories have persisted about companies that still had IT and finance in separate "silos"--and some where the IT group was seen as insufficiently aware, or concerned, about the cost of systems. In such cases, finance came to view IT as one of the dreaded corporate bogeymen: a cost center.

"Where I've seen silos, it's where [IT] was seen as a cost center. But what ends up happening there is you get a very disjointed strategy," says Michael Doyle, CFO of EasyLink Services Corp. in Parsippany, N.J., and a former finance executive at companies including Pepsi-Cola Co., AlliedSignal, Cendant Corp. and Dun & Bradstreet.

In some, mostly smaller organizations, there have been situations where the CFO has taken charge of buying applications for finance, apparently because finance either didn't trust or respect the IT group enough to involve them. "I would have a real issue with that," Doyle says. "Some ERP [enter-prise resource planning] systems might not accommodate all of a CFO's needs, but you still need that link to the CIO."

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Paramount's Trainor is similarly taken aback by the notion of the CFO buying finance applications and bypassing IT. "I've never experienced that situation," he says. "That means you'd be talking about a very decentralized function; it sounds illogical. In that kind of instance, you are building silos. There would be duplication of information. There would be redundancy, and more expense."

Doyle chuckles at a reference to the CFO as a "Dr. No" taking a scalpel to IT budgets. "The challenge we face is the tendency for the systems folks to say, 'We have to have best-in-class for everything.' I've faced that as a divisional CFO, and here [at EasyLink]. We have to make sure that the IT activity and the resources match well with the strategy.

"Sometimes it's a question of how often you upgrade," he adds. "You don't always have to have best-in-class." Corporate security costs, he notes, keeps coming down, thanks in part to vendor competition.

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"What's important is that IT and finance are in a partnership to improve efficiency and bring down costs," says Elizabeth Monrad, CFO of TIAA-CREF, the New York-based pension and mutual fund giant. "What may have happened in the past was that IT was asked to build what I would call 'intergalactic' homegrown systems aimed at solving all the information needs for an organization. When that software was homegrown, there was often a high failure rate or significant cost over-runs. By the time those packages were ready, the organization's needs may have changed, and that's why IT sometimes had a reputation for being difficult to control."

And it's too facile simply to blame the IT managers for escalating budgets, says Stephenson. "Over time, those [cost] discussions have included the business process owners for the systems application or hardware tools; they also have opinions," he says. "As much, if not more, it's been the user area that has a desire for more sophisticated hardware, not the IT folks. Today, the IT folks are more likely to partner with finance to ensure that the long-time cost of ownership is something that is considered when systems are being developed."

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CFOs and CIOs interviewed agreed that the overall jump in computer literacy in the past couple of decades--facilitated by the personal computer--has helped IT and finance communicate better. "I've seen a lot of evolution because...