Taking business IT finance and planning to the next level.

• Author: Barnier, Brian G.
• Position: TECH STRATEGY

"What could we have done differently and when?" That's the question too many chief financial officers face when looking back over the disappointment of their information technology spend. Though the technology in their pocket or on their desk changes quickly, the feeling that "We're not getting enough value from IT" doesn't.

The Technology Issues for Financial Executives: 2011 Annual Report, by Financial Executives Research Foundation and Gartner, notes that only 30 percent of respondents feel information technology delivers on what its mission should be. Yet about half (47 percent) view IT as being strategic.

More distressing is that excellent guidance exists to help avoid these problems. So the question is why aren't people taking advantage of the guidance to avoid the pitfalls? If they did, they'd get more business benefit from IT.

At a recent executive briefing on business-IT management, one energetic participant shared his story. "It all happened to me," said the participant. He explained he was in IT at the time and watched the project go off the tracks. He sounded the warning for months and was finally removed from the project. The team charged ahead, and the project failed, as expected, at a cost of nearly one-year's earnings.

The chief information officer and CEO were both fired. As the situation unfolded, the CFO was caught in the carnage as the company was sold at a bargain price. This danger grows the more CFOs become directly accountable for IT The Technology Issues report reveals that 42 percent of IT departments now report to the CFO.

CFOs feel the pain in another way, as they step up to explain earnings problems due to IT-related business risks materializing. There, the task is to explain the "bad thing" in such a way that the problem is not systemic and thus the company's share price shouldn't be affected.

The CFO is forced to ask the CIO and the rest of the executive team: "What was the root cause? When did we get the warning signs? Why didn't we act enough? Why won't it happen again?" The CFO isn't alone--the board will (or should) ask the same questions.

In analyzing reports of business-IT value creation and destruction, patterns emerge. It's fascinating to see how frequently root causes occur. The following zeroes in on the perspective of the CFO on two opportunities to fix these root causes: better tools and techniques and improved organizational interaction.

A second insight that emerges is the need to look at root...