Tech money: what to ask before making an IT investment.

• Author: Stein, David
• Position: Business industry

CFOs overseeing IT investment strategies have a new name to describe their responsibilities: technology evangelist. According to a survey of 1,275 global executives commissioned by Accenture and Oracle, 67 percent said their CFO strongly champions the use of emerging technologies to deliver innovation and growth within the finance function.

It's a title not to be worn lightly. With many IT departments now reporting to the CFO, an increasing number of people are counting on senior finance executives to lead their own function's new technology investments and those of the entire organization.

How can CFOs, whose technical knowledge is often not as strong as that of their IT colleagues, prepare themselves for these critical decisions?

The starting point must be a holistic assessment of how IT projects can work together to achieve a company's strategic goals, says Jeanne Ross, director and principal research scientist at the Center for Information Systems Research at MIT Sloan School of Management, who's written on the intersection between technology and finance.

Technology should do two things: help standardize processes and integrate data across those processes. For finance executives who fail to focus on projects that accomplish both of these requirements, the risk is sub-optimization. "You could end up with something very, very cool that is totally unimportant," Ross says.

In making IT investment decisions, here are some key questions for finance executives to ask.

What Are Your Company's Critical Capabilities?

Choosing the right technology solutions starts with understanding your principal business strategies. For example, if forming a comprehensive customer relationship is important, then every IT project should align with the strategic goal of integrating customer data.

This may seem like common sense but, according to Ross, many companies haven't articulated--and then followed through on--this simple premise.

UPS is among the companies that have, Ross says. In the early 1990s, the parcel delivery company realized that information about packages was just as important as the packages themselves. In response, the company built a single database housing all of its package data. Since then, UPS has made sure other projects complement this core IT strategy.

Once capabilities are identified, a project's particulars can be considered, says Byron Patrick, CPA/CITP, CGMA and CEO and co-founder of Simplified Innovations, a technology service...