Top technology issues for CFOs.

• Author: Graziano, Cheryl de Mesa
• Position: Technology - Column

In anticipation of this month's FEI Forum on Finance and Technology, the FEI Research Foundation spoke with industry professionals and FEI members about key information technology (IT) issues

The recent focus on corporate governance initiatives and financial reporting integrity are likely to impact technology. "Systems should focus on delivering the information to the right constituents," says Mark Jacobson, COO and Partner of Focus Group Corp. and Chairman of FEI's Committee on Finance and Information Technology (CFIT). "Information delivery should be well coordinated with any new governance issues or initiatives. [Further], CFOs should continually reassess if technology is being fully leveraged and aligned with their firm's business objectives," he adds.

Integrating business and technology is an objective of every organization. To better fuse business strategy and technology, priority-setting and resource allocation remains one of the top IT concerns for many CFOs -- particularly as significant sums are spent on infrastructure and maintenance.

A key challenge for the executive is to identify ways to reduce a company's expenditures for IT infrastructure and maintenance in order to free-up valuable IT resources for other initiatives that improve competitiveness and business performance.

Jerry Boltin, a senior partner at CSC Consulting, notes that prior research with FEI members has shown that nearly 70 percent of IT spending goes to sustaining the current environment -- leaving relatively little room for development or innovation. With the recent tightening of IT budgets in many companies, discretionary dollars will likely be further reduced. This will both add to the pressure on infrastructure and maintenance expenditures and increase the difficulty of obtaining funding for new development.

Dewey Norton, a CFO and longtime FEI member, says that this problem particularly hurts middle-market companies that can least afford investments in new technology. In some cases, he says, "They spend the money and never get the return on it." Compounding the problem of return on investment (ROI) measurement are frequent software updates that companies are hard-pressed to keep up with, the intangible nature of many of the benefits of technology investments and the tendency for many IT projects to span several years.

Analytical vs. Transactional

Though certain IT issues, such as Y2K and the Euro conversion, are cyclical, certain key CFO concerns will...