Free the CFO!
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
This book seems to be aimed at the finance department. So why should IT professionals pay attention to it?
Reinventing the CFO: How Financial Managers Can Transform Their Roles and Add Greater Value
By Jeremy Hope
Harvard Business School Press, March 2006
272 pages, $29.95
This book seems to be aimed at the finance department. So why should IT professionals pay attention to it? Two reasons:
The first is that Hope, in his quest to make the CFO a more valuable member of the management team, wants to eliminate a huge part of the IT budget. Hope, research director of the Beyond Budgeting Round Table, an industry trade group, contends that IT is drowning senior managers—especially the CFO—in so much unfiltered, unanalyzed data that it is hindering the way work gets done. As a result, he says, every bit of the IT budget needs to be examined, with newly proposed expenditures getting even closer scrutiny.
CFOs need to be "more wary of implementing new tools and IT systems that soak up valuable time and money but fail to provide reasonable value," Hope writes. "Context and meaning are being lost in a fog of detail and complexity."
It isn't that Hope thinks IT is worthless. "I am not arguing against centralized information systems. . . . But [IT] should be focusing on the bigger picture of patterns and trends rather than detailed variances at the unit level," he writes.
These criticisms are not particularly new, but they are worth considering because Hope is arguing that your job is going to change radically if the CFO plans to alter his.
The second reason for paying attention to this book is even more intriguing. The blueprint Hope has laid out for CFOs to increase their value to the organization will work equally well for CIOs. He argues that CFOs should be:
Streamlining the organizational structure, both to reduce costs and to allow people to respond faster to changes in the marketplace;
Working to improve their employees' analytic skills, instead of making sure (needless) forms are being filled out correctly; and Focusing their department externally (on what will help the company succeed) instead of internally (on what willmake sure their department is running smoothly).
Doing all of this is far more difficult than Hope makes it sound. He simply assumes that a CFO—or a CIO, for that matter—can wave a magic wand, change the job function, and eliminate all the problems that have come before. Silos, bureaucracies and long-held assumptions simply disappear somehow.
Hope devotes just one chapter to transforming the organization, and anyone who has ever read a book on change management won't find his advice particularly original. ("Make a compelling case for change; gain the support of key people; involve operating people," etc.)
But even though the individual components of the book don't break new ground, the cumulative effect strongly reinforces the argument that if a department—whether finance or IT—is not making substantial contributions to the success of the corporation, there is a good reason to question the competency of the people who run it.
Paul B. Brown is the author of numerous business books including the international best-seller Customers for Life: How to Turn That Onetime Buyer into a Lifetime Customer (written with Carl Sewell).
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