It used to be that only two things were certain in life; death and taxes! Now in the new information age there is a third certainty – technological innovation.
Steve O’NeillAs the individual who is most often tasked with the stewardship of our own Corporations, it is incumbent upon us to ensure that we keep abreast of this fast moving environment to maximise the benefits and minimise the potential risks. We can no longer absolve ourselves from engaging in this technological revolution and assume that others within IT, legal or management have covered all the bases from an operational risk and reward perspective.
The Evolving Role of Technology in Business
Whilst it wouldn’t be appropriate for every CFO to have a desire to understand the intricacies of hard core software programming or load balancing of IOPS (Input/output/Operations per Second) across their IT infrastructure – both are clearly best left to the experts. I would challenge a CFO to have at least a working knowledge of IT to enable them to make informed investment decisions for their business and to weigh up the pros and cons and risks and rewards of chosen IT strategies.
Consequences of Isolated IT Decisions
Too often, I have observed critical operational IT decisions made within companies at purely a divisional budget or P&L level, which has resulted in either sub-optimal results or, at worst, exposed the company to unnecessary risk.
Understanding the high level picture will enable you to make much more informed business and investment decisions and leverage new opportunities whilst minimising your exposure to previously unaccounted for business risk.
Essential Questions for Your IT Department
QUESTIONS TO ASK YOUR IT DEPARTMENT
Key Areas CFOs Should Focus On
Here are my top 10 key areas and a few examples of the types of business areas that I would challenge any CFO to have an opinion on about the potential impact to revenue, cost, risk and more importantly, agility for their organisation.
- IT Infrastructure – Aging of hardware, software licensing, use of software tools (eg deduplication), volume of bespoke software code
- Cloud strategy – Virtualisation, IT as a service (XaaS)
- Security strategy – Data backup and recovery, firewall, virus, IPR protection
- Data Center – Locations, outsourced to service provider?
- Big Data strategy – Capture of data, analytics, monetisation of data
- Bring your own device (BYOD) strategy – Agility, risk, cost
- Social media strategy – Risk, benefit, HR implications
- Business Continuity Strategy – Location of physical sites
- IT Staff – Attrition rates, % of contractors or temp’s as % of total IT department
- Operational Risk – Dependence on particular suppliers, dual vendor strategy, outsourcing of services, IT service level agreements (and potentially liquidated damages clauses) in external contracts with suppliers or customers
Next time you talk to your CIO or IT Department, show an interest and ask them about some of the items on this list, I guarantee you will find out some interesting information that you may not have been aware of.
