“If there’s any barrier to success between IT and business, it’s communication,” said Randy MacDonald, executive vice president and chief financial officer at Ameritrade Inc.
And while that statement seems like a truism, CFOs and a CIO who took part in a panel discussion about successful partnering noted how difficult it can be for each to speak the other’s language. The discussion was part of a CFO/IT conference held here this week and organized by Boston-based CFO Publishing Corp.
At Omaha-based Ameritrade, which spends one-third of its operating expenses on IT, MacDonald also served as acting CIO for about a year — until the company finally hired a new technology chief six months ago. He said he was “very disappointed” in the number of CIO candidates he interviewed “who couldn’t talk to total cost of ownership or other measurements.”
Lauralee Martin, executive vice president and CFO at Jones Lang LaSalle Inc., a Chicago-based real estate services provider that spends between 8 percent and 10 percent of its revenue on technology, said her company had two CIOs at different times during her tenure “who could talk a good business game.” But they didn’t work out “because they weren’t technically sound,” Martin added.
Martin and MacDonald were joined in the panel discussion by Randy Stone, the CIO at Teradyne Inc. At Boston-based Teradyne, said Stone, “we make sure we’re not putting (IT) people in these roles that are all about bits and bytes but (don’t) have an understanding of the company’s business strategy.” To help support that effort, Teradyne is now “reskilling” some of its IT staffers “to get people better at interacting and working with the businesses,” Stone said.
Both CIOs and CFOs have to take active roles in ensuring that technology investments are hitting the mark, MacDonald said. “If the CIO is down the ladder reporting to the CFO (instead of the CEO) and IT is important to the organization, then the CFO had better make sure that IT delivers the expected results,” he said.
Martin said her company “has had good and bad experiences in this area” where IT and business didn’t communicate well and didn’t “act on the strategic good of the company. Then you’ll have terrible results.” She added that there’s much better alignment between IT and business at Jones Lang LaSalle under the current CIO.
To help ensure the effectiveness of IT projects at Jones Lange LaSalle, the company began conducting postproject audits 18 months ago to determine whether anticipated return on investment levels were being met. By doing so, said Martin, “the likelihood is greater that we’ll meet those targets, because it absolutely changes behaviors when people know they’re going to be held accountable.”
Boston-based Teradyne has also taken some steps toward auditing IT projects, said Stone, but on a scale of 1 to 10, she rated the company’s progress at a 3. “It’s tough to do. Do we really have a crisp ROI? Do we know where it is in the P&L (profit and loss statement)? That’s the journey,” Stone said.