Tech execs are taking over finance. Finance chiefs are taking on IT responsibilities. It all points to one thing.
By changing the “I” to an “F” in the middle of his title, Martin Chavez is about to answer one of the great big “IF” questions in large organizations: can the person formally responsible for technology take the reins of finance as well?
Business media were quick to take note of the recent appointment by financial giant Goldman Sachs of Chavez from CIO to deputy CFO, with a plan for him to take on full financial leadership early next year. According to the Wall Street Journal, other organizations should take such a move as a sign of the times:
The announcement that R. Martin Chavez, Goldman Sachs Group Inc.’s chief information officer, will become the investment bank’s new finance chief is testimony – if any is needed – to the increased importance technology is playing in the financial services industry. “Putting the CIO in the CFO position just puts an exclamation point on that,” said Jeffery Harte, an analyst at Sandler O’Neill + Partners. “Technology has become more important.”
When Roles Converge
This isn’t completely unprecedented, of course, and it can happen the other way around, too. As the Journal and others reported last year, for example, Jockey International managed to poach Dain Bussewitz, the former VP of finance at Abercrombie & Fitch, and made him both CFO and CIO. Around the same time, PepsiCo announced that its CFO, Hugh Johnston, would become a vice chairman and take responsibility for the company’s IT systems.
It’s not that running finance and IT have become so easy they no longer need their own leadership, of course, or that the skills are interchangeable. Instead, these organizations may be trying to ensure that by either consolidating the two portfolios under one position, or putting a technology expert in the CFO’s chair, critical decisions about the way the organization operates will happen more quickly.
Not everyone will be prepared to shake things up to this extent, which is why Information Week recently published a piece on 5 reasons the CIO and CFO should be best friends. The over-arching conclusion is that an alliance strongly benefits both sides:
“In many organizations, the CIO will still report to the CFO, but the trend is for a direct reporting relationship between CIO and CEO. In general, that’s good for the CIO, but it brings complications, as well,” the publication wrote. “Why is the CFO such an important executive partner? The answer boils down, of course, to money, but the money is reflected in influence. In most organizations, the CFO is a principle trusted ally of the CEO and a key member of the executive committee.”
There are many ways to set up areas like finance and IT, but it comes down to this: can you get the right technology in place to drive the right business outcomes? That’s a “what if” many organizations should aim to answer as early as possible in 2017.
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