Another hat for the CIO to wear or is it already part of the job description?
A survey conducted by SearchCIO in 2012 asked senior IT members which skills they were asked to develop to better fulfil the role of a CIO in the year ahead. Coming in at number five with 19.1% of the vote was corporate finance.
The CIOs and IT executives agreed a good understanding of how the business makes and disperses funds is essential to the CIO role. This, of course, goes beyond knowing what the IT department budget is and how the funds should be allocated and all about knowing the organisation’s overall position. How the IT budget fits into the entire scheme of things and importantly which are the core requirements of an organisation that IT needs to service.
The financial understanding includes looking at new service delivery models and changing IT trends and how they can benefit the organisation, can they reduce costs; can they increase productivity? Where does the organisation best invest its time, resources and money?
Being financially savvy also means being able to make brave decisions regarding technology. Decisions such as moving infrastructure to the cloud. This doesn’t mean giving up technology within an organisation. It does mean freeing up technology resources to work on key business strategies, big data analytics and providing meaningful information to IT customers, to further an organisation’s goals. Getting rid of legacy systems and their cost overheads would have to be a good move. Running IT as a specific business helps to focus and clarify decisions.
Money saved by moving to the cloud can be put into innovation, catering for a more mobile workforce, security or other issues being faced by IT today.
Don’t think innovation is necessarily expensive. There is an old saying “necessity is the mother of invention”, when something has to be done, those with the drive and imagination will find a way to do it. Many amazing inventions have come out of the family garage, not just the nuts and bolts, it was also the home office. In 1976 Steve Wozniak built the first Apple computer in a small garage in California. And the value of Apple today is?
Every department will have an allocated IT spend for such things as equipment and consumables, so this constitutes and enterprise IT spend which is separate to the actual IT budget. The CIO should have a good understanding of both and be able to advise on the most efficient enterprise expenditure.
Being a financially savvy CIO should not really be seen as a new trend, it is a trait which should be inherent in anyone residing in the C-Suite. It is at this level that key decisions are made which affect the organisation as a whole. And while as the CIO you may not be a qualified accountant and know all the ins and outs of the financials, it is a necessity to understand a balance sheet and where you need to balance all your resources.