What’s Wrong with This Picture? (and How to Put It Right)

 

“I’m the CFO, it’s not my job to worry about IT.”

 

I have noticed an interesting trend over the past several months that I find exciting. This is the heavy involvement of Finance (Controller and CFO) in IT, not just in decision-making and approvals of IT investment, but in the strategic planning process. I am very encouraged by this.

 

If your senior financial management is not involved in the IT function of your company, I strongly suggest that you consider fixing this situation. Here is a cautionary story that illustrates the problems that a company can face when it doesn’t involve non-IT decision makers in the IT planning process. It illustrates why the CFO must care.

 

We had a non-credit union client recently who was experiencing tremendous pain around complaints from a user community of about 350 users distributed over 14 sites. They had just had a turnover of IT management at the highest level, and this is where I got involved.

 

The user community complaints were actually a symptom of a much deeper and more serious issue.  In the course of our engagement with senior management, we uncovered eight years of executive management neglect of the IT function. It wasn’t malicious neglect; it was unintentional neglect that arose from a lack of a vision, strategy, and long term IT roadmap upon which to base financial and management decisions. There had been no involvement of non-IT executives; as such, IT was not aligned with business vision or strategic objectives.

 

How did this happen? How did they get themselves into this predicament? Here are two examples among several:

 

  1. Their WAN was creaky and old (one of the oldest I have ever seen), but there was no attention on uplifting the infrastructure as part of an iterative and ongoing strategy. A major core business application was rolled out to all sites across , and since no attention was paid to shoring up the infrastructure before application installation, infrastructure performance took a steep (and problematic) drop.
  2. The company was encouraged by their VoIP vendor to purchase a brand new VoIP system. Three integrators later, they were left with the most complicated VoIP routing and switching installation I have ever seen. To make matters worse, they have never received the expected value from the investment.

 

The good news is that we are working with management to fix things. The company must now allocate significant spending to IT in order to make up for the years of little to no investment in infrastructure, disaster recovery, compliance, and other key program components. Though this is a somewhat bitter pill to swallow, it has had the good result of gaining the CFO’s attention and interest.

 

The new IT goal set collaboratively by the IT manager, the CFO, and the Controller is stable, simple, and maintainable systems that produce happy users. They wanted a high quality ‘austere’ network—not “cheap,” but “no frills.”

 

This company also made the decision to go with a Managed Services Provider (MSP) as part of a strategic move to focus their limited but talented IT resources on core business activities. They determined that as far as third-party relationships, they didn’t want a tactical IT partner—that is, a provider that only manages a device or set of devices. They wanted a partner that would participate in strategic planning, design, and architecture, as well as a partner who could assist them in day-to-day management of sophisticated devices from Tier 1-Tier 3 support.

 

Areas that we recommended they turn over to an MSP encompassed much of the security infrastructure, including the DMZ, firewalls, SPAM filters, SSL VPN, Load balancers, QoS devices, AD, Servers, and Consolidated Event Management. (The caveat, of which they are cognizant, is that an MSP can only be brought in after their infrastructure has been assessed and remediated.) Hiring and managing the in-house talent to effectively support all the equipment listed above would run $80-110k per year; the MSP we recommended performs the same services for $48k per year.

 

One of their primary goals, right after end user happiness, is network stability for the VoIP system. We encouraged them to focus on simplicity in order to make the network able and supportable. Since they had determined that they did not want their core IT staff supporting a non-business value add system then this system also had to be simplified so that the MSP taking over the VoIP management wasn’t saddled with the same issues.

 

We continue to work with senior management on effective IT strategy. As far as next steps, the CFO wants an IT roadmap, that is, a doable plan that is sized right for the company. Immediate action items include:

 

  1. Data Center power distribution and re-cabling.
  2. Replaced the 10-year-old ATT WAN with a new Sprint MPLS WAN.
  3. Virtualization (there is no more server rack space left)
  4. Disaster recovery site implementation
  5. Employing a different back up method from the tape backups currently being used.
  6. A comprehensive Microsoft licensing strategy that includes an audit of current licenses.

 

My reason for providing a high level of detail in this story is to give you clear examples of IT issues that may track with your own. If any of the problems or strategies that this client is dealing with ring any bells for you, it may be time to examine your own IT function and how your financial management relates to it. If your senior financial manager is not getting involved with IT strategy or decision making, you may want to better align the two. If you don’t, there may be trouble brewing behind the scenes.


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