When it comes to finance, ICT executives often find themselves feeling like Star Trek’s Dr McCoy when they protest, “I’m an IT director, not an accountant!” But as companies work to integrate their information services and business processes, they have a greater need to be financially literate.
“In the past, there were too many projects that IT, as an industry, worked on based on who screamed the loudest,” says Andy Geisse, CIO at AT&T.
“You don’t make a decision today without understanding the financial impact on the company.”
Geisse was a maths and economics major in college, but he also took some accounting and finance courses. He then earned an MBA to better understand financial analysis. He says he uses these skills on a daily, if not an hourly, basis.
“Almost every aspect of my job includes using some financial skills,” he says. “For example, when looking at which projects IT should pursue for the company, it involves a detailed analysis of return on investment, expense impacts and capital impacts for each project.”
Finance also acts as a bridge between ICT and the rest of the organisation. “Finance is the common language between disciplines,” says Geisse. “Marketing can speak in terms of what they need, and IT can speak in technical terms, but they can communicate in a common financial language to understand what is critical with the company.”
Being an ICT manager requires more than obtaining a computer science degree or certification.
“An IT leader has to be adept at a number of skills in order to be successful,” says David Saul, a senior vice president in financial services provider State Street’s office of architecture. He cites skills in areas such as project management, personnel, communications and finance, including forecasting, planning and budgeting.
But finance isn’t commonly taught to those pursuing computer science degrees.“Most IT managers, like myself, came from an engineering background and struggle with a budget the first time they have to complete one,” says Saul.
So whether or not you’re interested in finance, you have to learn it.
“You don’t need to like it, but you can learn it,” says Andreas Wuchner, head of global IT security at Swiss pharmaceutical firm Novartis International AG. “You can manage only what you can measure.”
The required skills can be attained either formally or informally and, just like a certification, should be kept up to date with regular study. “I am also constantly trying to improve these skills through formal education and by working with my financial counterpart to understand how he looks at particular projects and views the impact on the company,” Geisse says.
Saul recommends taking a course in basic accounting or book-keeping and getting on-the-job training. He worked as a book-keeper for his local government when he was in college and says the experience has proved invaluable. “There is a set of financial skills that go beyond simple book-keeping and relate more to judgment,” says Saul. “These include the ability to forecast and
Pete Walton, CIO at oil producer Hess, says he learned quite a bit about finance when he ran a small manufacturing firm in the early 1980s. But he also advises getting assistance from others in the company.
“There are people in your organisation that understand this area well — love it, in fact,” Walton says. “They are also likely to be willing to help you up the learning curve, so don’t be bashful.”
Ideally, an organisation will have a formal programme for training and mentoring that helps employees fill the gaps in their financial education. But if not, don’t let that stop you.
“Everyone is responsible for their own career development,” says Karen Hopkins, principal of The Hopkins Group a human resources consulting firm. “It’s your career. You should be willing to invest some of your own resources in it."