In many organizations, the chief financial officer (CFO) is placed over the IT manager in the organizational hierarchy. For a variety of historical reasons, CFOs have been the member of the executive suite who has the most interest in business technology. Crunching numbers on a large scale is what computers do best. The spreadsheet was the application that came first to most businesses, and it came in through the accounting department.
Information technology today does a lot more than just crunch budget numbers. It is difficult to find any aspect of modern business operations that does not involve computers and technology solutions. There is a computer on every desk. The Internet is integral to marketing and communication. Even the lowliest employee may be issued a smartphone in the modern business.
This has led to a number of conflicts between the perceived priorities of the accounting department, under the CFO, and the demands on the IT department, under an IT manager reporting to that same CFO. The impasse is an organizational problem which holds back many businesses from taking full advantage of the technologies available to them today.
CFOs have control of the purse strings, which are often at issue when technology purchasing decisions need to be made. It is this aspect of their job that may provide the most challenges when it comes to managing the IT manager.
The imperative of the accounting department is to keep costs down. IT, however, should be all about enabling efficiencies in business operations. This frequently requires an up-front investment and less-conservative approaches to managing the IT department.
In many businesses today, the chief operating officer (COO) is a more appropriate supervisor for the IT manager. Operations typically has a broader perspective and a better comprehension of business priorities than does the accounting department. Incorporating the IT department with the department that is most intimately involved with the creation of value in the business will ensure that technology is being marshaled to align with those processes.
In cases where the COO isn’t able to take on that role, it might make sense to consider the CEO. The strategic implications of technology solutions might not be something the average IT manager is fully cognizant about. The CEO, on the other hand, may be unaware of technologies available to help execute his or her strategic concepts. Partnering the two provides the CEO with direct access to a lever to help move the company in the appropriate strategic direction, while allowing the IT manager to apply innovation in a realm that might otherwise remain unavailable.
Whether through inertia or calculation, it’s likely that most organizations will continue to position the IT manager below the CFO in the org chart. Even in those cases, changes should be made to better incorporate the rest of the business into the IT decision-making process.
Forming an IT steering committee comprised of stakeholders from various departments (and at varying positions of authority within those departments) is one of those changes. While the CFO does not give up direct supervisory capacity over the IT department, most important strategic decisions are handled by the entire committee. This provides more input and better feedback from the whole organization. The result is better alignment between IT efforts and business strategies.
In the end, it may be less important where, specifically, the IT department is situated on the business organizational chart. What is more important is that both business executives and IT staff recognize the breadth of the department within the organization.