6 Key Observations from ITFM Week 2014 in Chicago
For the second year in a row, I was invited to chair and emcee the leading conference for IT Financial Management professionals in North America. The SSON ITFM Week Conference has grown in scope and audience because of its focus on transformative content. I just got back from the 3 days in Chicago, after being involved in some great discussions around the future of the IT Financial Management profession. Apptio and the TBM Council were premium sponsors of the event.
One thing is for sure: organizations across industries have felt the impacts of the lingering recession and cost cutting; of emerging regulations and oversight; of disruptive technologies and new service models; of bad data everywhere, with little insight into its relevance. These disruptors have forced organizations to take deep dives into understanding their existing structures – and expenses – to find new ways to operate and become more agile.
Shining the light on IT is becoming a key lever in this approach for many organizations. But what’s interesting in this approach is the sheer lack of insight into IT spend, and how that spend ties back to business strategies. This message resonated with me throughout the conversations and presentations during the week.
The response to these disruptors: it’s imperative to implement Technology Business Management (TBM) processes and tools to help IT and Finance divisions understand IT spend better. And connect the dots to business strategy to see the impact of business disruptions on IT. After doing this. the options to respond to these disruptions (or get ahead of them) become clear.
The solution that IT Finance can offer: Transparency. Which means revealing metrics in a way that makes sense to decision makers.
The problem with the way many finance professionals approach transparency is they get buried in the details and the data, which is not only time-consuming but it obfuscates the linkage between business and the technology behind it. In the words of Mareida Mackenna, senior director of global IT finance for Aon: “The mistake that people make is that they think transparency is detail. That’s not transparency. When I first came into the organization there was tons of information but no one knew how to explain it to the executives that were complaining about it. So I had to kind of dumb it down. We had to come to a very simplistic view of the data.”
At the 2012 ITFMweek Conference, keynote speaker and then-CIO of AmerisourceBergen Tom Murphy said that he, and CIOs like him, needed his IT finance leaders to be CFOs of IT, not just accountants or budget keepers (those are table stakes). To do that, he recommended TBM as a discipline to help IT improve business value. At the 2014 conference, it was clear that many had taken his advice. IT Finance leaders from U.S. Bank to CME Group to Tennessee Valley Authority talked about how they’ve employed TBM to improve fact-based decision making and collaborate with business partners on governing the IT portfolio.
From their presentations – and audience input – the following 6 themes repeated during the conference:
1. TBM is a journey, but it’s worth it
Changing the way in which IT and business partners interact is a challenge, but it’s a crucial undertaking. Transparency in IT spend – and in IT value – is necessary for organizations to utilize technology as a strategic and innovative lever. As Jeff Longo, VP, finance analytics & governance at Traveler’s stated: “There’s a lot of spend on IT and there are a lot of questions, mainly “What’s the value.” It’s imperative to tell the business what they’re using, at what cost, and why.”
2. Share accountability for data
People need to be accountable and responsible for information and data. As John Jarvis, director of IT Finance at Molina Healthcare put it: “No one wants to take responsibility [for data]. The reality is, when someone owns it, it gets a lot better.” Data doesn’t have to be perfect but it does have to be trustworthy. Without that trust, the rest of the work becomes suspect.
3. Speak the same language
Finance needs to speak the language of IT and IT needs to speak the language of business. That being said, no one wants to talk about IT specifics outside of the department. Terms like MIPS and CPU utilization are off the board. As Lance Freedman, strategy lead, Space Systems Company Finance & Business Operations at Lockheed Martin put it: “IT needs to provide context and insight around that data, not just data” Data has to be actionable. Without an action attached to it, data doesn’t get used.
4. Change the conversation
Develop metrics and come up with a common operating view to really get folks to start talking about the same things, the same trends and understanding common goals. As Jeff Longo from Traveler’s mentioned, “having business leaders talk about IT as a strategic lever as a huge win for us.”
5. Culture is the answer
Technology implementation, KPI indicators, benchmarks – these are all crucial components of TBM. But real success comes down to changing the culture. Nearly all of the speakers stressed that executive backing is absolutely necessary, as is the ability to socialize small wins that lead to confidence, understanding and, ultimately, backing in the TBM approach.
6. Change management aspects cannot be ignored
As Gregory Panik, global IT finance manager at Campbell Soup Co. said: “We are changing the way IT is viewed in the organization. It is a constant beating of the drum, constantly having conversations with people about what those things should look like. Leadership support is critical. My CIO lives and breathes this every single day. He’s constantly talking about it.”
While each of the speakers at the three-day event had a message to share, perhaps none was as clear as Carl Stumpf, managing director & technology controller at the CME Group, the world’s leading derivatives marketplace. Stumpf was hard charging (and pretty humorous) about the mission of TBM and the necessary mindset of IT financial managers who are often tasked with leading the charge. “Be passionate,” he said. “You’re doing something important. There are market signals you can send to your organization and use that market information to drive change.”
It was a great conference and validated much of the work we are doing at the TBM Council. Are you interested in shaping the evolution of IT? Join me at the 2nd annual TBM Conference in Miami, October 28-30, 2014. Early-bird registration is now open, so don’t delay! If you have questions or comments, share them below, or with me on Twitter @chrismpick.