Financial Management and Accounting

Graduate School of Management and Technology

Announcements/News

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CFOs and IM

The December 2007 issue of Financial Executive states “while businesses rely on the IT department and CIO/CTO for things technical, the CFO should be involved in key discussions associated with creating an information management strategy” (p. 44).  The CFO is responsible for ensuring that the organization’s information asset is organized and managed optimally.  Recommended best practices include:

• Build a study and scalable network
• Integrate business application software
• Secure the system from outside abuses
• Safeguard information from inside abuse
• Implement disaster planning and recovery

An organization’s IT plan supports its business objectives, and the CFO plays a significant role in its successful deployment.

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Managing IT Systems with Tools from Your FM Toolkit

According to Financial Executive (November 2006), as financial managers we have the ‘tools’ of effective internal control in our financial management ‘toolkits’.  They include:

budget management	√
budget conformance monitoring	√
spending management	√
expense control	√
reporting errors and execution monitoring	√
transaction/action outlier detection	√
standard assurance	√

Effective and efficient information technology systems power these tools of the financial management trade.  Such IT systems often disappoint and fall short of our expectations, however, because as financial managers responsible for IT acquisitions and applications, we do not follow the principles that govern the use of the tools in our tools kits!   

Budget management for an IT acquisition requires cost understanding, which involves learning about the technology, its functions, and benefits.  Budget conformance monitoring means more than simply monitoring an IT project to determine if it is on-budget.  Such supervision means assessing IT performance results, and “linking results to performance measurement and monitoring management activities” (Barkley & Benson, 2006).  Spending management and expense control results from affordability through prioritization as managers select IT features based on cost-benefit analyses.  Reporting errors and execution monitoring, and transaction/action outlier detection is accomplished through active engagement of management in the IT decision-making process.  Standard assurance is achieved through processes that include planning, monitoring, and continuous evaluation. 

Managing effective and efficient IT systems requires the same internal control ‘tools’ that financial managers utilize in managing other aspects of operations. 

Source: Financial Executive, November, 2006

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