Partnering with IT

As Seen in CFO Studio Magazine Q2 2017 Issue

-By Michael Rist, Chief Financial Officer, VIP Petcare

ARE YOU ASKING YOUR CIO THE RIGHT QUESTIONS?

As the role of the CFO continues to evolve, finance executives must continually augment their knowledge of technology and how it impacts the continuing operation and strategic direction of the company. This starts with open and ongoing dialog. The CFO needs a good understanding of how the IT department is positioned in the context of the overall strategy of the company. Below are five key questions to ask your CIO regardless of industry or company size.

How is the IT strategy aligned with the corporate strategy?

Asking this question allows you to gauge where resources are being directed within IT and if they are yielding returns that exceed the hurdle rate. You need to make sure there is a viable business case for every material project in the IT portfolio that supports the corporate strategy. It’s important to note that not every project will translate into an easy-to-calculate ROI, and qualitative measures must therefore be in place to ensure that shareholder value is created.

What risks are you already planning for?

The answer should include testing, firewalls, critical system failure, anti-virus, spyware, anti-malware, etc. If you are holding credit card information, you must comply with the Payment Card Industry Data Security Standard (PCI DSS) and keep that compliance up-to-date every day. Not doing so may expose you to hefty fines and the risk of losing the authorization to process payment card transactions. The goal here is not to eliminate or minimize risk but to manage the risk exposure to ensure the right level of risk, in order to effectively pursue the strategic goals of the company.

What scares you? (If he says nothing, that’s a problem!)

There are numerous things every CIO should be scared of, from zero-day vulnerability to social engineering or phishing, which has become more and more sophisticated over the last couple of years. Key here is that the CIO makes you aware of these without all the technical details.

What is the security around our data and systems?

Not all data is equally sensitive. A plan must ensure that the most critical data is safeguarded. This plan should be a collaboration between IT and the rest of senior management.

What is our response plan for an incident?

Not every organization has one of these, and that’s OK, provided there is a clear plan of crisis response. Some organizations have generalized response plans for crises of varying types (critical system failure, natural disaster, power outages, weather, strike, etc.) with cyber incidents just another form of occurrence to be managed under such a plan. Senior management should run a process review on an annual basis.

Being a technology-savvy CFO doesn’t mean simply having the latest and greatest technology or knowing the latest cyber fad. It means being able to advance your organization’s growth or improve its competitive position by asking questions that identify key constraints holding back the organization from pursuing its goals.

Customer Matters

As Seen in CFO Studio Magazine Q3 2016 Issue

 

MORE THAN NUMBER CRUNCHING, CFOS TODAY ARE FOCUSED ON DRIVING THE CUSTOMER EXPERIENCE

One would expect CFOs from different industries to have very diverse opinions and concerns, but when customer service is the issue, “we all think alike,” says Brian Friedman, CFO of the New York Jets. “Whether your customers are 80,000 football fans or high net-worth individuals, at the end of the day, business is business and it’s all the same.”

Mr. Friedman spoke on “Delivering Customer Service 80,000 Fans at a Time — The CFO’s Role in Managing Operations, Finance, and Risk” at a World-Class Companies CFO Dinner, part of CFO Studio’s Executive Dinner Series, held recently at Park Avenue Winter, a well-known restaurant in New York City. In an interview, he said he found it “professionally validating” that everyone in the room felt the way he did about “the complexities of customer service, the challenges of dealing with high-value/ high-expectation customers,” and the CFO’s role in fulfilling customer expectations.

Mr. Friedman began the evening’s discussion by highlighting the scope of what customer service at the Jets entails: “On game day, we’ve got 80,000 fans in the seats [at MetLife Stadium in East Rutherford, NJ]. The population of the city of Trenton is 85,000.” In contrast, he noted that one participant at the CFO Studio event had as many as 300,000 customers, while others had far fewer customers. Yet, as CFOs, their goals are identical: “We all have to make sure that we collect more cash than we send out.”

And that is why the role of the CFO, he explained, has evolved to include a focus on customer service and not just accounting. “When all is said and done, we are helping to shape the company’s strategy, helping to determine the allocation of investments and resources on an annual basis, and looking for opportunities to grow the business.” He continued, “The only way to successfully do this is to understand where your revenue is coming from. Delivering great customer service, and knowing your customer, is the key component of that.”

CFOs gathered at the CFO Studio event agreed that the day-to-day challenges they face in their efforts to make each customer feel that he or she is the most important person in the world are the same, “regardless of industry or widget.”

George Neal, New York metro area Regional VP of Sales for California-based Tidemark, a private enterprise performance management company that is a CFO Studio Business Development Partner, said, “With a tighter economic market, all companies are focused on understanding the customer experience and retaining that customer.” He noted that it only makes sense that the role of “the CFO has morphed into a strategic advisor to the business, as opposed to simply a steward of the business.”

Leveraging Technology

Mr. Friedman moved the dinner conversation in another direction by describing his organization’s leveraging of technology to deal with a unique customer service matter — safely and smoothly getting tens of thousands of fans from the parking lot tailgate parties to their seats before kickoff. That led to the group’s discovering another common thread: “We all agreed that Big Data is an over-hyped term,” he said. “It’s not about Big Data as much as people make it out to be. It’s about actionable information.”

Mr. Friedman added, “We’re all looking for sources of information that will help us make … decisions that can drive better customer service.” Some people will call that Big Data, he said, but “none of us felt that Big Data is the appropriate term for it.”

The CFOs agreed that data may be helpful, but can be useless, while information is invaluable. “What are we trying to do with data?” Mr. Friedman asked. “When gathering data, as CFOs what actionable information or intelligence can we get, and what decisions are we trying to make?” His conclusion: “Until we can clearly state what those objectives are, getting reams of data doesn’t necessarily do anything for us.”

Coming from a different perspective, Mr. Neal said it was very surprising to him that “technology providers assume there is enough information available about Big Data, but clearly CFOs must better educate themselves as to the tangible ways they can harness and leverage it.”

In the end, both gentlemen, and the CFOs attending the dinner discussion, acknowledged that while such debates are indeed intellectually stimulating, it is quite nice, every so often, to be in a room where everyone is on the same page and singing the same CFO and customer service tune.

Machine-to-Machine Technology

As Seen in CFO Studio Magazine Q3 2015 Issue

THE BRAVE NEW WORLD OF THE INTERNET OF THINGS

Machine-to-Machine technology — also known as M2M, or the Internet of Things — is bringing about huge changes to manufacturing, logistics, and many other business, according to CFOs who took part in a panel discussion titled, “The Evolution of Manufacturing: Machine-to-Machine Technologies, Predictive Analytics, and More.” It took place at the CFO Innovation Conference, attended by more than 400 CFOs and other executives.

The panel was moderated by Greg Libertiny, senior vice president, finance and business operations, of Theorem, a Chatham, NJ–based global digital marketing partner that works with some of the world’s most recognizable organizations.

M2M systems use sensors and other devices to capture temperature changes, movement, and other events, instantly alerting human or other operators about the changes. Panelists gave examples.

“If oil companies had an M2M sensor on the choke mouth [a device used to control pressure] of their oil wells, some serious accidents in the Gulf of Mexico and elsewhere may have been avoided, because monitors would have known that a problem was about to occur,” noted Michael Eldredge, a cofounder of American Sensor Technologies. The Budd Lake, NJ–based company manufactures pressure sensors, transducers, and transmitters.

“It’s getting easier and less expensive to monitor and track assets, like 56,000 WalMart trailers,” added Ned Mavrommatis, CFO and treasurer of I.D. Systems, Inc., a Woodcliff Lake, NJ—based global provider of wireless M2M solutions. “You can easily tell whether they’re fully loaded, and where they are at any time.”

M2M may also help companies to cut costs and increase productivity, chimed in Rob Weingartz, vice president finance at Arrow Fastener, a Saddle Brook, NJ–based leader in manual, electric, and cordless fastening tools. “Some companies move to low-cost countries to enhance productivity and cut costs, but M2M can help them do that right here,” he reported.

M2M can make a big difference for manufacturing companies, noted John W. Kennedy, CEO of the New Jersey Manufacturing Extension Program, a Cedar Knolls, NJ–based not-for-profit that offers guidance to New Jersey’s small to mid-sized manufacturers. —Martin Daks

Copyright 2017