Finance Directors and IT Directors often operate from different perspectives. If they are unable to resolve their differences, organisational performance will suffer. Steve Turner, Business Consultant of Stratic Ltd, explains how the communication discrepancies arise and suggests how they can be overcome

IT is a major item of expenditure for any organisation - typically it is one of the top three costs that a business incurs. Yet, while most businesses regularly benchmark overheads such as salaries and benefits to ensure they remain competitive in the labour market, few are as rigorous about benchmarking their IT costs.

IT benchmarks tend to be based around performance metrics such as network availability or helpdesk response times. These are tangible measures and therefore relatively easy to put in place. The perception is that creating and benchmarking financial performance metrics is more difficult.

Sound metrics will enable businesses to measure and benchmark the financial performance of their existing technology infrastructure and then use the data collated to make strategic decisions about future investments.

Effective metrics are identified by their ability to:

- Ensure an organisation is getting maximum return on its IT investment
- Determine whether a business is spending the optimum amount on IT which will indicate levels of competitive advantage or disadvantage
- Facilitate management through facts rather than assumptions.

The benefits sound compelling ... so why do so few businesses take up the challenge?

Finance Directors (FDs) and IT Directors (ITDs) have different priorities. Most FDs are focused on understanding the wider commercial benefits of an IT project. They tend to be concerned with the anticipated return, its impact on the organisation's competitive position, and the long-term cost justifications.

ITDs, on the other hand, are usually more focused on the extent to which an IT project will improve the efficiency and integrity of the business by increasing staff productivity, network response times and data security/throughput.

Unless the business has a clear understanding of the cost structure of its IT, it is easy to make decisions that appear financially prudent but are in fact detrimental to the business.
The investment in IT training budgets provides a useful example. In recent years many companies have dramatically cut their IT training budgets as a seemingly easy way to save money. However, in most cases this has caused a significant increase in support costs, which more than offsets the savings made. With better visibility and understanding of IT expenditure comes the ability to fully understand the financial impact of decisions before committing to a given course of action.

This integrated approach will have significant benefits for the business. By working together to establish financial metrics and to benchmark performance, both Finance and IT will be able to accurately demonstrate the value that IT is delivering to the business.
This will provide full Board-level visibility of expenditure, without getting embroiled in the detail of technology.

All that's needed is a little understanding of the natural communication preferences that exist and a willingness to bridge the gap by focusing on the distinct advantages that a combined Mars and Venus approach bring!