Working hand-in-hand

As agency officials continue to bolster their management of information technology investments, the connection among the technology, finance and business aspects have become more intricately linked.

This shift highlights the interaction between the chief information officer and the chief financial officer: Should the chief information officer report to the chief financial officer or should one person hold both positions?

Although the organizational structures vary among agencies, most agency officials agree that the two positions must work closely together and have a robust understanding of the other's job for successful IT management.

"The CIO and CFO are the two most important support components in any agency," said W. Todd Grams, CIO for

the Internal Revenue Service, who also spent two and a half years as its CFO.

"With the two working together, you can help ensure a business unit has a good strategic plan in place, is getting the financing they need and [that the agency will] have the systems available day in and day out to fulfill the mission," Grams said.

Since the Clinger-Cohen Act of 1996 created the CIO position, the relationship between CIOs and CFOs has improved significantly, said Paul Brubaker, one of the authors of the law and now chief marketing officer of SI International Inc. Many CFOs once thought it wise to combine the two roles under the CFO's

duties, but the past few years have brought an increased trust and respect for the distinct roles.

"There was this period of healthy yet unnecessary tension between the two," Brubaker said. "That was unfortunate because the tendency to not cooperate between the two set back progress in areas such as capital planning and investment control."

Without constant communication between the two positions and a structured organization for IT portfolio management, agencies run the risk of launching unnecessary projects and redundant systems.

That was the case at the Department of Housing and Urban Development before officials developed a senior review board, which included the CIO and CFO, that saw each project through the approval and funding process, said Gloria Parker, HUD's chief technology officer.

"The problem was [that] in many

cases there was no structure [and] no organization about getting IT projects funded and executing on that funding," she said. "We now have a very thorough system in place. Nobody can get around us now."

For Grams, however, the structure of the review board is not as important as

the CIO/CFO relationship. At the IRS, Grams and CFO Eileen Powell have worked with each other for many years and share a business focus and unconditional trust in each other, he said.

"The organization doesn't matter; the committees don't matter; the weekly meetings don't matter," Grams said. "The two people in those jobs matter. If the two people in those jobs aren't turf driven and are willing to work as a team and share credit in the success of the agency, then they have the recipe and they will figure out the formula."

The same person, however, should not hold the two positions, particularly in a large organization, many agency officials said.

"If the head of the organization has the vision to use technology as a strategic enabler, then they can't divert people from their core functions," said Lisa Schlosser, associate CIO for IT program management at the Transportation Department. "You really need someone who can focus on the technology and someone who can focus full-time on the financial management of the organization."

Gopal Khanna, CFO of the Peace Corps, served as the organization's CIO and acting CFO for almost a year. He said it was an experience that has served him well in his current position, but he doesn't see it as beneficial for the agency in the long run.

When the director asked him to take on the additional role, he agreed, but said, "It is my recommendation that we should have these two positions headed by two separate individuals."

Because the CIO often deals with large, costly projects, there is potential for a

conflict of interest if that same person is asked to determine funding priorities, too, Khanna said.

The organization's IT modernization strategy should also be a major focus of a full-time CIO. He likened the relationship to a three-legged stool, with the CIO converting the business needs into technology solutions, the CFO taking into account overall financial strategies and the customers weighing in with their needs.

"Both positions are extremely critical to an agency because the head of an agency needs the counsel and vantage point coming from both areas of expertise," Khanna said. "They need to converge together with what the internal customers' needs are."

Most agency officials agreed that the two should be equals in the organization. But at the U.S. Postal Service, the CTO, who also handles the duties of the CIO, reports to the CFO, a structure that CTO Bob Otto said was a natural fit and supports the organization's business model.

"We feel that within the Postal Service only one executive needs to drive the strategy and vision of where we are headed with future technology, the use of data and information, as well as running the daily operations of the technology organization," he said.

But that doesn't mean the two don't have a close relationship, Otto said. In fact, the advantage of the hierarchy is that it allows for close collaboration on all initiatives, he said, and provides a link between programs and the organization's IT portfolio.

"The CFO, working closely with the CIO/CTO, needs to understand and fully support the as-is and

the to-be architectural model of each IT portfolio and help drive the changes needed throughout the organization," he said. "There is a need for a good, solid relationship between the CFO and the CIO/CTO."

Utah's CIO Val Oveson took the debate one step further in a recent panel discussion at the Government CIO Summit hosted by FCW Media Group. He suggested that the organization's chief executive officer serve as the CIO.

Although most officials see this as unrealistic, it highlights the movement of the CIO toward the business focus and the chief executive officer's inherent need to see technology as an integral part of the organization. More and more, CIOs and CFOs can't afford to be experts only of their core functions and must have an understanding of other areas of the organization.

"I don't think an organization can be successful unless the CEO is the champion or advocate for using technology to ensure the critical success factors," Schlosser said. "The best model is the CEO supported with a CIO with combined technology and business acumen."