Finance vs. IT: Time for a Truce

Management and Finances
by Guest Columnist

By Bart Perkins

It’s the age-old battle—budget against the needs of the IT department. While frustration is understandable, IT leaders need to understand the financial policies that control the way IT buys infrastructure and systems. One tech writer has thoughts on how to move beyond the conflict.

Bart Perkins writes, “One thing that you’re likely to encounter in any IT department is resentment toward the Finance department. A staffer might be angry because ‘those bean counters in Finance who know nothing about technology’ directed him to buy one product when he wanted to buy a different one. Or maybe Finance approves the acquisition of an application, but it says to get the server version, not the cloud version (or vice versa; Finance’s decisions can seem maddeningly unpredictable). Or it outright rejects a request to replace a system that users consider to be a boat anchor. ‘Why?’ asks IT. Because, says Finance, that boat anchor can’t be replaced until it’s fully depreciated—never mind that that will be several years in the future.

“Without a grounding in your organization’s capital structure and financial practices, such decisions can make Finance appear arbitrary—a description that would amaze most people in Finance, who think of themselves as methodical, pretty much the opposite of arbitrary. In most cases, Finance has practical reasons for its decisions, but to IT leaders, they can seem to defy logic because they are completely unrelated to IT concerns.

“If you want to be an effective IT leader, one whose funding requests are usually approved by Finance, you need to take the time to understand your enterprise’s accounting practices.”

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