The CFO has a key role in consolidating systems and streamlining organizations, according to two senior executives offering their recent lessons learned. [Article republished from Microsoft Executive Insights Website]

One of the biggest challenges faced by CFOs and other corporate leaders these days is optimizing systems, processes and people. Consolidating overlapping systems, identifying redundant servers, introducing improved technologies and revamping an organization to reflect new business conditions are becoming routine events these days at large organizations.

Two experts at managing these kinds of changes provided their insights at a February 2006 conference in New York City hosted by CFO magazine. After their presentations, Timothy Reed, vice president of enterprise systems at financial services data provider The McGraw-Hill Cos., and Robert Young, Chief Financial Officer of the Teradata unit of NCR Corp., shared some of what they've learned about recently steering large organizations in new directions.

An edited transcript of their presentations and follow-up discussions follows.

Executive Circle: What have been the roles of the CFO and the CIO in your recent strategic business or technology shifts?
Robert Young: We dealt with this very question at NCR. An important part of our transformation from a hardware company to an integrated solutions provider was a data warehouse that allowed us to pull together financial and operational data from across the global enterprise. We concluded it was appropriate for the CFO to lead the warehousing initiative.

The CFO is in a unique position to understand the organization's strategy, objectives and tactics. The CFO is skilled at metrics and knows a lot about how to put data in a framework that's meaningful for the entire organization.

Clearly, the CIO also plays important role in corporate transformations. Organizational and process changes need IT support, so you need the CIO's participation.

Timothy Reed: I also don't think of it as an either/or model. A joint team with the correct executive steering committee has worked for me. The problem with a one-leader scenario is that ultimately someone will not buy into the change or will think of ways to avoid it, which impedes the whole effort.

To me, if it's a change effort focused only on process, the CFO should lead it. But if it involves technology, the CFO and CIO had better be joined at hip. If they're not, you're going to run into problems.

Executive Circle: How have you encouraged staff to embrace the new approaches? What are your lessons learned from recent deployments?

Robert Young: We used our enterprise data warehouse to produce a standard set of detailed management reports. This capability was a critical enabler of successful change management because it empowered our teams to consistent and continuously updated information. The data warehouse significantly lowered our costs—in multiple millions of dollars—and accelerated our productivity.

What's more, we were—and still are—able to track usage of the system so we know who is actually using, or not using, the reports.

Timothy Reed: When you're teaching people some new process or some new tool, you don't want to rely just on external trainers. Use 'train the trainer' techniques and identify champions of specific processes or portions of the new system and empower them to charter and rollout training and learning that will work within their environment.

When people see how some piece of software empowers their coworker to do more or eliminate a process, they're inspired. It's very powerful. 

Executive Circle: Given the rise of Internet time, where business and process changes seem to come more rapidly, is there a limit to how much change an organization can handle? If so, how can you tell when you've reached your limit?

Timothy Reed: Yes, I think every organization has a speed limit. The successful organizations identify that there is an issue with speed and approach the lack of speed as a problem to be solved. My experience is that the speed limits are real and the great change agents are able to quickly identify the speed bumps and overcome them.

Robert Young: The limits are not always things you can predetermine. One of a change leader's critical skills is the ability to continuously monitor what's going on. You have to understand when something's going to break or people aren't going with you.

I will say, though, that the speed limit is higher when people understand where they're going, why they're going there and how to measure their progress. And the way they understand is through repeated communication. Give people good information that's truly linked to their work, and they'll change.

Executive Circle: How do you keep team members engaged and motivated?
Robert Young: People have to understand what they're doing and why and how to measure success. It's sometimes easy for leaders to forget that people want to make their organizations better. Your job is to create an environment where that's possible. Have resources available to solve problems and fix things.

For example, it hurts engagement when you can't respond to good suggestions. Help people contribute, and reward them for it. Rewards take many forms, one of which is personal satisfaction.

Timothy Reed: Watch for burnout, too. If you see a lack of attention to detail, or if people start to miss sessions or show up unprepared, rotate them out. As Bob says, you have to be able to monitor what's going on.