BALANCE OF POWER
It's traditionally thought of as a kind of check-and-balance system: The chief information officer is given a budget with which to map out an investment strategy. That strategy is reviewed by the management board, on which the CIO is likely to sit. Finally, the CIO sits down across from the chief financial officer, at which point the information technology strategy must pass the cost-benefit litmus test at the highest level of finance governance.
For the past two years at Shell Chemicals, however, the CIO and CFO have been sitting in the same seat, that of Rosemarie Mecca. Coming to Shell in 2001 with 18 years' experience covering marketing, finance, sales, human resources, and IT at Honeywell, Mecca is currently executive vice president for finance and business systems.
That is a unique pairing of responsibilities, according to Edward Prewitt, a senior editor at CIO Magazine. Prewitt, who covers management and leadership issues, says he has come across only a handful of top managers with both responsibilities. "There have been five or six, and it was usually only a temporary situation where a CIO left a company and they were looking for a replacement," he says. "Everyone said it was a lot of work."
Prewitt says the pairing is rare partly because of the historic grudge match between finance and IT management. "People from finance generally turn a jaundiced eye on IT, and IT managers say the finance people don't understand systems," he says. "This stems largely from the difficulty of assigning firm value metrics to IT systems."
Mecca has both jobs full time, however, and says that she sees the combination as more progressive than aberrant. "It's more of a contemporary way to do things and more the way of the future for big companies," she says.
Mecca views her position in the context of the integration of IT managers into key executive roles during the 1990s as companies came to realize the central role played by computer systems. These days, most CIOs at big companies have business rather than strictly computer science backgrounds, she points out.
Few, however, have as varied an experience as Mecca's, which includes finance, engineering, and business management. With degrees in financial management and economics from the Catholic University of America, Washington, D.C., Mecca went to work for the National Aeronautics & Space Administration in 1980 as a program manager before taking a job at Honeywell, the former AlliedSignal, three years later. When she left Honeywell, Mecca was running the company's hardware product group in Tempe, Ariz.
"If you look across other industries, you see people cross back and forth between leading businesses and running IT," Mecca says. That is especially true if you couple e-business with IT. In the chemical industry, for example, Fred Buehler, vice president of performance chemicals at Eastman Chemical, formerly headed the company's e-business efforts.
Just as a business background helps steer a CIO in the right direction, Mecca says IT experience--rare among CFOs--helps in making decisions on where to spend and what to expect in return. Mecca also has input from an investment committee made up of business and manufacturing managers. "We use stringent and traditional financial measures on payback and risk," she says. "We also look at where we want to be in 18 months and in five years."
"We use stringent and traditional financial measures on payback and risk."
MECCA IS CURRENTLY overseeing one of the biggest IT projects Shell Chemicals has ever undertaken--a worldwide implementation of an SAP enterprise resource planning (ERP) system. SAP will replace a complex, "homegrown" patchwork of business management software, Mecca says.
Most chemical companies tackled ERP network implementation five to 10 years ago, but Mecca insists that among large petrochemical companies, Shell is in the middle of the pack at worst. It may even be somewhat ahead, she says. This is partly because a number of large projects across the industry have been put on hold over the past two or three years. Other projects stopped short of worldwide implementation.
"But I don't think about it as first, last, or middle," Mecca says. "I think of it as who will best enable the use of IT." She says there is also an advantage to installing ERP software after the vendor has worked out problems experienced by the first wave of users. Some of these she witnessed firsthand. "I can tell you some stories from back in my days at Allied when these systems brought some of my customers' businesses down," Mecca says. "They were writing purchase orders by hand."
Colin Masson, an analyst at AMR Research, says combining the roles of CIO and CFO is rare but not intrinsically a good or bad idea. "I don't think it really matters," he says, "as long as the person in charge focuses on long-term value generation rather than short-term cost cutting." Mecca says an understanding of the connection between IT and the business keeps her focused on the value proposition. "The key," she says, "is to have the financial and technical breadth of experience to provide the best service to the customer and run the company in the most cost-effective manner."