Case study:

Scottish Power

IT chief owes much to financial background

Unlike many CIOs, Jim McEwan did not start his career in the IT industry. He was an accountant before moving into IT in the early 1980s. Today, McEwan believes his financial training is every bit as important to his success as any of his technical qualifications.

As director of IT with Scottish Power, McEwan works extremely closely with his finance director. ‘I am judged by financial performance, so everyone who works for me has to come up with hard numbers,’ he says. McEwan uses standard company-wide hurdle rates for all potential IT projects costing more than £100,000. ‘It basically says that for investment X, we expect certain results, depending on whether it’s an operational or capital expense,’ he says. This basically means a £1m capital investment has to return at least 20 per cent within a year to be approved.

But it can be challenging to fit every IT investment into such neat boxes, says McEwan. ‘Sometimes with IT, the investment is fundamental to the business, but does not make a good business case,’ he says. ‘So with security, we cannot make a great business case, but if we didn’t do it, we would be in big trouble.’

To ensure the IT department’s plans match up to this requirement, McEwan has his own dedicated financial controller, who ensures that all the numbers stack up before any business case is presented to the board. ‘It makes it much easier to have a good relationship with all the other finance directors,’ he says.

McEwan believes anyone with aspirations to become an IT director needs a working knowledge of finance. Without it, you risk not being taken seriously by the board. ‘I remember an old professor said to me once that if you don’t understand the numbers, you’re at the mercy of the man who can,’ says McEwan. ‘That’s definitely true for an IT executive.’

McEwan has also completed an MBA to help improve his own business and financial expertise. ‘Anyone who wants to be an IT director without understanding financial metrics and controls might as well just go home,’ he says.

‘Procurement, legislation, stewardship – those are all vital parts of the IT director’s job just as much as technology.’

The benefits of this close working relationship are clear, he says.

‘I have not had a single IT project knocked back because all my proposals met the needs of the finance department – and therefore improved the profitability of the business.’