The CIO steering finance and technology

To some, the IT and finance departments are as different as chalk and cheese, but a growing number of CIOs see the service requirements of the two key departments as identical. Roger Scholes is such a CIO, an IT leader who sits on the board of his company as the representative not only of technology, but also finance. Scholes is IT and finance manager for international vehicle parts supplier ZF Trading in the UK. The Northamptonshire-based company has been the sole organisation in Scholes’ decade-long career. In 1999, he graduated from the University of Huddersfield and joined the steering system manufacturer Lemforder. A degree- in computing and business analysis gave the Yorkshireman an “inquisitiveness and a desire to understand everything”, he says. Little did the cheerful young IT graduate realise that he had joined the German company at a prescient time, as great change was about to occur and his attitude would be his spring up into the highest echelons. Europe’s roads are dominated by German-made cars, trucks and buses, and the majority of these are fitted with drive-train parts such as gearboxes, clutches and suspension products made by ZF, also a German manufacturer. ZF Trading is the aftermarket division of ZF, supplying fleet maintenance departments and dealerships with spare parts to keep logistics on the move. It also supplies the car industry with ZF parts, which are found in many of the popular German sports saloons. As an OEM supplier, ZF Trading is in the luxurious position of being responsible for premium brands such as Sachs clutches, Lemforder steering systems, Boge springs and ZF gearboxes. Between 2000 and 2002 the four brands merged under the ZF banner to form a components power base supplying all the essential parts to car, truck and bus makers. “It made sense to be one company,” Scholes says of the consolidation that he was to co-ordinate. The ZF Trading arm, a more recent addition to the company portfolio, is a growing division. Sales within ZF Trading are split between the car industry and commercial vehicles. Typically, the car division is dealing with car part distributors, while the commercial vehicles department may be dealing directly with the maintenance department of a major bus fleet or HGV service agents. The merger of the four distinct brands under the ZF Trading banner was where Scholes’ career moved up a gear. He had joined Lemforder as an IT supervisor straight from university. Back then, he was responsible for a “little server room the size of a box cupboard”. As the company grew, Scholes says he was given opportunities to develop and to learn from his mistakes, something he places great value on. “Lots of mistakes come down to communications and trying to get the buy-in from users,” he says of the integration. Scholes believes that his university course and the interest he received from the management team, especially managing director Addy Doodt, gave him the confidence to understand the business. “You have to understand the business to offer a good IT structure; that means understanding sales and logistics,” he says. He now has the confidence to encourage colleagues to engage in a more open dialogue with the IT department. “I want people to pipe up,” he says. Scholes is adamant that although IT is central to steering a company into the -future, it is there as a service provider. “IT is a supporting role; it adds value, because with IT you can do almost anything.”

In 2004, two years after the merger, ZF Trading decided to standardise on the SAP ERP system, which brought Scholes into close contact with the IT department in Germany. Lemforder had already been an SAP user and Scholes and his team had to revise the SAP system. “At least 85 per cent of the work on the SAP system was done here,” Scholes says, and admits he was lucky the German half of the business had already brought all its SAP systems together, so he had a good knowledge base to draw on as well as a German IT team of 30. The project lasted eight months. Scholes bases the project success on his strategy of involving key users in the development, speccing out their requirements early on. “We had a wish list of preferred requirements. I then had to become a politician to understand why they can’t always be possible and look for a way to work around these issues.” Scholes sees the “politician” role as one of discussion. “If you don’t communicate clearly the intentions of an integration project to users, then you hit problems.” The integration went well, and Scholes puts a lot of its success not down to his department but to a user base he says he was “blessed to have”. Not only that, but when Scholes carried out some post-integration analysis, he discovered that the company had not lost any sales momentum.

Coming into money With a business and technology integration successfully under his belt, and despite his young age, the management team at ZF Trading felt their finance department needed a champion. So in April 2006 the head of IT became the head of finance. “Finance didn’t have a voice, and needed one to make it an integral part of the business,” Scholes says of the appointment. “Finance was seen as the people who pay the bills and then complain about how much stuff costs. Finance is like IT, it’s a support role to the business. Finance is a gatekeeper to funds.” Scholes has worked closely with all sides of the business to get them to understand the needs of the finance department, and for finance to understand the needs of the business. “We have to understand that we will have to make concessions,” he says with his finance hat on. “This has helped change the opinion within the business of where finance fits in.” Scholes says other IT leaders should not be scared of taking on the responsibilities of the finance department, and describes both departments as governed by procedure and support demands, as well as a dependency on data. It is not difficult to understand how Scholes can get teams to gel and work together. He has a youthful exuberance and down-to-earth attitude that no doubt suits the very practical world of commercial vehicles, component supply and manufacturing. He clearly enjoys the challenge of representing IT and finance at board meetings and understands their respective natures. “An IT manager taking over a finance department is a contradiction. IT likes to spend, and finance likes to save. But I’m a Yorkshireman, so I don’t like spending in the first place.”