Lauralee Martin, executive vice president and global CFO and COO from Jones Lang LaSalle, was self-admittedly not...
familiar with the data center environment just a few years ago. Yet her willingness to take on energy-efficiency and sustainability initiatives internally at her company helped her to better understand the IT world and, specifically, how important data centers are to the operations of companies.
Martin believes IT and finance need to better understand the languages, responsibilities and issues of each others' departments and have the ability to not only empathize with each other but to communicate effectively to keep costs down, keep projects from getting curtailed and look for energy-efficiency opportunities.
Martin recently spoke at the Uptime Institute's Symposium in New York City about bringing together IT and finance to find common ground. After her speech, SearchDataCenter.com had an opportunity to sit down with her so she could further elaborate on this important topic.
How would you characterize how CFOs generally think about data centers?
Lauralee Martin: The way I would have thought of it originally is that the data center is just a cost. You have a data center because you are processing things and you need to keep the underlining mechanics as inexpensive and efficient as possible. The wakeup for me has been really how transformative innovation has been the last several years, and has raised the power of information. Data centers become assets, not just a cost. They store some of the most valuable information the company has. The question is how do you use that as effectively as possible? That changes how you think about all the technology in your firm, not just silos of cost.
By job description, the CFO thinks costs, cash and returns. All CFOs want to be the partner to the business. When the CEO starts to think about something as a business driver, the CFO will jump onboard. That is the tipping point where you see the CFO's attention around this issue change.
There seems to be a disconnect between the IT and finance silos. Why do you think this exists?
L.M.: We create silos but don't know that we do. It may be the way we say, 'This is your budget." The second we say "your budget," we have defined a silo. We tell how you are going to pay. We may not have understood the consequences of that, but we define the silo. I think human nature is you want to do the very best around what your responsibility is. And by default that becomes a silo.
How can IT make the case to sell data center initiatives to the CFO?
L.M.: When there is a discussion about costs going up, [the data center manager] can explain the drivers of that and the choices that can be made.
CFOs are risk-averse. If they go to IT and they say, "No matter what, do not let the data center go down; I want 100% reliability," there are going to be costs that go with that directive.
Finance executives are going to ask what it is going to cost to keep the data center going. The technology person might say, "What part of that are you actually concerned about? Part of it? All of it? And here are your trade-off positions." The CFO is trained to say yes or no. They are not trained to be recommending the decision they are ultimately approving or not approving. Someone has got to give them another alternative that they may not be aware of. IT needs to go back and communicate. You need to give CFOs choices.
Conversely, the CFO should ask questions of the IT department. What do you think those questions should be?
L.M.: What are the drivers of your budget? Now, if the driver is the growth of servers or the growth of my data centers, I now have X amount of depreciation that is being built in. There is nothing I can do about those expenses, but the question is, what are you doing today that is going to impact the expenses for next year and the year after? Because I, the CFO, am seeing that as next year's locked-in costs, and I might want to think of that differently. I also say understand the strategy of the data centers. Is there something about our strategy that has a built-in cost that may be different than what we want.
It is better to look at it from an exclusive conversation between the CFO and CIO or do you think it can be something where the CFO has an initial dialogue with the CIO and then the CFO has an ongoing relationship with the IT department?
L.M.: I think a great deal of it depends on the culture of the organization and how they have their typical dialogues. I think the more powerful latter dialogue is always very healthy, because the more people that understand "the why," the more likely they are going to get "the what" right. If I just give you a directive, you may not know why I did that. I try to broaden the landscape and have the participants understand that their views and expertise are highly valued.
Are there any market forces out there that could cause these two silos to work together?
L.M.: Absolutely -- the fact that data centers and the costs that are associated with them are rising so rapidly. When they were subtly in the background, they were just part of the costs. Anytime you get any part of your operations growing at a very different pace from your overall business, it is going to get attention. I say the CIOs or data center managers get ahead of it, make your CFO look very smart today. They'll appreciate it, and they'll be your ally.
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