Bethlehem Steel Meshes IT, FinanceBethlehem Steel Meshes IT, Finance

Bethlehem Steel's IT department will see a few changes in 2002. The group is now part of the steelmaker's business-services division, which includes transactional and technical services from accounting, human resources, and law. In addition, the previous head of IT, Thomas Conarty, will retire at the end of this month. Conarty, 51, was senior vice president and chief of procurement and information technology, and will not be replaced. His post is one of several senior positions that have been cut, a spokeswoman says.

Heading up IT is Larry Clees, director of IT who reported to Conarty. Under the new structure, he will report to VP of business services Ed Reybitz, who was previously a controller at Bethlehem and is a direct report to the company's CFO, Leonard Anthony. When Conarty was CIO, he reported to Duane Dunham, president and chief operating officer, who also retires at the end of January and will not be replaced.

Bethlehem's change in management structure is no surprise, considering the possibility of near-term industry consolidation. U.S. Steel has said it may acquire Bethlehem, which has been hit hard by the steel industry's downturn. The company filed for Chapter 11 bankruptcy in October 2001, and has cut 25% of its non-union workers since June 2001. Bethlehem was unable to say how many of those were IT workers.

It's not the only company that's establishing closer links between finance and IT. Burger King's CIO Tom Giordano left last year when CFO Bennett Nussbaum joined the company, since Nussbaum would be responsible for overseeing management information systems. While some IT execs balk at the idea of reporting to "bean counters," others say oversight by the finance department actually benefits IT. "Many IT departments look at the CFO's organization in a somewhat adversarial way," says Sean Magee, VP of IS for Lanier Worldwide Inc., who reports to the CFO--and likes it that way. At Lanier, falling under the CFO's purview meant that IT and finance worked more closely together to develop an ROI methodology. "This has gotten the finance department more involved with identifying the benefits and costs of projects," he says. "As such, they are partners on decisions related to which projects are approved vs. delayed."

Ultimately, IT execs shouldn't obsess about their bosses' title, says Magee--a CEO report won't be guaranteed proper recognition any more than a CFO report will. Instead, says Magee: "The CIO should report to the 'C' level that has the greatest interest and bandwidth for IT. What value would there be reporting to the CEO, if he/she was not able to spend appropriate time with them?"