15 Jul 2010
The past 18 months has seen immense pressure on IT budgets and, although most of the global economies have moved out of recession, 2010 is seeing only a cautious return to growth. Business and IT leaders will therefore need to balance this low growth environment with a continued requirement to drive businesses efficiently.
For as long as there have been computers in the workplace there has been a widespread perception that there is a gap in understanding between people who are selecting and implementing IT Systems and the rest of the organisation who use and benefit from them.
When it comes to CEOs and CIOs, research from Gartner and The Wall Street Journal in 2007 found that whilst CEOs are becoming increasingly aware of alternative options for delivery of IT within their business, there is a disconnect between their views and those of their CIOs. The research found that when CEOs and CIOs were asked about the amount of change necessary to compete in their markets, 38 percent of CIOs said significant change was needed, whilst only two percent of CEOs saw a need for significant change.
But, in modern business, where technology plays such an integral role in business success, does the ‘Venus and Mars’ cliché still apply? Certainly, in my experience of working with CEOs and CIOs in FTSE100 companies and large government departments, the gap has almost closed. There are an increasing number of CIOs, particularly in IT-dependent business (such as banks), who are taking up Chief Operating Officer (COO) roles and developing skills that allow them to work even more effectively with their CEO’s to deliver what the business needs.
So what does it take to align the ‘planets’ of CEO and CIO?
1. Question the importance of CEOs understanding technology?
There is a big difference between designing microprocessors and designing a CRM system. CEOs do not need to know the nuts and bolts of what the IT team are doing. They do need to understand and empathise with the challenges faced by the IT team, in the same way they have to with the sales or product design teams.
2. Communication is key
Whilst there can be a communication issue between IT and other parts of the business, there are often similar communication challenges between other departments, often regarding the same issues or because of the company’s general approach to communication. If a business operates globally, local culture will play an important role and this is not unique to IT. Developing clear communication structures and processes between the IT team and commercial part of the business will help overcome communication issues and bridge gaps.
Seconding people from other areas of the business to run or work within the IT team can be a powerful tool in helping organisations bridge some of those communication gaps.
3. Aligning IT strategy and business strategy
For CIOs and the IT team it is important to recognise that IT can provide a better understanding and more context around strategy so the organisation can make more effective business decisions.
In other words, treat the whole IT infrastructure as a service and focus on what makes a difference to that service, rather than simply focusing on the technology itself – even if there are some new fancy, shiny gadgets that Board members are desperate to have. By focusing on service and developing new skills around cause and effect, CIOs can identify bottle necks and successful processes in the same way as the director of any other department in the business.
In newly commissioned research for Xantus, there were some interesting findings regarding CIOs’ search for available skills. In particular, 81 percent either strongly agreed or slightly agreed that as an IT department, they still need to raise the skills they have to manage their relationship with their key suppliers.
4. Focusing on the dichotomy between reducing cost and delivering innovation
Currently, there is an increasing focus on the dichotomy between reducing cost and delivering innovation. Can CIOs do both? In the past, before the downturn, there were a lot of people who were very excited about what could be achieved with new technology. In the last year, the pendulum has swung more towards reducing costs. Clearly there is a need to focus on an approach which both reduces costs and innovates.
5. Skills as a trusted adviser
In the past, a lot of people within the technical IT function lacked certain skill sets in order to position them as trusted advisers to the business. More CIOs are now able to articulate how IT makes a difference to the business as a whole, rather than treating it simply as a manufacturing department.
However, CIOs themselves are finding it difficult to find IT recruits with the softer skills to help manage their relationship with the business. Xantus’ research found 91 percent of CIOs find it difficult to find the softer skills rather than technical skills, and 96 percent either strongly agreed of slightly agreed that as an IT department, they still need to raise the skills they have to manage their relationship with the rest of the organisation.
To truly align the CEO/CIO planets, CIOs need to broaden their capabilities to think like a CEO even if they have no aspirations to actually become one. Develop strong networks across the business and look at the organisation from outside the IT department, having the breadth of vision to see challenges from other perspectives.
For an increasing number of organisations, IT is the entire capability of the organisation, so CIOs are starting to recognise that their decisions are strategic for the whole business and not just IT.