Friday, September 11, 2015

How can CIOs convince the Board & Top Management of IT strategy

There is no stand-alone IT strategy. There is the only business strategy with IT as a key element.

Due to the increasing speed of changes and fierce business competitions, many IT organizations are at a cross road to either being transformed into a value-added digital engine for their business growth or being irrelevant as a cost center only. How do you define the strategic role of CIOs at Board Level, what are important skills they need to cultivate, and how can you convince the Board and top management of your strategy?

There is no stand-alone IT strategy. There is the only business strategy with IT as a key element. IT is business, and IT strategy in an integral part of business strategy. The IT plan is the series of steps required involving technology that enable the business strategy. It's sometimes hard to articulate the value of doing things right. It sounds counterintuitive when phrased this way, but if you ever had to fight for a budget, and it's always a fight, you must have found yourself in a situation where you can do something right and pay more now, or do "just enough" to meet the superficial goals and worry about the fallout when it comes. Perhaps, IT professionals should start building a database of stock pitches that help embattled CIOs to explain why it's worth to get things right the first time. A CIO as an IT leader needs to be a business strategist who co-create corporate strategy with IT strategy as a crucial element in it.

IT is easily split between two broad areas, and it has to master both: From an operation perspective, IT is the utility to keep the light on; and from a strategic perspective, IT is the value-added delivery that makes the organization different. Make this distinction clear to the business and make it clear that utility spend is rarely discretionary. But do question every element of utility and consider how it is delivered because the CFO dislikes cost that has no obvious benefit. If these elements can be delivered in another alternative way that optimizes the cost, then show the Board the options, but also show them the risk in the business term. For the delivery elements, engage directly with the business owners of these systems and have them provide the ‘revenue’ side of the equation of what value these IT elements deliver directly to the business. As long as your costs are below the ‘revenue’ figure, then the budget should be less of an issue. Such data-based communication is more convincing for the Board and top management to understand IT value and the strategy presented.

IT needs to present itself in business language, and embed your needs inside the benefit to the business: It is common to observe gaps between decision makers and IT experts mainly because of non-matching knowledge about technology or the different dialects they speak. IT must do what every other business unit must do: demonstrate that they have necessary utility costs under control via modernization and optimization and show that investment in key areas will make more money than it costs by getting the buy-in of the business owners. If you stand alone in front of the Board and try and sell ‘tech’ in any language, particularly in “IT” jargon, and then you deserve to fail. Embed your needs inside the benefit to the business, and if your ‘needs’ add nothing to the function of the business, and then seriously consider why you are presenting them in the first place. As long as you don't have the ingrained roots of how IT functions create values, businesses will never understand your strategy no matter which way you communicate it. Be diligent in planning your strategy to
-demonstrate some form of ROI that is worthwhile.
-ensure you have identified the risks.
-make sure your strategy has the detail behind it and create a roadmap that you will deliver on.
-be certain that you measure the RIGHT thing Right.

CIO is a serious partner in the inner circle of top management to creating value-added strategies and enabling deeper insights into the opportunities IT can do. Almost all CIOs interact at the Board Level - it is just a matter of degree. But the CIO as Chief Influence Officer, needs to be well prepared, make leadership influence when having opportunities. Forward-looking businesses need to be evangelists for the true CIO role that sits at the table and play a part in the business and bridge the gaps for, information and innovation, digitalization and globalization.


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