Friday, January 12, 2018

The New Book “12 CIO Personas” Chapter X The CIO as “Chief Investment Officer”

 IT should become known as a revenue rainmaker by associating its efforts directly with sources of income.

All ambitious businesses strive to unlock their business potential, to reach the next level of business growth cycle and maturity. Nowadays, technology is the disruptive force behind digital transformation and information is the gold mine all forward-thinking businesses are digging in. CIOs as “Chief Investment Officer”: How to unleash IT-enabled digital potential?

IT potential is an investment, improving revenue and catalyzing business growth: IT needs to be understood and harnessed by all stakeholders to fulfill the business potential. The potential is realized via wise investments. IT needs to be telling business about the opportunities and possibilities and that means IT needs to really understand the goals of the business. IT leaders should become the business advisor, and make sure that the executive team first understands what it needs to drive future business growth via unlocking the business potential, put the framework in place to map the strategic objectives into performance management. Digital businesses empower their IT because digital IT can drive all sorts of innovations, proactively push ideas on how to leverage technology to drive revenue growth, increase business productivity, flexibility, and maturity. IT and business should work closely to assess performance and potential benefit from IT investment portfolio, and then determine what IT investment will accelerate the changes you want to see in your performance indicators.

Manage “SOFT” IT asset effectively to improve the organizational maturity:
Information and knowledge are soft assets of the digital organization. Information doesn’t live alone but permeates to everywhere in the businesses, and information assets need to be managed successfully. The focus needs to be on the conditions that allow information and knowledge to flow and generate value rather than try to manage or control. Information Management and Knowledge Management should be managed more holistically as the corporate asset if done properly. IT competency, especially the ability to make the continuous improvement with consistency is the soft asset by which organizations can differentiate themselves from competitors and reach the next cycle of growth and unlock the digital potential of the business. In fact, managing soft assets effectively is the prerequisite to accelerate change and digital transformation.

Running high-performance IT with multi-layer ROIs: Traditional IT organizations are perceived as the cost center because IT cannot communicate with the business via the tangible value IT can bring to the business either via increasing the top line business growth or improving customer retention rate. IT value-based management needs to be driven by concepts like collaborative value or collective advantage and multi-layer ROIs. IT leaders need to have a seat to contributing to strategy making proactively and IT should become known as a revenue rainmaker by associating its efforts directly with sources of income. IT performance with multi-layer ROIs should be demonstrated through the rate of productivity increases, the rate of productivity increases, the rate of new products/services development, the rate of new market share gains, the rate of customer satisfaction and retention, and the rate of market shares gain.

Digital CIOs need to be “Chief Investment Officers,” the success for the CIO is based on how their departmental KPIs are performing and how aligned they have been with their contribution to the corporate performance. Although different IT organizations and the enterprises are at the different stage of the business maturity, managing soft asset effectively is the prerequisite to accelerate changes and lead digitalization.

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