Monday, July 22, 2013

Is IT at Cross-Road?

The focus of the CIO’s role has changed from product-oriented to client-oriented.

IT organizations are facing significant transformation, perhaps crossroad is an appropriate word to articulate IT position since CIOs seem to fall into two camps. The first is the "utility" CIO who competently manages a complex technology infrastructure but is not on the "go-to" list for implementing the strategy. The latter is a "value" CIO who has delegated infrastructure management and well articulates how information and technology can accomplish the company's strategic and tactical objectives. So what is next for CIOs beyond the crossroads? How can CIOs enable high performing organizations, and in return, their organization's leverage high-performing CIOs?

1. IT is Business

 CIOs and other business executives have used the expression ‘IT and the business’ which implies that IT is not part of the business! This invisible divide needs to go away, and CIOs should market themselves and the traditional IT function as an integrated component of the company, and IT is an innovation engine for businesses:

  • CIOs need to become business leaders within IT and seek ways to grow revenues, profitability and spur innovation. That's a completely different mindset than managing technology only. Leadership towards true value creation for any organization will come from the willingness of its leaders to knock down the barriers separating insulated IT teams and the revenue-generating business ownership teams. 
  • CIOs must astutely focus on the core competencies and business strategy of their organization. Once their orientation shifts towards this plane, it is easier (although not easy) to then optimize their organizations to execute for long-term value creation. Intimacy with business challenges and the ability to address them by application of IT in a manner that offers a competitive advantage is key. One of the fundamental problems facing CIOs when dealing with their CXO counterparts is where their priorities lie, as these can at times be opposing requirements. Therefore, to become a trusted advisor, it is important that the CIO can be seen to "stand aside" from the operational issues and look at things from the top management perspective.
  • The IT strategy should be part of the business strategy and approved by the business unit, not just IT. Additionally, clearly defining and communicating value is essential. Joint strategies should be developed in all areas of business (Run -Grow- Transform) across geographies, industry verticals, and laterals. In other words, the goals should be like the goals of the business executive and not limited to availability, cost and customer satisfaction levels.  

2. A Customer-Centric IT

Unless IT understands the needs of its internal and external customers, it will be unable and possibly unwilling to develop a system and process differentiation that leads to the kind of competitive advantage, that will propel the organization's growth and profitability. Any CIO that masters and successfully accomplish this transition for his/her firm can surely be respected as the true C-level business leader.

  • CIOs need to strategically work with their clients: They could be other C-level executives, business line managers, general IT users or external customers, etc., to provide business solutions instead of products. This includes being business savvy, client service oriented and reputable as trusted advisers. This is measured by the value the CIO brings the solutions to their clients’ highest priority business problems. This also means the CIO needs to carefully listen and has to sell or resell the management on allocating funds for the solution project which was in the budget but has a tendency to be cut.  
  • The focus of the CIO’s role has changed from product-oriented to client-oriented: It's not necessarily a "client vs. product" centricity issue, but more one (product) enabling the other (customer-centricity). The CIO is running IT as a software company, their SW applications are a key part of the core value chain of the business, and they manage applications as products: with incentives on how much revenue they generate, on customer satisfaction, on strong quality assurance, on market acceptance, etc. this could be a growing trend in all those markets where IT is becoming more and more as revenue generator. 
  • The evolutionary path is to evolve from data to information to knowledge to intelligence: Often, IT tends to miss the "I" in the "CIO"'s title and tends to de-facto replace it with a "T" for technology. In the era of cloud, social, mobile and Big Data, CIOs have a unique position and opportunity to lead with information in the corporate ecosystem. “I” is the lifeblood of digital business and IT needs to focus on providing innovative customer solutions via capturing business insight and foresight. 

3. An “Internal Marketing” Approach

A CIO has to ensure IT operations run, projects are delivered and the company gets IT leadership while stakeholders feel supported, on top of that he/she must demonstrate the value, their organization adds, and IT has been portrayed as a value creator.

  • CIOs should in effect plan and execute a real program of 'internal marketing': This does not mean looking for ways to 'spin' or puff up the position of IT within the enterprise; it DOES mean knowing who your clients are -- internal as well as external. It means knowing where they stand now, and what you must do to move them from where they are now to where you want them to be.
  • A real 'marketing' approach permeates everything about the way the CIO leads in the business: It influences how you communicate about the operational crisis, it drives how you deliver services to your end-users, and it sets the agenda for every single communication action you take with everyone else in the 'C'-suite. All the tools of 'real' marketing should be in play -- a structured segmentation of your internal customers, a focus on key messages that need to be delivered, specific roles in the organization with responsibility for managing relationships with internal clients, a communications plan with actions/ channels/dates.  
  • Every project should have its own ‘marketing plan’: The ultimate goal is to push the IT organization to be clear about its position via the company's core business strategy. Once that's clear, the CIO must re-enforce that position by demonstrating every day how IT contributes to it. Managing operations? If the quality of the operation is not aligned with the company's strategy, it needs to be fixed -- and the CIO needs to be talking about what it takes to move in the right direction. Delivering projects? Every project should have its own 'marketing plan' focused on exactly how the project adds value to the enterprise. Running an IT organization? You have to remember that your employees are in themselves a segment of your internal audience, with needs for specific kinds of information about how to achieve the company's goals. 
Indeed, IT is at the crossroad, either move up value chain & maturity level or get stuck as utility & cost center. IT needs to be ‘propositive,’ which is always giving ideas, leading ahead of the pack and breaking the status quo. Improving IT maturity is a huge and continuous task that definitely needs to be driven by the CIO. If the forward-looking organization is supporting the CIO in this endeavor then it is a huge boost, but the ball lies clearly with the CIO. 


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