Wednesday, January 9, 2019

CIOs as "Chief Investment Officer": Improve IT Investment and Visibility

Digital IT leaders have to keep up for improving IT return on investment and stepping up for enforcing IT leadership visibility.

With the exponential growth of information and emerging digital technologies, IT faces an unprecedented opportunity to refine its reputation, also needs to take more responsibilities as a true business partner. IT has to catalyze change, focus on innovation, and enable business growth. Digital CIOs should understand business outside-in, help the organization generate revenue, improve IT visibility, investment transparency, as well as the overall organizational maturity.

Help businesses open up new channels of revenue: IT investment is costly and IT resource is limited. It is not so sufficient if it only keeps the lights on without adding further value to exceed the business’s expectation. IT must invest in and leverage appropriate technologies and solutions to generate valuable insights and help the business open up new channels of revenue and monetization within the enterprise and their ecosystem. IT management needs to make an objective assessment of IT overall fitness and check periodically by asking themselves as well as business partners: What return are you expecting? When do you expect them? What risk levels are you taking on? The resource allocation scenario needs to be transparent, helps IT managers take advantage of resource effectively, optimize cost, and improve IT capacity to ensure IT is on the right track of getting a high return from IT investment and being the trustful business partner. IT leaders need to take the bold move in pursuing strategic and innovative engagement with the business, help businesses open up new channels of revenue. IT value is measured by the optimization and consumption of IT assets in support of the businesses that are identified within the organization's revenue producing streams.

You aren't sacrificing the long-term viability of the portfolio for short-term gain: The art and science of Information Management are to optimize its usage, achieve business value, develop the long term business competency, and unleash the full potential of the digital organization. It’s not just for the quick win. Business leaders should be aware that in the digital arena, IT application and its dynamics have a significant difference compared to the previous age. Besides automation and information availability, IT applications blended with current digital technology trends can deliver significant benefit to business growth, such as real-time business insight, innovative products/services, as well as new business model design, etc. IT Portfolio management is also essential to successful digital transformation and as such, a comprehensive fusing of a firm's strategic business competency. Put the framework in place to map the strategic objectives into portfolio management. IT leaders need to strike the right balance of “run, grow and transform,” and from the budgeting perspective, continue to figure out what’s an ideal ratio to both “keep the light on” and drive innovation and business growth.

Convince management to continue IT investment: Forward-thinking industrial leaders empower and invest their IT boldly to be the strategic differentiator. IT efficiency and effectiveness is an ever-evolving state and sometimes it takes larger and not incremental investments to reach desired positions. Unfortunately, Many companies still perceive IT as a cost center. Many executives see that once IT reaches that state of "can do it," now want to start to milk the process but stop the IT investment. The readiness of IT for business initiatives is important, IT should be highly available and efficient internally that it should take minimum time to market. For convincing the board and top management to continue IT investment, digital CIOs need to tell their data-supported story about how IT brings tangible value to both bottom-line business efficiency and top-line business growth. The three keys to presenting IT value are financial returns, return timeline and risk. Just like any other investment. If you can present the IT portfolio in a manner similar to a business investment portfolio, it makes instant conceptual sense to board and C-level executives. The payoff of IT digital investment is not just for the quick win, but to build the long-term business competency.

Corporate IT has no choice but to embrace transformational change or literally face extinction. IT organizations have come a long way from being the pure technical specialist to being the trustful strategic partner for achieving the business growth and transformation. Digital IT leaders have to keep up for improving IT return on investment and stepping up for enforcing IT leadership visibility; recognizing the responsibility for ensuring that the business is better informed than competitors and nimbler at implementing the disruptive opportunities that are constantly emerging.


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