Why CEOs and Other Top Execs Need CIOs, and the IT Team
As a customer-focused business leader, you may not like IT. You may even think everyone in the IT department is socially awkward because they spend more time interacting with computers than people.
But whether you like it or not, if you want to close sales you’re going to have to invite IT to your business meetings.
Perish the thought that anyone from IT will sit in on a sales call. However, it’s important to sit down with your IT team and listen to what each person has to say about the state of your technology. Otherwise, there’s a pretty good chance you won’t have to worry about sales calls.
There won’t be too many of them.
Maybe your company has already bridged the divide between IT and the business units. After all, the most successful businesses are those where both the businesses and IT work toward the same goals.
However, anecdotal evidence suggests there is still a long way to go in most companies. The business units and IT invite each other to strategic planning meetings, even when technology is an integral part of pending purchasing decisions.
A recent report from Gartner looks at this issue in detail. It found that while IT is more and more a key component of all business initiatives, CIOs must work with business executives and the CFO to ensure the critical contribution of IT is incorporated early in planning and budget processes.
Traditionally, this has not been the case, according to the report, How CIOs Influence Decisions When Every Budget Is an IT Budget. Cassio Dreyfuss, research vice president at Gartner and co-author of the report, explained:
In the past, the use of IT to support the business came almost as an afterthought, long after the business strategy and strategic initiatives for the coming period had been designed and sanctioned by top management. Over time, IT has graduated from being a support tool to being a business enabling and a business creation tool. Under that much broader and inclusive perspective, it makes more sense to talk about IT-related expenditures in each and every business initiative and respective budget. In this way, the CIO is challenged to adopt a higher profile and actively engage in opportunities to influence IT decisions in business budgets.”
IT Budget Decisions
Each company has its own process for IT budget decisions. These generally depend on external variables (the business environment) and internal variables (the company culture and style).
The CIO has unique contributions to IT budget decisions in all organizations. However, CIOs must understand the business challenges and work styles of the organization to make their points successfully. “The road toward a digital future requires transformational action from IT through disruptive innovation while continuing to run business as usual at the expected level of excellence. IT must therefore operate at high-performance levels in two modes,” Dreyfuss said.
Those two modes include:
- Enterprise-strength IT: An IT department that is responsible for delivering efficient IT services across the enterprise
- Opportunistic IT: This is an IT department that is ready and capable of reacting to new business models and opportunities immediately
Either way, IT should have five principal inputs into IT spending, as follows:
1. Solution Brokers
CIO’s should be playing the role of solution brokers in each business area that relies on technology. That means they should bring IT solutions form one area of the business to another, as appropriate, and also be developing specific solutions for specific business objectives or problems.
Because IT managers have — or should have — a view of all the IT solutions available across the enterprise, they can also help integrate, coordinate and align IT with business objectives. The enterprise that leaves IT out of this process risks misaligning technology and business.
2. Supporting Corporate Strategy
IT departments should also be in position to support the wider corporate strategy as defined by the enterprise leaders. This means that IT development will correspond with corporate guidelines and strategies and follow a coordinated and integrated IT development process that ends up as part off the corporate strategic planning.
During the development of this IT strategy, business units, top management and IT should agree on IT funding priorities. The ideal situation is for these decisions to be made by a committee consisting of business and IT leaders. Gartner’s strategic planning approach also places “support the business” IT budget to fund its operations plan.
3. Dynamic Collaboration
Many business initiatives take place in very challenging environments that require immediate responses to a particular set of problems. To manage these problems and to ensure successful outcomes, resources across the enterprise need to be mobilized to achieve these outcomes.
CIOs and IT leaders have a special and dual role here. They will shape each initiative according to the IT resources available and decide how each initiative should connect with core enterprise applications.
4. Opportunistic actions
The CIOs role here is to focus on each specific initiative depending on the situation and the response required by a given business or business area. They have key roles here in ensuring that targets and objectives are met on time and as rapidly as possible. CIOs must also be involved in making core applications available according to how initiatives develop.
5. Unique IT Roles
There are a number of things IT brings to the corporate table that no one else can bring. They include:
- Information architecture: They know what data is available in the organization and where it is located
- Business process networks: Deep knowledge of business process across the entire enterprise and how they meet enterprise goals
- Operations infrastructure: Mastery of all the processes that deliver necessary information to those that need it
- Technology scenario: Comprehensive perspective on the technology scenario and possibilities to achieve business goals
CIOs Future Role
IT plays an important role in any organization. In fact, it could be argued that the role of the CIO has never been more important. But it seems many CIOs are aware of this: 75 percent of respondents to a recent Gartner survey on the future of the CIO stated that they need to adapt their leadership style in the next three years to changing enterprise realities.
The survey entitled Flipping to Digital Leadership: The 2015 CIO Agenda (not yet available to public), included responses from 2,810 CIOs, representing more than $397 billion in CIO IT budgets in 84 countries.
It also shows that most enterprises are aware that digitalization is no longer a sideshow — it has moved to center stage and is changing the whole game. However, this is an opportunity for CIOs to seize or lose the advantage to other departments.