Global CIO: Prove IT's Business Value To Your CEO -- Or Else
CIOs face relentless pressure from CEOs to prove, in financial terms, the business value of the IT team and the IT budget.
Link Work To Company's Success
Let me come back to that survey data about job security. One of the reasons your team is feeling worried about their jobs is that while they know they're busy for 10 hours every day, they don't have a sense that what they're doing is important, vital, and essential to our company's success. And without that sense of direct linkage to the company's success, your team will never feel secure. You need to be able to tell them what they need to be doing to drive business success, how those efforts will generate business and customer value, and how we're going to measure their performance against those business-driven goals.
As you know, we work with executive-search firm Spencer Stuart on a regular basis, and to help you get an unmistakable sense of what I'm driving at, I asked them about trends they're seeing in the CIO role. They passed along these excerpts from a recent report they've prepared called "The Future Of IT Leadership: The Strategic CIO." I'd like you to consider how your business value can incorporate this type of thinking as expressed by State Street CIO Christopher Perretta and Motorola CIO Patricia Morrison.
"Formalizing the innovation process is more important than ever and we need to focus on and invest in the outcome of our innovation, as opposed to simply executing one-off tactics," says Perretta. He explains that large transaction-based systems being built today have to be designed in such a way that will make them relevant to the future market. "IT needs to be plugged into the long-term innovation plans of the business so that it can provide the capabilities needed when the commercial opportunity arises," he explains.
Servicing global clients in a very complex environment at a minute's notice requires dynamic, reliable, and effortless collaboration. IT must be able to respond immediately, regardless of where the team sits. "As organizations grow, the ability to instantly engage all the company's capabilities makes it not only a much more agile customer-focused provider, but a more formidable competitor as well," Perretta says. Social networking capabilities also enable the enterprise to bring the global workforce closer together, connecting the people who can accelerate delivery.
"A lot of CIOs typically had the luxury of controlling much of the technology environment, but that is no longer the case," says Morrison. "You now have to think in terms of innovating and supporting technology that is open to the public domain, not just the business world." This adds an extra layer of complexity in successfully meeting enterprise customers' needs since CIOs now have to think about aligning architecture with more publicly available applications and capabilities.
"There will be increasingly more outsourced work coming back in-house, and what will be left out-of-house will be transaction processes and services as CIOs focus internally on data and enterprise information management as well as insight and predictive capabilities," she says. If the 1990s was the era of ERP and outsourcing, Morrison says the next decade will be all about the dynamics of information.
"As CIOs, we need to be more focused in-house on initiatives that accelerate the value we deliver to the business by engineering robust and high-performing systems that anticipate business change and materially speed coding and testing," he says. Perretta believes this positions the business for growth and improves the efficiency and effectiveness of global third-party providers.
"In the next 10 years, CIOs will be driving revenue rather than just serving as an internal support system," says Morrison. From innovation to architecture, she explains that the role will be more externally focused.
I think you get the picture, Chris, and I think you have it in you to do a great job in this role. But you need to bear in mind above all else that a CIO is a business leader who sets and executes a business technology strategy that creates business and customer value. And if you can't quantify for me how you're doing that, then I can't have you as CIO. Let's talk soon.
Bob Evans is senior VP and director of InformationWeek's Global CIO unit.
To find out more about Bob Evans, please visit his page.
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