Given the current global environment and the competitive advantages technology can provide, it is interesting to see that the role of CIO is typically not present in the boardroom of most medium to large organizations. Other corporate functions are usually present such as HR, legal and finance, with IT typically reporting into the COO or CFO rather than the CEO.
Why is IT left outside? Does this mean these organizations don’t have a vested interest in IT or simply view IT as overhead rather than a strategic enabler of business change? How does the IT organization make itself more relevant to boardroom discussions?
In order to earn a place at the table, IT needs to demonstrate the ability to drive competitive advantage by demonstrating cost competitiveness and high ROI on technology investments; and understanding and working closely with the business to create and deliver innovative services and products for external customers.
So how to change this? How does IT become more related to the business?
Critical Enabler No. 1: IT must be seen as a value-add provider – IT needs to move away from being seen as an uncontrollable expense and demonstrate cost competitiveness and high ROI. Frequently IT conversations with the business focus on reactively answering the question on “Why does IT cost so much?”
To address this concern, IT needs to take time to breakdown associated costs and clearly demonstrate the added value it brings in a proactive manner to eliminate any view that the costs are unjustified. This is an opportunity for IT to educate the business in explaining the additional value provided when compared to alternatives.
Mature mechanisms exist for managing the cost of IT, one of which is to develop and implement a business-facing service catalog as described by ITIL (IT Infrastructure Library). ITIL is strongly focused on delivering value to the business through its main principle of running IT as a service without the business worrying about specific costs and risks.
The service catalog is a great way to lay out exactly what IT offers — in business terms, mapped to business processes. This not only helps the business understand what IT provides but also helps to educate the business on what costs make up IT and how the business’s own behavior can help control costs through consumption.
Developing service catalogs involves direct interaction with the business and can help develop relationships at a senior level as well as support competitive advantage by providing differentiated “fit for purpose” technology services to the business.
As technology has advanced so has the language and hence the need for IT to refocus its raison d’etre and learn to adapt its message to their audience. IT should steer away from purely focusing on technology towers and talking in IT jargon but develop skills in describing IT services in terms of the business processes that it supports (e.g., number of transactions, invoices printed, etc). It is key for IT to operate in terms of business outcomes, not technology outcomes (e.g. new direct-to-consumer lending model implemented vs. just providing Web services and hosting).
This is the opportunity for IT to prove the added value it brings by demonstrating competence and expertise in how to leverage technology for greater business benefit. The need to stay abreast of technological improvements is still critical but any adoption of a technology must show clear business benefit and not just be linked to a “Wow!” factor. Developing clear technology roadmaps is a catalyst to building the business case for adoption and maintaining alignment with the wider business strategy.
Critical Enabler No. 2: Communicate and organize around the business – Developing and maintaining relationships across the business is key to ensuring that IT understands the business and how it operates. The conversation with the business must mature beyond simply keeping the lights on.
While it is paramount to provide stable and resilient operations, IT needs to ensure adequate focus is made on strategic and technological advancements. IT must keep its ear to the ground to determine the people, process and technology enhancements necessary to provide the business greater efficiency and competitiveness while also striving to innovate to reduce complexity and costs.
Establishing formal dialogue with the business by implementing an organizational structure that shows clear mapping to business departments and segments will ensure the lines of communication remain open. Utilizing this approach to gather feedback and use this information to develop service improvement initiatives will ensure high customer satisfaction and provide IT with much needed information on the strategic objectives of the business.