Cost cutting and integration issues aside, one of the biggest challenges faced by CIOs today is providing measurable value to their customers, i.e., the other business units within the organization.
And, with most of the more laborious and mundane business processes like accounts payable already automated, IT’s value today is being measured more incrementally through things like better customer service brought about by CRM or increased productivity via the installation of a corporate portal. And even these enterprise-wide initiatives, new as they are, are being purchased in smaller chunks as CIOs zero in on solutions that solve very specific problems, said Craig Lawton vice president and director of Boston Consulting Group’s America’s IT practice.
For today’s CIO, finding ways to provide (or prove) value is becoming less about technology (provided the plumbing works, of course) and more about finding creative ways to apply technology that increase the ability of his or her customers to either generate more revenue, run more efficiently or streamline business processes to achieve both.
CIO as CEO
To do this, CIOs have to view themselves not so much as managers of technology, but as CEOs in their own right. And, like a CEO, their No.1 concern should focus on how best to increase their company’s profits by providing, in this case, better service, said Cap Gemini Ernst & Young’s America’s CTO, John Parkinson.
“It works best if the CIO thinks of himself as the CEO of a service provider to his business,” said Parkinson. “So, he’s got to go find places where the capabilities the IT organization represents can improve the capabilities the business needs to be successful.”
What this means in practice is partnering. CIOs need to work with the other areas of the business to find the places where technology can really make a difference. No more technology for technology’s sake or because your business rival is doing it. If there isn’t a clear business benefit arising from the implementation, perhaps the implementation should be shelved, said Wick Keating, CTO of AMS.
“A key role of the CIO is to help people understand what is possible or, in some cases, almost as importantly, what’s not possible or practical or affordable,” he said. “What they have to do is become consultants because a good consultant asks lots of questions and listens.”
A Little Understanding …
More than ever, today’s ROI must begin to appear within six months and be fully vested inside of 12-to-18 months, said Lawton. In order to achieve this, CIOs need to first look for projects where a relatively small investment will bring about measurable dividends. And, in order to find those pockets of ROI, the CIO needs to work very closely with each business unit to understand what needs improving and where IT can help.
This is not easy and is a two-way street — those same business unit managers must also include IT early on in their thinking and strategizing about new projects. If done in a collaborative way, where IT and the business unit work together from the beginning to solve a particular problem, then the benefits can be achieved much more cost effectively and quickly, said CGE&Y’s Parkinson.
“There’s a subtle balancing magic here the IT organization has to master,” he said. “It has to learn how to listen to its customers, who generally say what they want, but too often also add how they think it should be done without understanding what is possible.”
It is precisely this lack of understanding, both on the part of IT for not understanding just what the business units are all about, and on the part of the business unit managers that view IT as black magic and sorcery, that leads to frustration and finger pointing. Bridging these gaps to achieve a mutually desirable outcome is where IT is headed today and the only way to get there is through improved communication and collaboration, said Parkinson.
“It comes down to effective communication and a willingness to collaborate,” he said. “You have to learn to work with each other in a way that each party trusts the other is doing its best even when what you get isn’t perfect.”