Running IT Like a Business

In a recent survey of 456 CEO’s conducted by IBM, participants from around the globe cited revenue growth as their number one priority. While cost savings are still among the top ten priorities, 83% of the CEO’s in this study see growing revenue as their mission.

These CEOs expect all components of their organization to focus on revenue growth, especially IT, which is a key ingredient in all of their business processes.

This change in expectation combined with growth in outsourcing, revisions in legislation as well as the continuous evolution of technology causing rapid shifts in competitive advantage have resulted in a huge shift in what CIOs need to focus on in order to be considered successful by CEOs.

Today the CIO and his or her management team are expected to literally operate as the CEO and senior management team of a professional services organization.

The CEO and management may not say so directly, but when you add up all the services and results they expect, it definitely conveys this message. For example, a few of the services the IT team led by the CIO is expected to provide include:

  • Managing IT dollars as a portfolio of investments with the goal of creating the highest economic return.
  • Managing a cost-lean team comprised of versatilists (people who have expertise in a combination of multiple business and IT skills), as well as local and global partners.
  • Finding, engaging and managing local and offshore relationships and dealing with multiple cultures and remote relationships.
  • Exploring new IT enabled business opportunities for the organization.
  • Advising business managers on how to effectively launch and manage IT-dependent business ventures.
  • Driving positive change and organizational transformation that increases capacity, profitability and or competitive advantage.
  • Clearly, the executive who fills this “Herculean” role needs to focus her or his attention in different areas than their predecessors whose job was managing a team of techies, cutting costs and supporting the business.
    Today’s CIO is running an economic value-adding, change-driving business operation. The question then is “what can you do to effectively address this need for shifting your focus?”

    Here are just a few ideas on how to start going about effectively re-focusing:

    Structure your role as if you were the CEO of a professional services IT organizations and run your team as a business. Surround yourself with the same type of financial, client-relationship, operational, marketing and other skills that company CEOs do and, like any other top professional services organization, know your customer’s business intimately. (To learn more on this topic, I recommend you read Managing IT as a Business, by Mark Lutchen.

    Broaden your definition of productivity beyond IT and business cost cutting. In the past, productivity gains generally meant lowering the cost of providing the same amount and quality of IT business support services and other business services. Today, that’s simply not enough.

    CIOs should focus on increasing the overall business’ ability to secure more business as well as lowering cost across the entire company, not just IT.

    According to the Founder, President and co-CEO of Epitome Systems’ Vince Rogusky, the CIO that does this “becomes a business process change agent who improves both the ability to produce revenue via business process improvement as well as its profitability through cost efficiencies.”

    In other words, a highly-valued top (as well as bottom-line) senior executive.

    Become an expert in working with various cultures. In a recent exchange with Management Consultant Navneet Chandra, of Pedigree Consulting based out of India, we agreed that since most offshore outsourcing is financially driven, buyers are reluctant to invest in building cultural awareness, because they often do not see how this will impact the bottom-line.

    We also observed that these investments are vital to real long term continued success of these offshore relationships. Dr. Ted Sun, owner of an executive development company Creative Innovations Enterprises, eloquently articulates why this is the case: “You cannot communicate and motivate remote partners properly if you do not have a clear understanding of their beliefs and value systems.”

    To be effective in today’s multicultural environments, CIO’s and their team members must become masters of cultural diversity and learn to talk in various cultural languages in order to properly motivate and manage all of their relationships.

    We live today in a very exciting period in the continuing evolution of IT into a central part of the business growth engine. Re-focus your attention and position yourself to seize the biggest and best opportunities for your future growth and success.

    Joe Santana is an IT organizational development specialist and thought-leader and co-author of Manage I.T. He can be reached at [email protected] or via his Web site