Today's CIO - Running IT as a Business
Traditionally IT has been considered a cost centre and support function. This has been the perception for many years. In the last 10-15 years or so, IT is being recognized as a core strategic function and the key differentiator in most organizations, perhaps more than any other function because almost every process in organizations have an element of IT enablement.
With IT being integral to running of almost all functions within the company, CIOs nowadays are perhaps the most important member in the company leadership team. The CIO is usually in charge of leading the digital transformation initiatives of the enterprise and actively involved in all innovations and business decision making. With most product launches and service offerings enabled on IT solutions, critical decisions in the feasibility and design are based on IT inputs and timelines. These are exciting times for a CIO and it is up to the individual to define his or her role in the organization cutting across artificial boundaries to actively lead and contribute to the growth of the organization. A CIO should proactively assist the business to create value proposition in terms of new products and services, and demonstrate technology as a strategic business enabler. The role of IT is shifting from managing IT operations to being the innovation driver of the organization. The CIO in many ways is like a CEO running IT as a business with each department being a customer.
"CIOs need to learn from each new experience and interaction with business counterparts and embed that learning into the IT group"
IT aligned to business
The IT organization’s relevance depends on its ability to leverage understanding of current business needs and future direction – and deliver solutions that create maximum impact. With IT as core to functioning of business, the aligning of IT and business is no longer the issue. Surprisingly only IT-business alignment has been a matter of debate in companies, not business alignment of other functions. This is because of the importance of IT in running of the business. IT nowadays not only drives the usual process efficiency and cost reduction projects, but also has mandates for conceptualising and driving revenue generating initiatives.
IT should report to MD/CEO since IT is involved in almost every business process
IT being involved across multiple functions in the organization gives it a unique position of being able to get a top-level view of the complete IT landscape in the organization. With rapid advancement in the technology landscape, the CIO needs to evaluate the suitability of adopting newer technologies within the organization.
IT is able to see
• the current state of IT in the enterprise,
• the needs of the organization in a holistic manner,
• which areas are interlinked with other,
• what initiatives touch which part of the organization,
• be able to act as an advisor to the functions in deciding what projects to prioritize,
• give inputs on deciding business priorities, and
• which new technologies are ready for adoption in the enterprise.
Therefore, in many organizations, IT heads now report directly to the MD/CEO and not to CFO or other business heads.
IT involvement from ideation of projects, joint responsibility
Traditionally IT has been only delivering projects, not participating in the project ideation and planning discussions. Today almost all new projects and initiatives require IT to be involved from the business concept stage, to validate the new product or service being deliberated, to give views on feasibility, and not after decisions have been taken and given to IT to execute. CIOs need to be more involved to understand business, to evaluate projects, be able to choose the right technology and partner, and demonstrate the value of the solution to their business colleagues.
Timelines and delivery schedules are decided in conjunction with IT. These projects are jointly owned by IT and the business function involved. With shared accountability, the success or failure of the projects is also joint. The traditional blaming of IT for non-delivery or poor execution is no longer the case.
Talk the business language, drop the jargon
The CIO needs to demonstrate high business acumen and be good communicators. Possessing soft skills and business skills is equally important as technical skills. As IT leaders advance in their careers from tech-focused roles to leadership roles with increasing responsibility, they must realize that a large part of their success depends on establishing strong lines of communication with senior executives in the business, and the ability to influence stakeholders. CIOs need to learn from each new experience and interaction with business counterparts and embed that learning into the IT group.
With IT becoming more and more strategically significant in organizations, it plays an instrumental role in contributing to the better functioning of almost all business departments. The IT department needs to be therefore much more customer oriented than ever before, just like as a company we need to be responsive to external customer needs. Business heads these days proactively engage with their IT counterparts during strategic and operational planning, and try to co-create value for the organization. Seniors in IT should develop their business domain skills and be able to understand business better to be able to add value. They need to be advisors to business, able to articulate in business terms what they are able to understand and appreciate the customer point of view. All team members should develop inter personal and listening skills, and be flexible and sensitive in handling difficult situations. Focus should be on business outcome and value proposition.
Business capability and technical capability are equally important. When we can separate the benefits from the technologies that deliver them and effectively articulate those benefits, then IT will be more easily accepted and embraced. Building good rapport and good working relationship with business colleagues helps.