CIO issues: The search for relevance

CIO issues: The search for relevance

Summary: IT continues to struggle for relationship and relevance among senior business leaders, which undermines CIOs' ability to create successful IT programs and initiatives.

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TOPICS: CXO
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A new study from InformationWeek, called Enterprise Apps 2011: Focus on Business Relevance, reinforces the message that IT continues to struggle for relationship and relevance among senior business leaders. This fundamental issue undermines CIOs' ability to create successful IT programs and initiatives.

The report opens with an important theme: "What IT organizations want most is more engagement and support from business leaders and colleagues," as summarized in the following table:

Here's a list of issues in the table:

  • More support from top executives to implement new policies or procedures companywide
  • Better input from end users when gathering requirements and reviewing project progress Better guidance from business leaders on the most important processes, measures, and metrics
  • Better training programs and adherence to completion to ensure adequate user education
  • Additional financial support and/or staff to support me and my projects
  • A clearer sense of corporate strategy from top executives
  • More direction from business leaders on aligning operational initiatives to strategic goals
  • Establishment of a formal competency center or “center of excellence” with broad support from business and IT
  • Better ongoing technical/help desk support in the wake of new technology deployments
  • More thorough vetting and pilot testing of prospective technologies to avoid bad choices

It's significant to note these are not technical obstacles. Rather, the data shows that IT professionals seek closer working relationships with operating personnel and executives from the lines of business, which the report calls "relevance."

Although not characterized as such, these points represent a laundry list of reasons that IT projects fail: insufficient executive sponsorship, unclear business goals, lack of clarity around requirements, incomplete user training, and so on.

The irony of failure. According to the research, IT professionals believe business leaders have the following priorities: increasing efficiency to reduce costs, improving innovation, and fostering higher customer satisfaction, agility, and quality:

The study does not discuss this point, but it is obvious IT failures drain resources from more productive activities, such as innovation and customer service. In addition, IT departments that deliver failed projects reduce their ability to create positive results in areas such as innovation and quality.

STRATEGIC ANALYSIS

We often forget the critical connection between IT efficiency and project success: money spent on failed and over-budget projects lowers ROI and wastes resources. Although it's easy to blame project managers, because they are responsible reporting the damage when problems arise, this study shows interdependence between IT and broader lines of business. Success goes far beyond project management alone.

The research primarily targets the perceptions of IT professionals toward the business; it would be revealing to see whether lines of business share the same priorities.

This study demonstrates that IT does understand fundamental drivers of project success and failure; however, the list of "productivity improvements" seems like a CIO's plea for inclusion in business decision making.

I asked Harvey Koeppel, Executive Director of the Center for CIO Leadership, for advice on helping IT become more relevant to the business:

CIOs should move beyond project plans, activities, and milestones to recognize the differentiating behaviors that distinguish between management and leadership. The most effective and successful CIOs work closely with business leaders, based on a shared understanding of strategic organizational goals. This shared understanding leads naturally to conversations about working collaboratively with business leaders to get the job done.

Understanding the business is the foundation for building relevance. CIOs have a real opportunity to acquire (or further enhance) the leadership skills needed to ensure that IT creates the best experience for both internal and external customers.

Advice to CIOs. Relevance is indeed a primary challenge facing CIOs today; your success depends on finding ways to encourage the business to prioritize the IT organization's work.

To improve relevance to the business, consider these suggestions:

  1. Develop the skills and business savvy to make your voice count at the most senior level in your organization. This will take time, but start today.
  2. Learn the intricacies of your organization's business operations. Start delegating pure technology decisions to IT staff experts, and encourage the organization to perceive you as a strategic business decision maker.
  3. Don't forget the basics -- build credibility by ensuring that your projects are successful.

The challenge of relevance ultimately rests on your ability to embody the characteristics of senior business management. Remember that business, and not IT, matters most.

Topic: CXO

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5 comments
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  • CIO relevance requires agility

    Michael,

    Great article and analysis. Business is all about change. Change is constant, pervasive and permanent. IT struggles to be relevant because they operate at a speed much too slow for Business. They clearly understand the Primary Business Priorities but are unable to contribute to them in a meaningful way.

    Take the first priority as an example: Improve Efficiency to Cut Internal Costs. The COO walks into the CIO's office and states they have identified a way to improve productivity by 5%. Even if the CIO is completely supportive the conversation will end poorly when timeframes, resources and budgets are discussed that it will take the CIO to update the legacy system.

    IT is riding a dinosaur in a horse race. The enterprise systems such as ERP, Best of Breed and Homegrown are simply not agile, easy to use and effectively impossible to keep pace with Business. We have recognized this since the '90s and have set about to cure the problem.

    You can't replace, modify or integrate these applications in a timeframe or risk profile that makes sense. Therefore they need to be frozen in their tracks. Let them continue to do what they are best at: consolidating financials, corporate compliance reporting and other "corporate" functions like HR and Procurement. Beyond that they are simply the wrong vehicle with which to keep pace.

    Once the CIO realizes his team has a boat anchor on its ankle then relevance will be possible. Your advice about how to build relevance is then spot on. Without realizing the legacy systems are the underlying problem even your advice will be useless.
    BabblewareInc
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  • A Brave New World

    In many ways, this is an affect of business school think that believes that companies should only value strategic functions and outsource everything else. The problems with that is that many strategic capabilities rely on the ability to have responsive, seamless operations that not only integrate well, but share the same end goal. This is difficult to achieve with external suppliers and vendors whose business have their own goals.

    CIOs need to know what abilities and functions are critical to enable or support the company?s strategic capabilities. This includes demonstrating which aspects, while they may be commodities are vital to strategic corporate execution. This also includes having a jaundiced eye to recognize those abilities and functions that are not. They need to develop the skills to communicate this effectively in the language that their business counterparts understand.
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