McKinsey research: IT needs a kick in the keister

A new study shows increasing dissatisfaction with IT and the CIO. Here's the problem and some solutions.
Written by Michael Krigsman, Contributor

A new study from strategy consulting firm, McKinsey, shows “growing dissatisfaction” with IT performance, from both business users and within the ranks of IT itself. The study notes that almost one-third of IT respondents believe replacing their own leadership should be a top priority to improve IT performance.

This data signals a growing crisis, in which the CIO and IT are evolving but have not yet found their rightful place during a time in which expectations of IT are changing rapidly. Among the CIO’s greatest challenges is leading IT from its established role as infrastructure provider to help drive organization-wide business transformation efforts.

Also read: Cutting IT costs is so 2011

For many organizations, making this change requires IT to develop business skills and strategy experience that it may not currently possess. Simultaneously, it will take time for many companies to accept a new role for IT, which layers innovation and strategy onto its historical position as the provider of corporate technology infrastructure. The McKinsey survey offers evidence that we are in this challenging transitional period.

Perceived decline in IT performance. The following chart shows that respondents from IT view themselves primarily as managers of corporate infrastructure. Areas such as innovation and adding business value are much lower on the list. Importantly, IT's perception of its own performance declined over the last year:

McKinsey - IT as infrastructure provider

 IT executives: "replace our management." The report presents a striking indictment against confidence in the CIO: 

enthusiasm to replace management highlights the concerns of some IT organizations that their leaders cannot manage change in rapidly evolving circumstances. Just 55 percent of all executives say their CIOs have a significant impact on their organizations’ business issues

Wow! One could hardly imagine a clearer statement that CIOs are not properly managing the infrastructure-to-digital transition for IT. As this table shows, IT executives view their own leadership even more harshly than do non-IT execs:

McKinsey - replacing IT management is a priority

This last chart suggests two important points. First, both business and IT executives recognize that business leaders must have greater accountability for the outcomes of IT projects. Second, both groups see the need to reallocate IT spending and ensure it aligns with business needs.

These points reflect the reality that IT is not separate from the business, even though many companies act as if IT projects are somehow different from company activities in non-technology areas.

Thoughts for the CIOs among us

For CIOs and IT, the message is clear and definite: being an infrastructure provider is not sufficient to meet expectations of today's business leaders and IT executives.

As I wrote previously, research from CIO Magazine's State of the CIO 2014 survey confirms this view:

Cost-center CIOs must finish a major enterprise project, simplify IT and cut technology spending by a set percentage. Game-changers are being asked to lead product innovation efforts and enable global expansion.

There is a polarization to what's happening

For years, we have spoken about IT and the CIO adding business value. This vague terminology is virtually useless without a concrete discussion that explains specifically how IT will engage with business leaders to understand and solve their specific problems.

Fellow ZDNet author, Dion Hinchcliffe, summarizes the adaptation that CIOs must undertake:

The CIO should... translate the current business into today's emerging digital marketplaces and channels. And yes, that means knowing more about how to apply digital to the various parts of the enterprise than line of business executives. Relentless education and experimentation is required here to be successful. The CIO should be the visionary and evangelist that can get the business -- from the management team to the workforce -- fully on board with digital business.

The best CIOs understand that engagement — talking, listening, learning, and doing —are the hallmark activities for CIO greatness and achievement.

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