Appeared first in the CloudSource blog on March 2nd, 2015
As the world increasingly becomes IT literate and as digital technologies percolate in everything we do, the role of the CIO and the responsibility for the IT department needs to change drastically or it will implode. You’re probably asking yourself why I would predict that, and what CIOs should do to have a bright future. Let me answer both questions.
What’s the problem with IT?
One trend begging to be addressed: a generation shift has taken place in the organization. A class of new employees, from the “born with a PC” era, have entered the workforce. I remember what a CIO told me about 5 years ago when we talked about this. My colleague shared an experience of visiting an office in Prague, where he found a young man, sitting at his desk chatting away on an instant messaging communicator. As his supervisor, he was annoyed to find the employee apparently slacking off and chatting with a friend.
Luckily, instead of expressing his annoyance, my colleague simply asked what the young man was doing. It turned out the he was working with one of his friends in the IT development department in Krakow, testing a new application. Being in the business, he was helping him tune the user interface for easier use by the business users. The chat was the easiest way they had found to share their experience and provide quality feedback.
Now, five years ago, “chat” (IM, etc.) was something people were doing with their friends in their free time, it was not at all considered a business tool and was actually not allowed in many companies.
This little story is just an illustration of the way the new generation joining the workforce brings. They feel that, to be more productive and get their job done, they need to collaborate with each other. And many require to do that beyond geographical boundaries and time zones. So, they are looking at ways to collaborate, exchange information, comments, work on common information etc. Many IT departments do not provide intuitive and easy to use tools to achieve that, while, in their private life, they use Facebook, DropBox, Box, SkyDrive, Google Spaces, you name it, for such tasks. The results? The start using the same tools in the office, potentially breaching security and compliance protocols.
Houston, we have a problem. To be relevant in the long run, IT needs to be at the service of the business and seen as delivering value on a day to day basis. As the business requires faster reactions to customer demand and market changes, IT then need to become more agile and responsive. But that can only happen if IT understands the business well.
How will the new breed of CIOs spend their time?
In an interesting article titled “CIOs to spend 40% of their time to run IT”, Gartner claims ´Instead of managing IT, CIOs told Gartner they will spend around a quarter of their time working with other C-suite executives, and 18 per cent of their time with business unit leaders.´ So, rather than an inward facing CIO, we will increasingly be finding at outward facing CIOs, that work with their colleagues and business unit leaders to address the needs of the business. In that process, IT will be better integrated with the business. In an ever more digital world, that is actually the way things should go. The question, however, is what the CIO needs to do to transform his organization and convince his business partners that IT is truly becoming a part of the business. This transformation begins with the CIO himself. In my mind, he needs to do three things:
1. Understand the business
As demonstrated in the opening example, the first thing to do is to gain a good understanding of how the business works. This includes taking a hard look at the industry, trying understand what is important, and what truly differentiates your enterprise from competitors. I often discuss with CIOs and IT professionals and ask them a simple question: “What makes your company what it is?” Most people don’t have an answer. Understanding this is critical. It brings us back to the Core vs. Context discussion from Geoffrey Moore. You would want to digitally enable and support the critical processes first, wouldn’t you? Give them your unsurpassed attention as they enable business revenue and growth.
Go in the ranks to understand the reality of the business and how processes, workflow, etc. actually work. Don’t hesitate to ask them how they perceive IT, whether IT is delivering them what they need, and how easy it is for them to do their job using the provided IT infrastructure and functionality. You’ll get a lot of feedback. But it will tell you in no uncertain terms how your organization is perceived, how it is working and where it can improve.
2. Link business and IT
In most companies there are many people that understand the business and the market very well. In the IT department, people have an in-depth understanding of technology. But what is missing throughout the organization is people that can articulate clearly how technology can best support the business. Years ago we called that BITA, or business to IT alignment.
CxOs have an excellent understanding of the business, as they should… they run it. But often they lack the technology basis to identify where tech can help them run the business better, offer new products or services or interact better with clients and suppliers. They need somebody to do the translation for them. And that is where the CIO can play an important role.
Identifying where a new technology helps the business is one thing, convincing the technology teams on how and why the can support the business is another. I have known many people that love technology for the sake of technology. Business, markets and customers are often foreign to them. Here is where the evolution in thinking from a technology focus to a service focus comes in. And that is where management of change may be required. This can be done either by the CIO himself or by somebody working closely with him. Not only will this allow you to change the mentality of the IT department and make it more responsive to the business, but it is also a great way to prepare your team to use more cloud based services.
3. Start in one area
While your team is going through the management of change, you cannot address all business areas at once. You will need to focus. After a first review of the state of the business you may want to choose one area and one CxO as your initial partner. Often the CMO is presented as just that person. This is what Cliff Condon from Forrester also highlights in his blog entry “How the CMO and CIO will determine the future of business in 2015”. McKinsey sees them as working as partners.
Understanding the market and customers better by analyzing what is being said about your brand on social media will help you determine how to retain and grow business in a market that is quickly changing. Thus starting with marketing may be a good way to demonstrate added value. Many marketing activities also focus on big data, an important area for IT to move forward in. However, because many CMOs did not wait for the CIO to approach them, they started building up their own IT environment. So, the CIO will have to convince them that working together will help both being more successful. There is a new reality between the CMO and the CIO. Keep that in mind and look for joint benefits.
Are all CIOs equal?
CIOs that have worked in business roles have an advantage here. I’ve known CIOs that used to run Supply Chain for example, and they quickly grasp the business needs. They use their contacts to build the credibility and establish the “win-win” relationships. Their challenge is they may not have the credibility within their own departments so need to enthuse their teams for the new attitude and way of working.
CIOs growing from the ranks on the other hand have a good grasp of technology and of how the IT department operates. They may have more of a visibility and credibility issue with the business people. So, they will have to go the extra mile to learn and understand the business. They should be curious, not hesitating to ask questions, to try to understand why things are done in a particular way. Remember one things, people often love to talk about their job, their achievements and their business. Use that. The one element they will have to pay attention to is not to feel there is no need to change as it has worked up till now. They need to feel a sense of urgency as the world around them is changing very fast. The pace of change is picking up, their users are changing and becoming very much IT literate, and the enterprise is increasingly becoming digital. If they do not carve their role in the organization, the organization may soon work without them.