The role of IT in strengthening the enterprise

IT in the modern enterprise has evolved from a back-office component to a core operational constituent that can improve business performance and increase shareholder value. CIOs now have an opportunity to demonstrate a truly executive level leadership role in defining their enterprises.

By implementing an agile development approach, for example, IT can improve time to market for products, thereby realizing business value earlier than traditional approaches. IT also plays a central role in data management and the delivery of advanced analytics, both of which enhance competitive advantage and profitability. IT can also improve customer service excellence by implementing solutions that improve the ease of doing business. And centralizing functions such as infrastructure or procurement to optimize economies of scale not only enables more effective expense management, but frees up senior management to focus on surpassing the competition.

Today, IT is as important a discipline to the enterprise as finance, marketing and sales. In fact, IT is central to an organization’s success by providing critical day-to-day operational support and enabling enterprisewide business change.

The role of the CIO, however, has not evolved to the same level in the organization. This was noted recently in The Wall Street Journal by Peter S. DeLisi, Dennis Moberg and Ronald Danielson in their article titled “Why CIOs Are Last Among Equals.” The article discusses CIO shortcomings and how they can be overcome.

To truly gain peer status in the C-suite and maximize IT value, CIOs need to establish themselves as legitimate business executives. CIOs must focus on three areas to accomplish this:

1. Demonstrate executive-level leadership by taking a business-first approach to managing the technology function.

2. Balance strategic thinking and long-term planning with sound operational execution.

3. Run IT as a business within a business, taking a service-oriented approach that empowers business associates to drive their own IT agenda.

Executive-level leadership
Just as a firm’s CFO uses financial expertise to drive enterprise strategy, the CIO can leverage technical expertise. A CIO who leads from a business perspective gains credibility from C-suite peers and from the CEO. A CIO who leads from a technology perspective is relegated to the secondary role of the “T guy.”

How? The CIO must understand the business — and demonstrate the ability to make difficult business decisions — as well as anyone else in the organization. This means the CIO must know the company’s products and services, profit drivers, competition and organizational dynamics. The CIO needs to develop a technology vision based on the company’s business vision. Applying clear metrics to the vision makes it real and provides direction to the IT organization.

Strategy and execution
An IT strategy is not the same as data center consolidation or some other technology-based plan. An IT strategy is about enabling top-line revenue generation, margin improvement and customer service excellence. Data center consolidation can be a component of the strategy but not the driver.

A strategy grounded in a business-oriented vision provides direction and motivation to the entire IT organization. Strategy is not enough, however. A strategy is only as good as the execution capability of the organization and the key to execution is facing reality.

Confronting the facts of an organization’s current situation distinguishes great executives from merely good ones. While strategy provides focus and simplicity, sound execution requires the ability and wherewithal to address the hard facts about an organization’s existing conditions.

An accurate assessment of circumstances, such as the organization’s capacity to execute on projects, serves as a frame of reference for all decisions. Great executives consistently make successful decisions based on an honest assessment of the status quo.

Leadership is as much about posing questions as seeking answers. It’s about encouraging dialogue and debate, building mechanisms to raise red flags early, and learning from mistakes. Such abilities require discipline, attention to detail, and a structure for addressing issues and managing risk.

A governance framework that includes substantive reviews for assessing project delivery risk focuses on signs that warn of trouble. For example, dependencies — especially nested ones from more than one degree of separation — can ruin a project. A project can be running completely on schedule, but if not tracked well, outside dependencies can derail it significantly.

Detailed senior-level reviews lay the foundation for IT risk management. In our environment, we have implemented a rigorous review process that focuses on risk, dependencies and milestone deliverables to raise critical issues early while there is still time to take action. Threats to a project need to be understood, vetted and mitigated. Details and realistic assessment matter in execution.
IT as a business
Finally, the CIO’s level of influence in the C-suite can be elevated by transforming the culture of IT. Rather than focusing on what IT does, an organization should focus on the products and services it “sells” to its business associates. It must develop service-level options for its customers to choose how they use technology. Consider, for example, a storage team that has laid out various options for performance, recovery objectives, resiliency and cost.

Managing IT as a business provides several benefits: It creates an entrepreneurial environment for the IT staff, creating more business awareness for tomorrow’s leaders; it enables benchmarking of costs; and it positions the CIO as a true operational leader. Success establishes the CIO as a proven executive who can extend leadership across other areas, such as administration, operations and management of business services.

IT is integral to corporate operations and strategy in our interconnected world. For the modern organization, the IT component can mean the difference between greatness and mediocrity. An IT organization at the forefront of the company’s strategy contributes to a high-performing business by enabling top-line revenue growth, superior margin growth and excellent customer service.

Today’s CIO is in a unique position to assume a leadership role at the executive level, but that individual needs to overcome both perceived and real weaknesses. A CIO who takes a business-first approach, drives strategy, manages flawless execution, and runs IT as a business will be recognized as an executive leader in the enterprise.

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Jim Love, Chief Content Officer, IT World Canada

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