By Peter Wilson
On average, Australian CIOs aren’t nearly as strategic as they would like to be or could be. Having spent countless hours advising CIOs across the country, I regret to report that the IT function at too many of our enterprises adds little strategic value and has been reduced in large part to a keeps-the-lights-on, back-office role.
This is an alarming finding. When IT is relegated to mundane tasks – like report generation, legacy application maintenance, keeping the corporate web site up and making sure that office PCs stay virus-free –, there is an enormous opportunity cost to the organisation and to the country. Don’t get me wrong – these functions are necessary to keep enterprise IT going. But CIOs can do so much more. They can be brilliant visionaries for the company, steering it through gale-force business changes. To grow a strategic IT department, however, they need support.
In the modern era, more than ever, IT innovation represents opportunity and threat simultaneously. If your competitor uses IT better than you, it can put you out of business. If, on the other hand, your organisation taps into the strategic power of enterprise IT to build competitive advantage, then IT can be the hero that singlehandedly delivers on many important business goals.
Which category does your IT organisation fall into – tactically-oriented resources or valued strategic partner to the CEO and other business executive leaders? For CIOs, answering these simple questions should allow you to self-diagnose the nature of your contribution:
- Are you involved in executive new business planning sessions? If the CIO isn’t given a seat at the table with other C-level executives at business strategy sessions, odds are that IT is not viewed as a strategic contributor to business growth.
- Is the annual IT plan driven by the organisation’s articulated business strategies? If IT priorities and work plans are not directly correlated to strategic business objectives, it’s a signal that IT has become little more than a support function.
- Has IT ever created a revenue-generating product? In organisations where business and technology goals are closely aligned, it’s common for IT to build customer-facing applications that serve as revenue-generating profit centres and lead cost-cutting supply chain improvements. If doing that isn’t on your radar, chances are you’ve given up on being a strategic partner to your corporate executives.
- Are business units bypassing IT to get things done? Right or wrong, business unit personnel often believe that “if we give this to IT, it will never get done.” If business unit leaders don’t tap into your advice and talents, and choose instead to work around you, this is a clear indicator that your IT organisation is no longer strategic. For example, are you leading the push towards business-as-a-service models that the marketing department can consume through new channels?
- How often do you talk to customers and your business unit heads? By my estimates, a CIO should spend at least 30 per cent of his or her time meeting with business units and with customers. If all of your time is spent internally within the firewall of the IT department, you are deprived of the inputs that can enable strategic IT innovation and you will not have the relationship capital that is necessary to do great things in IT management.
The trap of becoming an operational resource is an easy one to fall into. I have seen CIOs who have all the makings of greatness fail to achieve their strategic potential as they are not able to navigate the relentless day-to-day grind of operational issues and come up for air.
Few excuses are legitimate, including, “The business units want too much from us – we can’t possibly deliver that quickly.” Or, “We don’t have the budget to deliver innovative IT applications.” These are merely rationalisations of a defeated CIO who has lost the energy to turn things around.
In my work with CIOs, I find it’s relatively easy to turn things around provided the CIO has the will. In working with CIOs, Datacom will first assess IT capabilities and ensure that basic IT management discipline and infrastructure are in place. We will ask questions such as:
- Is there a business case template for IT initiatives that includes a business analysis of each IT investment, defining how it supports organisational goals, life-cycle costs, benefits, risks and expected ROI?
- Are the right skills available from internal staff and external partners?
- Are there metrics that track IT’s contribution to business results?
- Is there a system for prioritising IT projects using a defined set of objective, weighted criteria, or does the loudest voice dominate the landscape?
Having identified some areas for improvement and having shored up critical weakness, we then work with CIOs to define a desired future state for enterprise IT management. What will a more strategic IT organisation look like? This exercise involves meetings with the CIO, business unit heads, the CEO and even customers. The key output is a tactical roadmap that explains in detail how to deliver on IT’s strategic promise.
Finally, we look for quick wins. Early strategic wins must solve an acute business problem or immediately lead to increased sales. For CIOs, having priorities out of order can be fatal. A failure to be strategic endangers not only their organisations but also their personal career prospects, as Australian CIOs need to undertake an extreme makeover of their IT departments now…before it is too late.
Peter Wilson is Datacom’s Managing Director of Systems for Australia and Asia. He helps ensure Datacom offers and fulfils technology solutions globally.
Peter strives to drive the success of the business across locations by strategically directing Datacom’s future. His vision ensures every Datacom location is equipped with the world-class knowledge and capabilities necessary to help enterprises transform their IT department.