Archive for the ‘CIO Role’ Category

Technology is here to serve the business, not the other way around. Few would argue otherwise. So it only makes sense that when managing technology, we should focus on business objectives.

Of course, in Corporate reality, this all sound easier than it actually is. There’s definitely a disconnect between the “business” side and the “technology” side in many organization, not dissimilar to the disconnect between marketing and sales – a disconnect that happens because of lack of communication, and each side using a different vocabulary.

So the task is to bridge that gap. To have the technology people – the CIO and her team – sit with the business people – the CEO and the CFO, and talk. The conversation needs to take place in the same language though, and since the business outcome is what matters here, it is up to the technology people to learn how to speak the language of the business people – not the other way around.

The goal is to manage business and technology together, to achieve true alignment, and to bring technology to a place where it not only enables the execution of business strategy, but pushes the business forward, anticipating – even suggesting – possible business strategies and goals.

As I discussed before, getting into this mindset might be challenging for all parties involved including the CIO and her team, but it is very doable and is also very rewarding in terms of finally being where the interesting things happen, taking part in directing the company’s future.

In today’s super competitive business environment, technology is where more and more smart business leaders will turn to as a way to stay ahead of the competition. Any enterprise that attains true alignment between technology and business will be able to experience marked improvement in execution and profitability.

If economy experts are correct, and we’re facing a decade of great economic instability and constant changes, the only way to survive – and thrive – in this environment is to push forward and keep growing and innovating. There’s no better way to innovate than to allow technology to serve the business, making it an integral part of the business decision making process.

Ann All’s March article opened with the sentence, ”It’s tough being a CIO.” Reading it, my first reaction, which I promptly tweeted, was “Sure, these days, being a CIO ain’t easy. But these are also exciting times to be a CIO, because you get an opportunity to make a real impact on the business.”

Ms. All responded that indeed, new opportunities exist, although it may not be easy to capitalize on some of them. I absolutely agree with this statement. Which brings us to the question, how does a CIO make the most of her new and exciting role within the company?

“Innovate” is a word we hear a lot in this respect, and for good reasons. The opportunity to innovate is exactly why being a CIO in 2011 is so exciting. The company expects you to innovate, to push the business forward, to find and bring in disruptive technology that would make a real impact on the bottom line.

This is what is often referred to as the CIO being a “Chief Innovation Officer,” focused on delivering innovation at a low cost.

The challenge? You need an excellent understanding of the business strategy that you are serving, AND you must maintain and expand your technical savvy. Of course, you also need the budget for this new technology. The reward if you pull it off? Becoming a business leader in your organization.

There are many examples of CIOs who have figured this out – Digital Fuel is delighted to have many of them among our customers. They have shifted their teams’ priorities and built a deep understanding of the business goals. They have successfully changed their focus from maintaining tech infrastructure, to being completely aware of the bigger picture – the organization’s business goals.

As for staying up to date on technology trends, many CIOs tell us that they do it by relying on a variety of trusted resources, including techie team members, vendors and service providers, reading technology publications and blogs, and regularly attending technology conferences.

The third challenge, of finding the budget to innovate, can be conquered by optimizing existing IT costs and freeing more of the budget to go towards innovation. Needless to say, any new technology purchase should also be checked to make sure it would bring you the most bang for your buck. So, you won’t jump into the cloud, or decide on a major virtualization project, without making sure these projects will deliver actual value in the long run.

It’s tough being a CIO? Absolutely. But you have to admit, it’s also very exciting.

I enjoyed Mary Pratt’s recent ComputerWorld article on working with CFOs.

Her observation that “Most CFOs still see IT as a black box” and “have limited visibility into the value that IT creates for their organizations” rang true. It’s simply put, but is one of the reasons for the incredible growth of our IT Financial Management business. Our solutions are built to solve this exact problem, and as a side benefit it means we typically get CFO approvals very quickly.

Here are a few things we’ve learned while working with CFOs:

1. Expect skepticism. You don’t become a CFO by believing every ROI analysis that is presented to you. Every CFO has their story of being burnt by a major IT purchase that went very wrong. They’ve learned that it is their job to ask the difficult questions. Expect it and be ready to answer these questions with detailed information that shows your plan is based on facts and informed analysis. Which leads me to my next point…

2. Detail is good. Anyone with a financial background knows that you can hide big problems in summary statements. If you can’t produce detail, don’t expect to have your project approved. CFOs like access to details. They want to see that you know your stuff and have accounted for all costs. The most-used Digital Fuel feature is the dashboards that present summaries, but then let you immediately drill down to understand all underlying cost drivers. Just between us, many CFOs don’t personally look at every little detail, but having easy access to the information gives them confidence that the homework has been done.

3. Avoid technology jargon. While the CFO needs details about business value and ROI, she does not need to understand every feature and function of every product. “Increase number of transactions processed by leveraging the API” or “Capture all data into a central repository” doesn’t mean anything to a CFO. Take the language up a level and talk about “Sales agents can process twice as many orders per hour,” or “We get early visibility into changes in buying trends that allow us to take this action” instead.

By making a few simple changes to your pitches, and highlighting the business value that technology creates, you can get the CFO’s approval for more projects. If you can learn to communicate with the CFO in business terms with in-depth financial detail, you’ll be surprised at how easy it can be to get her approval.

I recently asked on LinkedIn: “What, in your opinion, is the single most important focus for today’s CIO?”

The responses I got were quite interesting. Here are just a few of them – there were many more.

Use IT To Increase Company Revenue

“The most important focus for today’s CIO is to find ways to use IT to increase company revenue. Cost cutting is fine, but if IT remains a cost center it will inevitable be outsourced entirely. Free market dynamics relentlessly push companies to focus on their core competencies – the value added things they do that their customers pay them for – and it pushes them to outsource support activities that are only cost centers.

Just about every product and service a company provides now has IT right down the middle of it. The successful CIO can find lots of ways to continually enhance existing products by wrapping them with a tailored blanket of information based value added services. And smart use of IT is also central to the design and roll out of new products. Business unit operations and products are so tightly intertwined with IT that there is hardly any meaningful distinction left between them.

CIOs have a whole host of new technologies to use in their quest to help increase revenue. Cloud computing, SaaS, social media and consumer IT can be combined with existing in-house systems to enable companies to add value to products, launch new products and connect with customers and suppliers in new ways. This is where CIOs needs to focus their attention.” (Michael Hugos)

Achieve Alignment with Business Strategy

“Above all, the single focus of the CIO needs to be alignment with the strategy of the business that they work for. Many CIOs have made the deadly error of assuming they had a better plan for their respective business and act independent of the other key functions, causing severe resentment and ultimately resulting in a bad conclusion.

On the other hand, over the past 3 decades, it has been evident the technology leaders must engage, not only as a partner; but as a vested owner with their peers. Understanding the power of IT, the CIO can bring case studies of uses in parallel circumstance, allying themselves with internal senior executives to gain consensus and support; while using metrics based logical presentation of facts – that create agreement. across the business. Only then, will the CIO be successful in bringing value and therefore succeeding in being considered part of the team.

Is the role of IT – growing revenue or cost cutting; the answer is yes; but only when aligned with the company’s direction – never attempting to force it.” (Steve Reiter)

It’s All About The Money

“What can the CIO do to make the company more profitable? Its all about the money – and that is very difficult for technically focused people to understand. Most seem to think that profits are more a worry for the sales director or the MD or even the finance director, but the reality is, everyone is responsible for the company profits.

Technical solutions can increase profits by saving staff time, or by reducing process times or even just by making the sales process more effective. However, the focus should always remain on creating provable, profitable results – gut feelings, following a trend or just renewing legacy solutions isn’t enough.” (Oli Rhys)

Develop Information Strategy

“The information required by the business is a product of business strategy. It is a top-table conversation. Most businesses do not develop an information strategy as part of their business strategy, and thus don’t have a systematic approach to determining what information the business needs. Given this the CIO can’t knowingly implement the right IT to deliver the required information – all they can do is guess and maybe follow some of the latest IT fashions – usually a waste of time & money.

So for me the job is at least 33% Information Strategy. Not IT, but much more simply “What information does the business need and how are we going to make it”, systematically determined as a part of developing the business strategy. Only when we actually know what information we want to manufacture and how can we really start to build the information manufacturing system with our IT.

And the most important questions in the information strategy are: What are we selling? Who to? How do we find them? Why will they buy it? When? Sounds simple, but the vast majority of CIOs and IT Directors don’t do it. If the CIO is not in the business of growing the business he might as well pack up and go home.” (Steve Burrows)

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If you had to pick the single most important focus for today’s CIO, what would it be?

As America slowly emerges from its second-worst recession ever, businesses are getting out of survival mode and are starting to actually make plans for the future. This provides the perfect opportunity for IT leaders to place IT right where it belongs – as a strategic partner to the business.

This is the time to finally turn IT from a bottomless cost center into an aligned business partner. But this will only happen for IT executives who realize that they must accept a completely new role within the company – the role of a sales person.

For most IT professionals, this is not an easy transition.

I was recently talking with an IT executive who clearly remembers the point when his job turned from being mostly about technology to being mostly “sales.” He now spends most of his time selling the benefits of technology internally. It’s a role this individual wasn’t ready for or expecting, and it took him a while to figure out how to do it. Fortunately he did figure it out and became a star “IT salesman” for his organization.

I see this happening everywhere. As IT starts to act less like a cost center and more like a well-run business, CIOs and their teams are forced to excel at business functions that were peripheral in the past. They must now engage in “internal sales” to facilitate the adoption of new technologies, in “internal marketing” to encourage organizational change and to demonstrate IT’s contribution to the business, and in “finance” to optimize IT spending.

IT is also adding new roles that didn’t even exist a few years ago, such as the new IT finance managers who were the first adopters of IT Financial Management Solutions .

It’s a difficult transition, because running IT like a business is new and unfamiliar territory, and because a real change in how IT operates can take years to accomplish. But despite the challenges and the difficulties, it’s important to realize that this is not a phase, nor is it a fad. Reconfiguring IT from a cost center to a well-managed, transparent business is a profound change in how IT is run, and it’s here to stay, because it makes business sense and improves business results for the entire organization.

My advice: Accept it. Better yet, embrace the role of a technology salesperson for your IT team. It is good for business outcomes and good for IT results.