Over the past few years CIOs have frequently been confronted by predictions of their own demise. Headlines like, “IBM to CMOs and CIOs: Work Together or Become Irrelevant” have become common.
Like a lot of reporting on business trends, there is some truth and a lot of hype. The role of CIOs and the IT function is undoubtedly changing and, yes, managers in the line and functions outside of IT – especially marketing – now make more technology decisions. But this doesn’t signal the end of the CIO role because greater business partner involvement will often result in wasted spending, excessive complexity, and the taking on of ill-considered risk.
Three Ways to Boost Business Leaders’ Tech Savvy
So the ability to exploit technology and information effectively is fast becoming a prerequisite for leadership positions, in the same way as the ability to manage talent or a budget are considered to be essential business leadership skills. The role of a firm’s IT functions, therefore, hasn’t changed. They must still help the company get as much value as possible from technology but business partners’ greater role in technology decisions is redefining the best way for IT to go about their job.
CEB CIO research shows that IT should help business leaders take three steps to reap the benefits of their technology investments.
Promote business capabilities as a corporate lingua franca: Many business leaders are guilty of the same errors that are often levelled at IT teams – focusing on the new and cool features of technology solutions, not on how the technology supports business goals. In contrast, organizations that are most successful at digitization frame their technology discussions in terms of business capabilities, not technologies.
Business capabilities provide a structured way to express the activities the business performs to reach its strategic goals. This helps business leaders (and IT) communicate in a mutually meaningful language that is not technology-centric. The language of business capabilities enables them to create investment plans shielded from the volatility of digital technologies, and align these plans with the activities that matter most to business strategy.
Take ownership of information: One of the CIOs we recently spoke with suggested that the state of corporate data assets should be reported during company earning calls, just like other corporate assets. The hardest part of managing data quality and accessibility is not designing standards and usage rules, but rather ensuring the organization’s commitment to ongoing information governance.
Business leaders should be responsible for the usability of the data collected and stored in the technology or service they buy, while IT provides the necessary integration capabilities, but ultimately, information management has to be a combined responsibility for the business and IT.
Improve technology vendor management capabilities: Technology vendors like selling to business leaders. CEB data shows that vendors can double contract value when they circumvent IT, and they are able to close the sale in less than half the time when they sell directly to business leaders. In response, business leaders should look to corporate IT for guidance and support with vendor negotiations.
One way of nudging them in this direction is by measuring their (not IT’s) effectiveness at vendor management and negotiations. The difference between the value of contracts renewed directly by business leaders and the contract renewal value when negotiated through IT could be one such measure.