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CIO goal: From cost centre to business game changer

CIO goal: From cost centre to business game changer

CIOs at a technology and cultural crossroads, according to a CIO/IDG Research study. Keeping the lights on demands are pulling them from more strategic roles, and too few of their business counterparts view them as strategy leaders or peers.

CIOs and other IT executives have made significant progress in their long-standing efforts to tightly align and coordinate their departments with other business units.

But they still have to overcome a raft of challenges before IT will be viewed as a contributor to business strategy, according to a CIO/IDG Research study sponsored by Red Hat.

When asked to describe how their companies’ business stakeholders viewed the IT organisation, only 10 per cent of respondents said they were seen as “business peers” engaged in developing, not just enabling, business strategy. The survey interviewed 100 respondents with titles of IT director and above, in the United States.

Related:State of the New Zealand CIO 2014: Treading new ground

Even fewer of the business stakeholders (4 per cent) were thought to view IT as a “business game changer” or the primary driver of the enterprise’s competitive future.

The respondents said nearly 30 per cent of business stakeholders still consider the IT department to be merely a “cost centre”.

The survey finds many CIOs and other IT executives spend much of their time “keeping the lights on”. Forty eight per cent of respondents selected “improving IT operations/system performance” and 47 per cent of respondents selected “implementing new systems and architectures” as one of their top five areas of focus.

IT is a source of key business innovation, and it is the responsibility of IT executives to communicate the strategic value of that innovation.

Lee Congdon, Red Hat

Moreover, the survey showed new IT projects are more frequently initiated by business champions approaching IT (77 per cent) than by IT approaching business (68 per cent). The survey finds IT and business representatives jointly identify new projects and opportunities for innovation only 16 per cent of the time.

“IT is a source of key business innovation, and it is the responsibility of IT executives to communicate the strategic value of that innovation,” says Lee Congdon, CIO of Red Hat. “The survey results clearly show the need for IT executives to have a broad understanding of their organisation, and to increase the collaboration between IT and business leaders. It is through this collaborative innovation that not only perceptions will change, but also business results will be driven.”

IT plays a critical role in virtually every organisation today, so it is important for CIOs to break free from set behaviours and relationships as they work to establish IT as a full business partner, says Max McLaren, regional vice president and general manager Red Hat.. “CIOs can overcome these obstacles by playing the role of business game changers."

Cost centre to business game changer

The respondents said they want to spend more time contributing to business strategy in the next three to five years.

These are in identifying opportunities for competitive differentiation (48 per cent), cultivating the IT/ business partnership (42 per cent); driving business innovation (41 per cent); aligning IT initiatives with business goals (35 per cent); and developing and refining business strategy (32 per cent).

Even given the opportunity to innovate, many felt stymied by factors outside of their control, the survey notes. For instance, when asked if they had the budget to support and enable new business ideas, 57 per cent said their available budget was only “fair” or “poor".

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