Several months ago I hosted a networking dinner for a group of twelve CIOs. In attendance were CIOs from many different industries and from a variety of different areas of the public sector. To jump-start our conversation, I asked the attendees to share with the group the most critical priority they faced in the coming year.
As we went around the table, some of the CIOs shared challenges with organisational changes, others with issues around moving to the cloud, and still others were working to refresh their IT strategy and governance processes. One CIO from the education sector, however, paused before answering, and then said, “We must improve our outcomes on qualifications testing scores for our students.”
This CIO had clearly articulated the priority that was critical for the mission of his entire organisation, not just for the ICT organisation.
A CIO who speaks the language of the business will be ideally positioned to not only translate the top-level requirements of the business to actionable IT, but also to make IT’s contribution to the business explicit against the value indicators the business uses for performance measurement.
The ability to raise our focus to the strategic issues facing our organisations is a common narrative in my discussions with CIOs across New Zealand and Australia. Not only do we, as ICT executives, need to enhance our skills in this area, it is also our responsibility to lead and coach the members of our teams to think and speak in the lingua franca — or common language — of our organisation. Gartner analysts remind us that we must link ICT activities to business or organisational outcomes, and we must use consistent business language to communicate the value that we bring.
Since the CIO is the ultimate business relationship manager for IT, a solid understanding in terms of demand, cost, control and delivery of the business and IT’s contribution is key when engaging on both a strategic and tactical level. A CIO who speaks the language of the business will be ideally positioned to not only translate the top-level requirements of the business to actionable IT, but also to make IT’s contribution to the business explicit against the value indicators the business uses for performance measurement. When the business is well-understood and served, the CIO stays in the loop with proactive business engagement, creating high visibility and high value.
CIOs who are perceived as providing high value deliver reliable, high-quality, cost-effective services, and they baseline, measure and report on IT in terms of business performance. Do not report to business executives on technical operations. Instead, report on how IT operations are affecting business performance.
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Butch Leonardson, a veteran credit union executive in the US, who is credited with helping to bring technology from the backroom to the boardroom, summed it up well when he said:
“A lot of CIOs think they’re customer focused, but they’re going inside out. Look at the CIO dashboard—what does it show to the board? It should be things like new sales, speed of closure, how long it takes to open and close a product. Lots of IT organisations have metrics that say we’ve got 99.99 availability, we’re fast and so on. The plumbing is wonderful, but nobody cares.”
Once CIOs prove that IT can deliver, they frame increased IT investment as an investment in improved business performance—not the result of higher business performance, but the driver. This way, they avoid the value traps.
That means IT performance must be expressed in terms of the ratio of business activity to IT operational costs, or IT performance must be translated directly into relevant business performance. For example, POS terminal or call centre agent availability is more meaningful to a business executive than network availability (a technical metric).
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CIOs can use the following three questions both within their teams and with their stakeholders to begin changing the ICT narrative to focus on business and organisational outcomes:
What is the potential revenue or cost impact of a given service, application or system?
How will the ICT organisation facilitate this business or organisational processes?
What is ICT’s capacity to support growth or mission outcomes for this initiative?
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Similar to the education CIO in the story above, who tied his mission critical outcome to the organisation’s need to improve student qualification scores, CIOs who use these questions within their teams will find themselves at the forefront of leading the change in how ICT communicates and shares information across the organisation and with their stakeholders.
Elizabeth E. Holden Ph.D. (firstname.lastname@example.org), is regional vice president of Gartner Executive Programs for Australia and New Zealand.
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