Can you speak business?
- 19 June, 2008 22:45
To obtain their colleagues' buy-in for strategic IT investments, CIOs face the major challenge of efficiently communicating their business cases to fellow C-suite members including the CEO and CFO."'
Mutual understanding among C-suite members is crucial, according to Woon Tai Hai, CIO of audit firm KPMG Malaysia. "The approach that works best when I relate to other C-suite members is to understand business implications in a technology-related conversation," he says.
Woon says that as a CIO, he needs to make a business case to technical people and a technical case to business people. "When I have a discourse with fellow C-suite colleagues, I need to explain technical proposals in a business sense and most important of all, the resulting benefits."
He adds that the appropriate technical jargon or acronyms, mentioned at the right moment, can create "an impression of deep understanding" of the subject matter. However, he also notes that too much 'tech speak' may "kill" the enthusiasm of other C-suite members. "If I only talk about technology without making any reference to business benefits, then I may seem to be babbling or seen to be introducing technology for technology's sake."
According to Woon, the CIO's role has evolved over the years. "Before the 1990s, a CIO's role would primarily be to convince the CEO or CFO of the need for technology," he says. "Today, CIOs need strong business acumen to propose credible technical solutions that can enhance organizational goals."
Presenting a business case to other C-suite members involves taking into account opportunity costs and benefits of adopting any IT solution or strategy, he adds.
Woon says that, according to a recent Centre for CIO Leadership study, only 15 per cent of respondents who considered collaboration between IT and lines of business a priority, actually feel they are very effective in doing so.
The Centre for CIO Leadership is an open, collaborative network of executives and institutions from around the world with a common goal of advancing the CIO profession.
Woon finds it interesting that the Fairfax Business Media's State of the Asian CIO survey 2007 shows that 37 per cent of senior IT executive respondents report directly to the CEO.
"This is a possible indication of CIOs being involved in business strategies more directly rather than as a third party," he says. "The finding may also be attributed to the fact that CIOs are now working for a new generation of CEOs who went through the dotcom bubble, and who appreciate the value technology can bring to the organization."
"I believe the CEO and CFO play a significant role in strategic decision-making," Woon says. "In the area of technology, I expect them to make strategic decisions in partnership with me after mutual consultation."
Woon says that during C-suite discussions, it is important for CEOs to be seen as respectable leaders, and to convey "a clear message of interest" in what other C-suite members say and do. "Nothing puts off people more than being ignored or working for someone who doesn't see you as an integral part of the team."
With the current pervasiveness of e-mail and messaging services, C-suite members tend to rely "too much" on technology and take for granted face-to-face meetings, he adds. "If we do not carefully guard against this pitfall, relationships among C-suite members may weaken."
Another pitfall is for C-suite members to direct the company without knowing the organization's level of IT sophistication and staff competence, Woon says. To address this issue, he constantly updates fellow C-suite members on latest IT developments within the organization.
"Although it would be unrealistic to expect other C-suite members to understand the finer details of IT configurations and networks, I choose to keep them informed of crucial IT elements that govern or add value to the business," he says. "Without some understanding, they are unable to appreciate the value of IT."
Woon points to the example of FedEx, where management considered the benefits of transforming their business model based on IT. "Today, the company has not only expanded their logistics business, but created several new ones as well."
During conversations with C-suite executives from various organizations, Woon often notes, with surprise, that many CEOs today still find returns on IT investments difficult to quantify.
"They have come to a stage where no matter how much is spent on IT, there seems to be endless requests for more upgrades, more functionality, more performance -- in short, more money for investment," he says. "So, instead of seeing the business potential of IT, they see IT as a cost center."
Woon believes that the situation is "partially" due to the inability of non-technical C-suite members to see the role of IT in delivering business value.
"Some responsibility should fall on the CIO, as his failure to clearly present the business case for IT initiatives to other C-suite members may be the chief reason for the persistence of such a mindset," he says.
Woon advises CIOs who typically seek buy-in from the CEO or CFO from a 'need-for-IT' standpoint, to change their approach by showing how IT can create business advantage.
Improving C-suite interactions
"C-suite interactions should be open, direct and seek to enhance business value," Woon says. He notes that such interactions sometimes focus too much on concepts, without adequate translation of ideas into workable solutions.
Woon adds that he is a "strong believer" in team leadership, and that C-suite conversations should reflect the status of all involved as organizational stakeholders. "Successful C-suite interactions will ultimately strengthen organizational leadership."