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Bob Evans' recent column, "Welcome To The CIO Revolution: A New IT Manifesto," put forth a number of provocative ideas for how CIOs can transform their organizations. Left unquestioned was the need for every CIO to join the revolution and if so, the role that they should play. Unfortunately, pursuit of many of these objectives, without the proper organizational maturity, can distract from the underlying mission of delivering needed IT resources efficiently, reliably and cost-effectively. And quite frankly, not all CIOs will want to make the transition to these proposed future roles.
To put all of this into perspective, Forrester Research published a survey in 2007 highlighting how CEOs assess their CIOs. While I contend that CEOs, as a whole, define the role inconsistently, they share an expectation that their CIOs will have a positive impact on the business above and beyond keeping systems running properly. Unfortunately, just 28% viewed IT as being a proactive leader in terms of delivering innovation while only 30% said the same thing about process improvement. Needless to say, findings such as these should fuel the desire among CIOs to be more strategic in their impact within the business.
This is easier said than done as the same survey also found that just 60% of CEOs were satisfied with the overall performance of IT. In other words, for a large number of CIOs, significant work still needs to be done in terms of getting their IT house in order. Even the best CIOs will attest that meeting their organization's technology requirements is an ongoing balancing act, meaning that time to consider bigger-picture pursuits, such as fostering innovation, is often in short supply.
So, while Bob suggests the desire to be measured upon business outcomes, this can only occur when IT metrics -- costs, SLA performance, standardization, IT governance, project completion and so on -- are being consistently met as well. Without this, CIOs lack the foundation, the constituency, and the credibility to enact more strategic changes.
In terms of meeting these demands, CIOs need to ask themselves four key questions to determine their readiness to be a transformer:
- Is IT being run as a cost-center or a value center? Instead of simply measuring adherence to budget, CIOs also need to assess the value they deliver to determine their organization's effectiveness. At the same time, increased efficiency must be pursued relentlessly with processes, standardization, and tools such as zero-based budgeting used to force difficult decisions like turning off systems.
- Is the right functionality and insight being delivered consistently? Among the countless metrics that IT has to measure performance, the perception of end-users is too often overlooked. In reality, determining if IT is supporting and enabling their business needs is something that every CIO should consistently and systematically ask. This insight is fundamental to ensuring that projects, resources and investments are truly aligned with the needs of the organization.
- Is IT considered an inhibitor or an enabler of new business strategies? A handful of companies use the adaptability and visibility provided by IT to their competitive advantage. For most organizations, the opposite is true. How can you reach this pinnacle? Measure your IT organization in terms of the effort required to on-board a partner or customer, deliver a new report or update a process, and vow to reduce this effort by a significant amount over the coming year. The end goal should be to remove IT as much as possible from this equation so that end-users can fully provision their own requirements.
- Does IT follow defined processes or operate ad hoc? In today's highly regulated, just-in-time environment, no organization can succeed without clearly defined planning processes or well-established governance. This is particularly true for IT. Furthermore, this level of rigor is fundamental to sustainable process improvement.
The message here? Don't throw the baby out with the bathwater. While each of these examples evaluates IT, their implications for the health of the business are huge. As Bob suggests, CIOs should seek new ways to contribute to business strategy. However, this shouldn't be done at the expense of IT performance as this is too critical to ignore.
Ultimately, most CIOs recognize that IT can't stand pat for long. Expectations and demands grow daily as do costs. Continual improvement and ongoing vigilance is needed to stay ahead of the curve. Master this challenge and you are well on your way to being a great CIO.
With this in mind, let me propose three potential role models for the future CIO:
- The Operations Leader: With IT touching nearly every aspect of the enterprise, a strong and effective CIO is required to keep it operating efficiently and effectively. This scenario is the reality for many CIOs, where the CEO or CFO expects this to be their primary focus. This role is ideal for CIOs who are strong managers, are operationally focused and detailed-oriented, and seek to control career risk. And while this role may sound like a given, the 40% failure rate cited earlier indicates that exceptional leadership and strong execution are required to deliver outstanding performance 24x7.
- The Chief Process Officer: In an effort to have a bigger impact on their organization's performance, some CIOs are embracing a more process-centric perspective. In this context, they utilize both IT and domain knowledge to proactively determine how technology can be used to improve operational performance. This hybrid role—fully joining the executive team while still managing IT operations—is the goal for many. By accepting additional risk and responsibilities, they can increase compensation, influence and career satisfaction.
- The Chief Transformation Officer: Instead of settling for incremental improvements like the Chief Process Officer, the transformer seeks game-changing disruptions to the status quo. Reporting directly to the CEO, they use a strategic understanding of both technology and the organization to implement long-lasting, structural changes, such as outsourcing complete processes or divesting business divisions. Risks and rewards grow significantly with a clear path to the CEO role being one potential outcome. However, success is highly dependent on the performance of IT, over which they have increasingly limited control.
Which role is right for you? In addition to your personal goals and interests, a number of organizational factors—industry, business strategy and corporate objective—will influence this decision. What's important to recognize is that the model CIO isn't a one-size-fits-all equation. And the best way to control your own fate is to continue to deliver upon the IT metrics that CIOs have long been measured upon while creating and shaping the future metrics.
Robert L. Otto is executive VP, Advisory Services, at Agilex Technologies Inc., and was CIO and CTO of the U.S. Postal Service from 2001 through 2007.