CIOs agree that aligning IT activities with the business strategy is essential to success but only 5 percent believe that they have exceeded expectations on that score, according to 1,217 CIOs surveyed by Deloitte. You can blame the antiquated expectations of the CIO role for this one.
Business leaders are laser-focused on serving customers and fostering innovation, but rather than bringing IT along for this journey, they expect CIOs to only maintain and secure IT systems, create efficiencies and make business processes run smoother.
Deloitte says that while 57 percent of CIOs indicate customers are the top priority for their business, only 45 percent say that their unit is involved in delivering customer experience through IT. Many CEOs still expect CIOs to keep the lights on, tend to back-office systems and build a moat around corporate data.
A cruel irony for CIOs
Most CIOs lack experience driving organizational change and business transformation, which makes it harder to gain credibility with business stakeholders, says Khalid Kark, director of research for Deloitte’s CIO program, who conducted his research by interviewing CIOs from May to September. And if IT executives can’t gain credibility with the C-suite, they remain stuck on the order-taking hamster wheel.
Being trapped in a functional role is a cruel irony considering that Kark says that CIOs’ broad view of their enterprises – IT leaders put their stamp on every business line in the course of serving technology -- makes them well-suited to drive organizational change. "CIOs are best-positioned to understand, articulate, manage and drive that whole shift and they're having a hard time because they haven't done this before."
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Kark offers the following cruel conundrum for consideration: CIOs must often refresh legacy back-end technologies to support new digital capabilities, such as a new mobile apps or website. But they often struggle to justify to the C-suite that they need more money to implement the infrastructure required to achieve desired outcomes. This can grind critical transformational work to a halt.
Establishing credibility with the business is essential and doable. Kark says that one CIO who was hired by a large enterprise spent 18 months overhauling the company’s messy operations just to establish credibility with business stakeholders, setting the table for his digital innovation work.
How one CIO got buy-in
For an example of how a CIO might influence the C-suite, witness Subway CIO Carman Wenkoff, who successfully laid the foundation for the sandwich chain’s digital transformation, which includes a revamped mobile app and loyalty program.
Wenkoff gained support for a new digital business unit by reframing technology services for his business peers and presenting business case for the various digital initiatives Subway should pursue. In a presentation to the C-suite, he included context such as how consumer preferences had shifted to mobile and web, as well as what capabilities competitors had introduced. He outline what investments were needed and what impact Subway could expect to see at the top and bottom line of the business.
Rather than lulling the C-suite to sleep with technospeak, he described the business outcomes they could expect, such as increased traffic to stores and higher guest ticket averages. In short, it's all about increasing customer loyalty to a chain that has struggled to ensure loyalty.
“That’s made the difference and is really what unified people to say ‘we need this” and it’s a critical strategy to the business now," Wenkoff tells CIO.com. "They’re realizing how important tech is for them and what an enabler it is."
Wenkoff is on the right path, receiving permission to hire 150 technology, marketing and operations personnel with which to drive the digital unit.
The Deloitte survey uncovered additional disconnects that suggest IT and the business aren’t always on the same page:
- Forty-seven percent of CIOs cite that fostering innovation and disruption is essential to their success; however, 43 percent said such capabilities do not exist or are still in the process of being built.
- Although 61 percent of respondents identify cybersecurity as a core expectation, only 10 percent of CIOs report cybersecurity and IT risk management are a top business priority.
- Sixty-seven percent of CIOs say that the business leaders expect them to reduce IT costs and drive efficiency, but 66 percent state they are also expected to maintain the same or better availability and performance of IT systems.
Kark offers CIOs struggling to align with his or her business stakeholders the following advice: Understand business needs, build credibility and be adaptable to change.