by Lucy Greenlees, Ernst & Young

Changing your remit from a utility to a transformer

Sep 21, 20113 mins
IT Strategy

While the economic recovery hangs in the balance, CIOs have an opportunity and a responsibility to review the role of IT and ensure it is well positioned to help the business achieve its evolving priorities and objectives.

A survey of business leaders and CIOs by Ernst & Youngconfirmed that:

– only 21 per cent of respondents expect their strategic focus to remain on cost control once the economy recovers – 34 per cent intend to pursue growth opportunistically – 40 per cent intend to take an aggressive growth oriented stance

The same survey revealed that:

– 40 per cent see IT as a protector or utility – 28 per cent see IT as a performer, delivering tangible value to the business – 29 per cent see IT as a transformer, a key contributor to delivering business change

For those who need to move into a transformer position, there is an opportunity to develop a plan to support business growth aspirations.

For those already in a Transformer position, there is an opportunity identify areas for improvement in the light of changing priorities.

In the event an organisation believes that IT should maintain its utility position, CIOs should ensure the implications of that decision are understood by business and IT, and actions are consistent.

Source: Ernst & Young

The action plan Take a structured approach to assessing where you are now.

– Include key business stakeholders of IT as views can differ significantly, and business buy-in is essential – Understand the reasons behind views, as they may be based on individual recent events rather than a consistent view developed over time. For example, a view based on a single project which is viewed as successful can be as risky as a view based on a single less successful project, and can prompt inappropriate actions or investment

Identify where you need to be to meet business expectations.

– Articulate clearly and tangibly how the evolving state will be defined and measured in terms of activities and related KPIs – Agree a timeframe with business stakeholders to get there

Define key IT areas you can use to measure progress. Typical indicators of a more mature IT organisation are collaboration, consistency, flexibility and repeatability. Two examples of this maturity evolution in specific IT activities are:

– Budget management – it is of little point trying to deliver and measure value if the costs are not under control, and seen as being under control. Cost drivers may vary but clarity and transparency are key. IT as a Utility is typically constantly trying to manage costs down and spends budget on keeping things running. IT as a Transformer has typically achieved sufficient credibility to manage budgets for agility or business growth, identifying cost savings to reallocate those savings elsewhere, and is able to be innovative in seeking funding options – Projects and programmes — IT as a utility often struggles to deliver individual projects even to time and budget. IT as a transformer engages with senior business stakeholders to define and agree project prioritisation, monitor the project portfolio, and to sponsor and deliver successful programmes consistently, taking learning points forward.

Other key activities to review would be strategic planning, service management, sourcing, and innovation.

– Set a timeframe and plan to measure progress and make necessary course corrections because of business or IT changes – Recognise that progress to becoming a Transformer is a journey where activities progress at different paces

Pic: Sham Hardycc2.0