I’ve often found that there is a significant disconnect between the value that IT delivers to the business and its influence on the organisation’s broader strategy.
Ask a CIO what words they associate with technology and you are likely to hear things like innovation, value, and responsiveness.
But ask the Board about IT and chances are that you’ll hear cost, risk and operations.
Please mind the gap
IT should have a massive influence on the direction and development of the business strategy. So what is holding IT back from taking their rightful place as the Board’s most trusted business advisor?
In part, the challenge is one of perception. Technology is often seen as an operational function; the grease in the wheels rather than the steering column.
When CIOs are brought into the boardroom, it is often to discuss risk and respond to concerns, rather than provide strategic guidance or pitch new opportunities for growth.
But it is also a symptom of reporting structure. A recent survey by KPMG found that more than 60 per cent of CIOs still report through another executive such as the CFO or the COO.
As a result, they frequently find themselves couching their ideas within the framework of either finance or operations and, as a result, are often unable to break out of the operational mould placed on them by the business.
Winning a place for IT in the boardroom
CIOs will need to step up their game and be more proactive with the business if they hope to gain more influence around the boardroom table.
In large part, this will require IT to place a stronger focus on aligning IT to the business, both at the board and at the business unit level.
And while some CIOs have clearly managed to achieve this statistics show that only four percent actually make this leap.
Here are some tips on what CIOs can do to increase their influence on the board and the business strategy:
Get the operational stuff right:
First and foremost, CIOs must make sure that the operational aspects of the IT function are not only running efficiently and effectively, but also that they are maturing and becoming more stable in the long-term.
What’s more, many CIOs will find that they will need to prove their strategic and transformational skills within their own department before the Board will accept their counsel on the more strategic aspects of the business.
Talk business not technology:
Board members often do not understand the full value of technology; what they understand is business.
This means that CIOs will need to find a way to communicate their IT strategies in terms of measurable business outcomes in order to gain the full attention and support of the board.
So, for example, CIOs must talk about outsourcing in terms of adding business flexibility, reducing complexity and enhancing customer service rather than infrastructure, services and licenses.
Think about the organisation’s ultimate customer:
For years, we’ve talked about CIOs achieving a better understanding of the needs of the business. But, in reality, the needs of the business are often driven by the demands of the business’ customers.
CIOs must develop the ability to understand what their organisation’s customers want and how they want it, and then develop technology solutions to help the business respond to those demands.
This will allow IT to become more proactive in helping the organisation get ahead of the competition by delivering greater value to both the business and its customers.
Be clear about the value that IT is generating:
In my experience, too few CIOs articulate the value that technology adds to the organisation.
All too often, we believe that the business understands what we do and how it adds value. But this is often not the case, particularly at the board level.
The truth is that IT transformation often generates real value to the business, either by reducing costs, increasing efficiency or creating greater transparency.
CIOs must ensure that the business and the board are not only aware of how IT creates value, but that they support these initiatives as well.
Achieving all of this will require CIOs to not only elevate their function to drive greater value within the business, but also to articulate that value clearly in order to close the gap between perception and reality.
So while many Boards may be willing to open the door to the CIO in the long term, it will ultimately be up to the CIOs themselves to demonstrate why IT should be offered the opportunity in the first place.
Bryan Cruickshank and Lisa Heneghan are part of the IT advisory team within KPMG in the UK
Pic Lars Ploughmancc2.0