James Henshaw, CIO, Pepper Homeloans
Incorporate IT as a strategic function
Business executives have a poor understanding of IT for two main reasons. IT is not incorporated as an intrinsic business function and this is often the result of poor leadership structures. Enterprises have struggled to understand the value of IT-based initiatives because this value can not always be demonstrated through a cash flow type of analysis. They can’t see the actual results and the process improvements that come through this type of process.
I wouldn’t say I educate my peers around understanding IT because it should be more about having the communication to foster the understanding, and having a governance process in place that provides a clear and transparent IT decision making process that leads to consistent behaviour in the senior management team. This allows the whole organisation to make better IT decisions.
If the governance process is poor, there will be inefficiencies and the business needs won’t be fulfilled. IT would be micromanaged and the framework would result in IT underperforming. It’s up to us as IT leaders to demonstrate the benefits that a framework could have.
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As CIO, I’ve faced the challenge of being micromanaged. I approached the CEO, who agreed to have an external consultant come in and conduct an impartial review of our IT governance framework. What they focused on was how we managed risk related to IT and how we strategically planned activities and communicated these changes internally by opening up the executive team’s eyes. It allowed us to put a proper framework in place. When IT is incorporated as a strategic function, you have all of the key stakeholders involved and this puts a proper accountability framework in place that encourages desirable behaviour to manage IT across the entire organisation. Getting the proper framework has really helped me and, as a result, IT is considered on the same level as other areas of the business.
Peter Nevin, former EGM Business Processes, Sedgman
Build business value
IT has been around organisations for 20 or 30 years. CEOs may have experienced IT at university and through their education and they bring these things to bear within their company. It’s unsurprising then that IT leaders are working on a model that is at least 10 years behind what IT education systems would have us believe. When I completed university, IT was on punch cards and we were writing in Cobol. CEOs today do adapt to economic and other conditions, but they would be affected by their previous work experience and early education. I don’t think this is any different from any other support areas like HR or finance — the recent changes to the financial market will take some time to filter through and, in essence, this is what is happening to IT departments.
It’s hard to work out the best way to educate peers around the value of IT. I think the first thing is to assure your peers that the IT group is capable of delivering IT value. There are two ways to do this. One is to be internally focused by physically delivering things that truly achieve business value for individuals in the organisation. The other is to be externally focused by making use of external experts that help that process.
If you don’t believe something is going to work in an organisation, there is no point in investing in a governance process. If you look at the business planning side of things, the key is to have IT involved in the strategic planning process. In an ideal situation, business leaders should consult with IT and develop business plans and governance structures with this.
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Selling business governance to stakeholders is definitely about providing the deliverables, and tying into the company’s business plan and strategy. An important aspect is to have IT follow the natural flow and behaviours of the organisation, particularly with governance. IT governance structures should be at the same level of discipline as the organisation’s overall governance behaviour.
When it comes to tools that CIOs can use within a workplace to show CEOs how important the role of IT is, showing examples of those who have been successful before is very important. To be honest, there are so many examples around. If you look at FedEx, it wouldn’t exist without its IT environment. Finding organisations that are similar to yours that have good results and using these as examples is a good way to get the idea across.
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