CIOs should abandon the concept of Information Technology and start thinking about Applied Competitive Technology.
That is the advice of Terry White (pictured), business IT advisor and specialist in the relationship between IT and the business.
"We need another word for IT because we just don't do information part of IT very well just the technology," he said.
White, who bases his conclusions on interviews with over 100 chief executives, argues that IT departments only need to do three things for business:
1. Deliver IT without fuss
2. Get involved in business improvements
3. Deliver appropriate leadership
But for most IT organisation, this will mean radically rethinking the role and structure of the IT department, White, research director at CXO Advisor claims.
White, speaking in advance of a presentation at Ovum's Industry Congress for IT leaders in May 2011, says IT departments need to refocus on delivering business results and leadership, rather than technology.
"IT functions spend 75% of their time delivering technology and 22% of their time on getting results from the technology, which leaves only 2% of their time for information leadership," he said.
He advises CIOs to become more business focused by turning their IT departments in to Applied Competitive Technology (ACT) departments.
By outsourcing and automating as much as possible, IT staff will have time to spend working more closely with the business.
"Your in-house ACT department should be all about how do we use technology to provide business and competitive advantage," he said.
Under the ACT model, CIOs should apply IT standards "brutally", even if it means upsetting people, says White.
"I saw a company in Korea that builds an application, then does no maintenance on it, because they say that is the way we will work for the next 5 years. They say: that is how it is and you will work with it. That's what you need to do"
It is vital for ACT departments to nail down governance, ensuring the right decisions are made by the right people, White argues.
"Most IT departments in my experience see things like ITIL and Cobit and meeting SLAs as fulfilling their entire governance," he said.
"If you take a wider view, governance runs to managing demand from the business, and portfolio management - thinking about what the business is trying to do and how we are going to get all those butterflies flying in the right direction. It's wider than IT."
Moving to the ACT model will mean hiring IT professionals that are as much in-tune with business as they are with technology.
"IT people in my view tend to be output people. Business people are outcome people," said White. "But CEOs expect IT people to deliver results not a system."
"In my view IT people have an over-the-wall mentality. They throw a system over the wall, and its up to the business what they do with it."
Instead, IT professionals should show appropriate leadership, White argues, with emphasis on the word appropriate.
"One CEO said that leadership is about new products, new markets and new channels. Full Stop. And if IT is not involved in that, they are not doing anything in leadership. I think he is right"
He cites the example of one CIO who showed the wrong kind of leadership when he burst into his CEO's office saying "here is the brand-new iPad, we should all have one."
"Leadership is about selling people on one of your ideas and having them follow. Its about creating a world view and having people buy into it," he said.
"It is about thinking what does the Ipad meant for this organisation, or what will video conferencing and evolving skyping mean for the airline industry."
"Appropriate leadership 10 or 15 years ago would have been for CIOs in the postal industry to say that email is going to kill our business, but they didn't," he said.
White advises CIOs to hire people who have the business interest at heart, rather than technology at heart.
"When I say they should be working 50% of their time in the business and for the business, they turn around and say when would we have time to do IT ?
"I say that's not your job. Your job is to manage the people who do the IT for you, and to spend your time in the business."
Terry White will be speaking on ACT at Ovum's Industry Congress for IT leaders in May 2011.