CIOs are underselling IT to business

Study reveals that business leaders do not understand what the IT department does, while CIOs are selling themselves short

Business leaders do not understand what IT departments do and CIOs are selling themselves short, according to new research.

In-depth interviews with business leaders conducted by analyst Forrester and TBM Council, a group made up of 800 IT leaders, found that business chiefs do not know the IT budget or how the IT department’s success is measured.

Most business leaders think that IT departments have a 60% bigger budget than they actually do and that they hold back the business, said the report. CIOs said they spend 5% of revenue but business leaders think IT spends 8% of revenue.

There is further discord when it comes to key performance indicators (KPIs). 

Business leaders were asked to state the top 10 metrics that CIOs should be measured on. Four of the top 10 metrics business leaders asked for were not among the metrics that CIOs track. This means CIOs are not currently measuring 40%  of what the business demands. 

“CIOs have long recognised that a language gap exists between IT and its business-side stakeholders, making it difficult for the business value of technology to be clearly communicated and understood,” said TBM Council CEO Rob Webb.

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The report said that IT leaders should be taking advantage of the fact that technology is now more critical to a business's success than ever before.

“Whether the CIO supports it or not, technology is increasingly playing a critical role in business success. The best CIOs will consider this a great opportunity to step up and grow into a true business partner — with technology activities directly linked to business activities — turning IT into business technology,” it said.

But the fact that two-thirds of IT budgets at large companies goes on maintenance mean firms are hamstrung compared to new entrants to a sector. The report also said that because IT departments are risk averse, with metrics and bonuses encouraging safety, most are not agile enough to take advantage of quick opportunities.

The report recommends CIOs use four methods of measuring and communicating their contribution to the business: health, delivery, outcome and agility.

“The health perspective measures the effectiveness of existing controls, while the delivery perspective measures the ability of IT to deliver on its promises to internal and external stakeholder. The outcome perspective identifies and measures IT contribution to business outcomes, while the agility perspective tries to predict the ability of current IT,” said the report.

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