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How CIOs can earn respect from business peers

CIOs recognise that standing out means being more like a business manager than a technology guru

Although technology is often cited as a driving force behind initiatives to transform businesses by reducing inefficiencies in manual processes, IT remains a cost centre.

Advanced analytics, artificial intelligence and automation are among the tech innovations that can be harnessed to create business value, but the IT function appears to be regarded by business as an IT operations function, rather than a department capable of driving digital-powered change.

According to a new study, CIOs believe their success as leaders is not based on their experience as technologists, but on characteristics that are expected from any leader in the C-suite – strategist, communicator and business relationship manager.

But they remain at odds with the business in terms of how IT success is measured, the study, from Grant Thornton and the Technology Business Management (TBM) Council, found.

The report, CIOs as trusted business partners, found that despite the promise that technology can improve operational efficiency and create bottom-line growth, many business partners see IT organisations as a significant cost, and do not understand the value they are getting for the money spent.

LaVerne Council, national managing principal for enterprise technology strategy and innovation at Grant Thornton, said: “CIOs see themselves as trusted business partners, but the road ahead is not an easy one. CIOs should articulate the value of IT spend in the same terms measured by their business partners.”

When asked how they think IT success should be measured, two-thirds of CIOs said success metrics should be based on successful execution against strategy and plans, and just over half (52%) said IT success should be measured against improved ability to innovate.

The TBM study found that the priorities of business leaders appear to be different, with two-thirds having cost reduction as the main success metric for IT, followed by successful execution against strategy and plans (52%).

According to the TBM Council, the challenges most cited by CIOs are inherent in running the business of IT, and aligning the organisation with the business and its goals. The report said: “These challenges are amplified by the divide between how CIOs want to be measured and how they are measured by their business partners. If a CIO’s success is measured by their ability to reduce costs, they will have a difficult time articulating the value of IT spend unless they demonstrate that value in the same terms measured by their business partners.”

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The TBM Council said CIOs earn stakeholder trust by providing excellent customer experience and delivering quality products and services. “Only after they have proven their ability to improve services and project delivery will stakeholders be more collaborative on prioritising across the enterprise,” the report said.

The study also found that organisations are collecting far more data than they can actually use. In fact, 38% of of the CIOs surveyed cited surfacing insights from the data, or insight-enabling capabilities, as their biggest opportunity to demonstrate IT’s value to the business.

The report said: “Our respondents recognised that the biggest opportunity that data and analytics presents is the ability to surface insights – taking the raw data and turning it into actionable information.”

But although effective data management is critical to success, many CIOs do not have a robust data management programme in place, said the TBM Council.

It recommended that CIOs should walk a careful and transparent path to building their data management strategy in order to build trust. “When data is mismanaged or misused, it can result in backlash,” the report warned.

Cyber security spending

Given that the business environment is one where cost-cutting is a prerequisite to demonstrate business prowess, CIOs said in the survey that they have spent more on cyber security over the past two years, with 83% having increased their cyber security spend.

The report said that although this expenditure is  a necessary reality, any spending on cyber security measures is likely be scrutinised for a return on investment by C-suite peers and business partners, the TBM Council warned.

According to the TBM Council, the clearest path forward for CIOs to become trusted business partners is to demonstrate that they can control costs and communicate IT value in a way that resonates with the business. To support this, the organisation provides a framework to help IT leaders communicate the business value of tech investments.

“With TBM, CIOs and their teams use a data-driven financial framework to evaluate investment decisions using a common language that aligns IT spend to business value,” said Todd Tucker, vice-president and general manager of the TBM Council.

“With this information, organisations can enable prioritisation, optimise business costs and accelerate decision-making. In fact, 74% of survey respondents identified the ability to shift spending to innovation or growth as the most important benefit of TBM.”

Read more on CW500 and IT leadership skills

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