IT is the business.
Regardless of how closely IT products and services are tied to the real needs of the business, if senior management does not clearly understand what IT is doing, it will be treated as a cost centre. And any IT department that is still considered a cost centre risks being outsourced.
It is no longer sufficient just to manage and be managed from the top down, from boardroom to IT department. CIOs and IT directors are change agents for their businesses. They must speak in terms of value, finance and return on investment across the business or risk losing their credibility.
Leading CIOs in Global 2000 enterprises and government agencies have shifted senior management’s perception of IT from a cost centre focused on increasing organisational efficiency to a value provider focused on winning competitive advantage for the organisation.
Focusing on value requires a strong risk management programme, covering regulatory risk (the need to meet specific regulatory and legal reporting and financial monitoring requirements), financial risks (mostly traditional insurance-related risks), and business risks (the risks associated with gaining and maintaining competitive advantage and identifying and capitalising on new opportunities).
Very few CIOs understand the importance of engaging the business in meaningful dialogue on hot business topics such as corporate governance and the impact of legislation on the business. Look at how IT can have an impact in each and every business unit, each and every department.
What will be the impact of the
US Patriot Act, International Accounting Standards, Sarbanes Oxley and Basel II?
When it comes to transforming the culture of IT within an organisation and winning senior executive buy-in, perception is reality. CIOs and IT directors need to change the perception of the IT department, both inside it and throughout the business, particularly at senior management level.
Do not forget the staff either. CIOs and their IT leadership team often give this vital area less attention than it deserves. Efficiently run IT operations need IT directors and CIOs who are focused on creating, maintaining, and supporting highly productive IT workgroups and on supporting the workgroups in the business with appropriate collaboration and other tools.
My final piece of advice is to document every process so it can be duplicated wherever that task needs to be accomplished. An organisation with 10 regional helpdesks worldwide, for instance, should have a single helpdesk procedure that is repeated in each helpdesk, not 10 different ones.
As technology becomes more central to business success, CIOs and IT directors need to transform their IT organisations from order takers to value creators. To accomplish this, they should focus on developing IT operations that create, measure, and communicate business value.
Rakesh Kumar is vice-president of Meta Group
Jean-Louis Previdi, research
director at Meta Group, surprised many when he used last month’s conference run by the analyst group to say that IT directors should stop focusing on aligning IT with the business. Here, Rakesh Kumar, vice-president of Meta Group, expands on the theme and, on page 16, industry commentator and interim IT director Colin Beveridge responds.