Since the time when IT grew out of the world of punched cards, there has been one consistent issue: how does the chief information officer effectively explain what they want to do in words that the chief executive can understand and support?
Although general management has grasped the fact that IT is fundamental for their companies, this is frequently coupled with a resentment and suspicion born out of a lack of understanding about what is being proposed.
And yet these same chief executives are making decisions about other issues, often of greater magnitude, and just as mission critical, in a more relaxed and informed manner. Why?
It is down to communication and this has four basic aspects:
- General management finds it difficult to accept that CIOs have guardianship, not ownership, of the data and the information within a company. This, in turn, flows across functional boundaries guarded by operational directors who fear and resent the thought of having less than total control of their areas of responsibility. Too often the CIO, in presenting an initiative, is seen as "wanting to take over"
- Nevertheless CIOs have to gain support from these same people to get financial approval for projects. Usually this is support for a minimum benefit to enable the project to be accepted. Any greater gains are claimed as effective management while the CIO is left with the blame if a project under-performs. Frequently, the CIO is unwilling to discuss risk for fear of having the project rejected
- CIOs are viewed as being introspective, with technology dominating. They are seen to be obsessed with their own costs and frequently do not identify with the fact that these may be only a small percentage of the total operating cost of their company, and one which they are expected to manage and control
- General management will be unwilling to make changes which could de-stabilise their operations simply to allow IT innovation.
Computer journals have over the years carried many articles about why the CIO is not on the board. In that time rarely, if ever, has a general management magazine asked the same question. CIOs have no right to be on the board and clearly general management do not see them on the board. Yet if IT is so fundamental to the success of business operations, surely the CIO should be up there, contributing to the strategic direction, rather than simply being asked to implement the infrastructure to make it happen?
IT costs as a percentage of total operating costs can vary from 1% to more than 30% , and yet the failure of IT facilities could stop a company in its tracks. This is unfortunate for CIOs who believe this gives them a right to a seat on the main board. The same could be said of a company's transport operations, its supplies organisation, building services and those who enable the effective operation of the business.
Recent issues such as software licensing increases have had large sums of money attached. However, it may only be a small percentage increase in IT costs and may barely register on total company operating costs. But it is pound notes that are banked not percentages. An effective CIO is one who can properly relate his cost management horizons to those of the company as a whole.
CIOs who gain a seat on the main board can differentiate IT from the other support services. They must command the respect, attention and support from those who are responsible for the other 99% of operating costs.
The patronage of the chief executive will help, but unless CIOs can demonstrate full awareness of the business processes flowing horizontally through their usually vertically organised company, and can effectively articulate it, they will not make it on the board.
Robin Laidlaw, former director of IT for British Gas, was previously deputy chairman of Southern Gas. He now runs his own consultancy