It is time CIOs stood up and took a stronger line in supplier relationships, says Roderick Angwin
Despite all the talk over the past couple of years about aligning IT with the business and the value of the IT director ascending to full board membership, many IT heads still feel undervalued and that IT is not given its due respect by business colleagues.
In fact, there is a credo espoused by both CIOs and suppliers which can be summed up as:
- The IT industry remains in the doldrums and recovery is slow
- CIOs find it hard to be taken seriously as business people by boardroom colleagues, let alone get on to the board or be appointed chief executive
- Suppliers set the agenda and the commercial context and there is nothing CIOs can do about it.
These points are intimately linked and lead to the possibility that senior IT professionals may have been the architects of their own misfortune.
For example, the dotcom period, though exciting, did lead to our industry gaining a reputation for profligacy. That persists and is now aggravated by a suspicion that technology delivers dubious value at best.
Given the continued importance of technology in the competitive health of most businesses, this seems incongruous. However, there are two key reasons for the persistence of this attitude.
Costs are necessarily high
Firstly, the costs of technology-based business solutions are unnecessarily high. This is largely because suppliers:
- Carry unacceptable costs such as lavish premises and complex management structures
- Demonstrate a lack of focus on driving down unit costs to users
- Only pay lip-service to the challenges of interoperability
- Are reluctant to look at innovative ways of structuring commercial relationships.
This makes it hard for CIOs to drive such investments, as they require good business cases, and, when scaled up, represent significant investments demanding high proportions of total corporate budgets.
Secondly, a significant proportion of an organisation's technology investment is often eaten up by infrastructure costs with no real business value. Under this heading we find such issues as software upgrade costs, ensuing hardware costs, andintegration costs.
As a result of all these factors, our business colleagues too often see IT as an area of high costs and limited returns. This undermines the CIO's commercial credibility and perceived business acumen. If that is the case, how can they expect to be invited to take part in the top table discussions, and why are we surprised that recovery appears to be slower than we had hoped?
So why do I say that we CIOs as a group are to blame for this situation, when it appears to be the suppliers who are calling the shots?
It is about time the suppliers got their act together, driving down costs and delivering high-value solutions that really tackle businesses problems. They need to start listening. But are we CIOs doing everything we can to make that happen?
Punching above your weight
In my experience, we have more power than we like to believe. If a CIO can create a good story and relationship with key suppliers, they can punch above their weight.
If they are prepared to be bold, and consider taking some real, but managed risks, looking at alternatives to the easy and obvious, they at the very least create a new commercial context.
Also, many suppliers want to understand better the views of their customers, to target their investment pounds better, especially when presented with a strong group of user voices.
At B&Q I initiated a small collaboration group of key retailers. When three or four of the top retailers in the UK start talking together about the needs of retail businesses, it creates a convincing argument for suppliers to listen.
As a group, CIOs are stronger than we may sometimes think. We must start to take control of the direction of the IT industry by making the suppliers sit up and listen. If we do, we will deliver significantly more for our businesses and be seen more as a profit enhancement centre rather than just a cost centre.
And then we will all be taken more seriously by our boardroom colleagues.
Roderick Angwin is an independent consultant and former CIO at B&Q