Taking Care of Business
According to the 2007 Harvey Nash CIO Strategic Leadership Survey, 76 per cent of surveyed CIOs believe their role has become more strategic and 66 per cent have already expanded their job scope. The survey reveals most IT heads are eager to gain more responsibility and widen their remit beyond just the IT department. It also suggests bosses think IT departments need to improve their performance, and CIOs lack faith in their IT teams.
Other surveys confirm that CIOs must be business and IT experts, and they must build teams to support them in both. The relationship between business and technology management is set to be transformed over the next few years, leading to fundamental changes in the role of IT director and CIO. Gartner says the IT department as we know it could be dead within five years. IT directors will begin to take on more management-focused roles in different areas of the organisation, as IT becomes more embedded in the business.
An increased concentration on business processes and outsourcing means that at least 60 per cent of IT departments halved their in-house workforce by the end of last year, compared with the average department size in 2000. Gartner forecasts that at least one-third of IT director roles will change or disappear by the end of 2009. And the remaining CIOs will need to spend more than 50 per cent of their time on external relationships to ensure they deliver expected results.
“IT leaders must work with business and functional leaders to measure the effects of intangible assets and advance methods that will improve the quality and integration of strategic decisions,” Gartner says.
“The challenge has broad implications: The lexicon of modern business needs new nouns and verbs to capture the value of the intangible assets of the Information Age, assets such as brand, knowledge management, intellectual capital and unique business processes. Without auditable ways of measuring the effects of intangible assets on future cash flow, IT and business leaders are left guessing.”
One reason for shrinking IT departments and growing use of outsourcing is that most companies can’t afford to compete with the software firms and the BPOs (business process outsourcers) for IT talent, points out Krishna Kumar, senior vice president and CIO at CyberMedia, South Asia’s largest speciality media house based in India.
The CIO then becomes someone who can work out the best deals with the outsourcing agencies and the bridge between the core business and outsourced IT — someone who is able to speak and understand both languages simultaneously.
“With applications also moving out of the ambit of the corporate data centre to the SaaS model, the trend is only accelerating,” Kumar says.
“Users meanwhile continue to be technology un-savvy (not to be confused with gadget savviness), but the availability of information around means that much like patients reaching a diagnosis about their symptoms even before they consult a doctor, they reach a technology conclusion even before they understand the problem. And the CIO is often given a technology prescription instead of a problem statement. I personally find that having come from the mainline business of the organisation and knowing and speaking that language helps tremendously, at least in understanding the intention behind the prescription.
“My feeling is that in similar organisations, more and more CIOs will come from the ranks of front line business,” Kumar says.
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