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This is ‘the business’. You’re standing in it!

This is ‘the business’. You’re standing in it!

The old corporate stovepipes are starting to break down, says Kevin Noonan of Ovum. So how is this impacting the role of the CIO?

I recently met with a corporate CEO who remarked with some frustration, “I don’t know why all our IT people talk about IT, as if it is somehow separate from the business”.... “How can our company become more innovative, if we keep on building these barriers between people in the same organisation”?

Some old slogans need to be quietly consigned to the rubbish bin

There was a time when it was seen as a good idea to differentiate IT from the business. The basic rationale was sound. IT does not exist for its own sake, but delivers outcomes to support the business. Managers, responsible for business lines, need to call the shots to ensure IT remains well aligned. For many years, business alignment was seen as a key objective for IT managers. It was measured through surveys and became a key performance indicator written into many IT job descriptions.

Kevin Noonan, Ovum
Kevin Noonan, Ovum

Today’s enterprises need to relentlessly drive greater productivity and innovation. There is no place for corporate divisions.

But sometimes, even the most well intentioned ideas can go off track. In some organisations, the differences between IT and the business turned into walls of division. Indeed, some system development methodologies continue to require specifications to be developed separately as if some invisible wall prevents managers in the same organisation from working together as equal partners. Driving better outcomes is everybody’s job.

Read more: CIOs: ‘Lead the disruption, be the disruptor’

Another corporate CEO, who was just settling into his new role, met separately with each of his direct reports. In one meeting, the CEO was asked if he could just tell that meddling CIO to stop coming up with ideas about how to drive the business more efficiently. The CEO responded politely that perhaps it was time for the other senior executives to come up with a few ideas of their own!

Today’s enterprises need to relentlessly drive greater productivity and innovation. There is no place for corporate divisions.

Everybody is an IT person’

There was a time when it was common to hear managers declare, “I’m not an IT person.” However generational change has delivered a very different perspective. In an age of smartphones, apps and social networking, everybody is an IT person.

Read more: CIO100 2014: Who are New Zealand’s top ICT users?

Life for a technical CIO is becoming increasingly difficult.

Kevin Noonan, Ovum

Technology pervades our personal lives and corporate operations. Technology is now part of the basic fabric of the business. In an earlier study across New Zealand and Australia, Ovum conducted a series of one-on-one interviews with CIOs from various sized organisations.

Read more: More Than a quarter of government CIOs expect budget cuts this year: Gartner

In our report, Ovum described three very different types of IT:

Some CIOs are still pursuing a very technical role where the key focus is on services, procurement and hardware/software management. These CIOs are under significant pressure to reduce costs and deliver more. They are caught in a difficult situation of needing to become more agile, while at the same time maintaining ageing legacy systems that are slow to change. They also have to contend with significant budget leakage as many parts of the enterprise quietly go their own way, through shadow IT budgets. Life for a technical CIO is becoming increasingly difficult.

Some CIOs are pursuing a broader corporate agenda, leveraging IT to drive productivity savings across the enterprise. These CIOs are spending the minimum time necessary to maintain legacy systems while concentrating on quickly implemented initiatives that deliver quick savings. For these CIOs, it is all about building the momentum for change through demonstrated savings.

However, there is a downside to this approach. At some point, other managers in the enterprise become weary of having efficiency measures applied to their own budgets, and cooperation becomes more problematic.

A much smaller group of CIOs are pursuing an innovation agenda, working with other managers to encourage and drive new ideas. This approach engages with staff in a way that overtakes the need for shadow budgets. In the long term, these CIOs appear to be performing much better than the others.

However, innovation is a risky undertaking. There is a temptation to go for big projects with big potential savings. Feedback indicates this is the wrong approach. Big agendas can meet fierce resistance from entrenched positions. It is easy to become bogged down with internal squabbles. The better approach is to focus on quick wins and quickly harvest the savings.

The old corporate stovepipes are starting to break down.

Read more: Springfree Trampoline uses the cloud to integrate ANZ and North America business systems

Where you stand depends on where you sit

For a number of enterprises, the role of IT continues to be a contentious issue. Some managers feel compelled to take a stand, as a matter of principle. However, as IT becomes more ubiquitous in the broader community, more and more people find themselves sitting in the role of an IT person. Perspective changes when assisted by practical experience.

The old corporate stovepipes are starting to break down. The big challenge is figuring out how the CIO can best leverage these opportunities in a changing enterprise.

Kevin Noonan is research director, public sector, at Ovum. Reach him at kevin.noonan@ovum.com.

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