The successful CIO does far more than keep the server room lights on: they understand their business’s needs and how to use technology to serve them.
But it can be difficult for IT leaders to understand how best to work with the business, especially when having to juggle so many competing demands for their attention.
Ian Alderton, a CIO with more than 22 years experience in the IT industry, shares his tips on how the IT team can deliver the competitive edge demanded by the CEO.
1. Swot up on the business
The CIO and the wider IT team should be seen as a “trusted advisor” to the business.
“Don’t have a technology organisation that is at arm’s length from the business,” Alderton said. ”Have one that knows the businesses’ commercial operation so it can say to the business ’I understand your products and know where you’re going tomorrow, and can deliver the technology you need’.
“I’m a strong believer that if you sit down with the business and understand their products - maybe go on a course and learn about those products, how you trade them, what the cash flows are, how the business manages risk and how that impacts the bottom line - that puts you in a completely different position.”
CIOs that fail to understand business strategy and the role IT plays in enabling it, “risk technology just becoming an order taker”, where instructions are carried out without understanding of how it will benefit the business.
“When you become a trusted advisor it will take the business and the technology to a different level. No longer will you have that at arms length conversation of ‘I just want one of these’.”
2. Sell business and not technology benefits
When talking technology with the board, spell out how the IT benefits business strategy and the bottom line.
“For example, when you’re reporting to CEO about technology portfolio, use an investment management approach,” he said. “Say: ‘This is your investment you’re making in technology, these are the outcomes that are going to be delivered, this is the benefit to the bottom line and the revenue, and this is where we are’.”
He added: “Talk in terms of investment, ‘You’re paying £50,000 for this’, this will deliver to your bottom line over three years £150,000′, as opposed to just saying this is ‘red, amber, green status’, which is not going to tick the box of the CEO.”
3. Get the IT team invested in the business
It’s not enough that the CIO is invested in the business - the whole IT team should feel like they are making a contribution to the bottom line.
“If they’re working on a particular development show them it’s not just that they’ve delivered ABC, but how that will enable the business.”
Alderton said that means encouraging staff to think about ‘What does that deliver in terms of financial impact?’ before starting each new piece of work or ‘What is the impact to the business?’ before making a change.
“For example, it’s not just that they delivered a great piece of code, it’s that they delivered a great piece of code that enabled the business to deliver a product faster to market and secure a new revenue stream of £150,000.
“If you start looking through a business lens it starts changing people’s behaviours and that will start amplifying through the technology organisation.”
4. Focus on the stuff that makes a difference
Focus in-house work on those products, services or delivery channels that provide a competitive advantage and outsource those commodity services that don’t add value.
“Instead of me having to pay £500,000 for something that’s not a competitive advantage I’d much rather give that to a third party and they give me a per transaction cost, and I don’t have to carry the maintenance cost, the capital cost and development cost.
“Focus innovation on the customer and opportunities where the business can outmanoeuvre the opposition,” he said.
5. Ask whether it’s time to move on
Just because your business has always run its tech in a certain way, for example giving each staff member the standard desktop PC and phone combo, it doesn’t mean it’s the best fit for the organisation.
Ask “What does it cost just to keep the lights on for technology?”, Alderton said, and whether there is a more efficient way of providing IT.
“This covers a whole magnitude of things. It’s not just focusing on the sexy stuff, it’s looking at the plumbing and the non-critical tech through to the telco side of things,” he said.
“For example, many people might have a desktop and a laptop and a phone. Looking at the corporate bill you can ask ‘Do I need all of that infrastructure?’” he said.
“If I can virtualise that then I don’t need that box underneath somebody’s desk that’s depreciating. If I can centralise that I can get better utilisation that will drive down my cost of ownership and improve my depreciation, power consumption and security.”
Business processes and workflows should be put under the same scrutiny: “Things evolve and grow , and if you take a step back that wouldn’t be the workflow you’d implement for a greenfield site.”
Where possible automate the workflow within the organisation, to reduce cost and the risk caused by mistakes when work is handed from one manual business process to another.