With all the emphasis on understanding the business, is there a danger that IT leaders are losing their focus on technology itself? Mark Samuels reports.
Much is made of the suggestion that IT leaders must understand the needs of the business. It’s a reasonable suggestion – any technology chief knows success is dependent on engagement with the demands of senior executives. But in this push to comprehend the requirements of the business, have we started to ignore the importance of technology?
It’s a pertinent question, given that most commentators recognise that IT is now the key building block for organisational success. From on-demand computing to social media and mobile technology, IT chiefs will be expected to give quick answers to crucial investment questions.
While such answers will depend on the requirements of the business, the board will first call on an IT chief for their understanding of technology rather than other operational considerations.
Focus on business issues
In fact, the suggested focus of the CIO on business issues – at a time when technology has never been more important to the organisation – could be seen as a red herring. “CIOs must have a view on new technology,” says recruitment specialist Tim Cook, who runs the CIO practice for search firm Russell Reynolds Associates (RRA).
“There’s a case for suggesting that the CTO is the new CIO. IT leaders must be able to demonstrate how they have been innovative with technology and how that has transferred to the business. If they can’t, they shouldn’t answer the phone to head hunters for the next couple of years.”
Next-generation leaders, then, must understand technology. Social media might seem like a time-wasting tool but the chief executive’s first port of call for a Twitter marketing strategy could be the head of technology. Executive responsibilities are going to blur and IT leaders should view the contested role of technology as an avenue to new career opportunities.
Take cloud computing, where the rise of on-demand computing and a stronger role for the procurement function could lead some organisations to question whether the business really needs an IT department.
Cook encourages CIOs to get ahead and think about how they could potentially take responsibility for the procurement function: “The mash-up CIO is emerging – someone who’s completely open to combining areas of business of technology to create new opportunities,” he says.
Increasingly demanding role
It is a sentiment that finds agreement with David Smith, the CIO and CTO for Fujitsu in UK and Ireland, a company with £2bn in annual revenue and which employs 14,000 people. As an experienced IT leader, Smith is already fulfilling the joint demands of the two top IT positions and he expects the demands for all technology chiefs to increase.
Smith believes the most senior IT executive in the organisation must be able to identify how business benefit can be derived from technology in a manner that secures intellectual property rights in line with necessary legislative compliance. Rather than simply being…
… a CIO or a CTO, the head of technology will have to take a multi-skilled and multi-faceted approach.
“I think the CIO is increasingly the chief information technology and security officer,” says Smith, recognising the progressively more blurred nature of executive responsibilities. “We are starting to see titles like chief information and technology officer, or chief information security officer. The CTO is not the new CIO; the CIO is arguably the new CITSO, which admittedly is not the snappiest of role titles.”
Increased exposure to risk
Smith adds that technology is evolving rapidly, but this speed also presents delivery challenges in terms of identifying the value proposition and recognising when IT is ready for the organisation, with the future technology chief – expected to operate across the three dimensions of information, technology and security – carrying an increased exposure to risk.
“If CIOs lack sufficient capability in all three dimensions to deliver value to an appropriate level of risk and cost, then they really should not be in the IT leadership role,” says Smith.
“The pace of technology change is forcing a focus on the technology dimension but, to derive the value, it is critical that the other two dimensions are not forgotten or that the relationship between all three dimensions becomes unbalanced.”
In fact, the potential for CIOs to draw on cloud services leads Smith to conclude that a fourth critical dimension will be added to the equation: the need to enable the business to make sensible on-demand technology decisions. “CIOs should first be enablers of business value and second deploy their skills in a consultative manner, with an underlying thread of corporate stewardship,” he says.
Such a broad range of responsibilities is likely to create severe time-pressures for the future IT leader. With 33 years’ experience of implementing IT for leading financial firms, Tom Herbich has helped automate technology for some of the world’s largest organisations.
Interface between business and IT
Now, as director of business applications and information governance at Deutsche Bank, he is able to consider the interface between business and IT – and the challenge facing the multi-faceted modern IT leader. “It’s a quandary,” he says. “As you learn more about the business, you tend to lose time on IT – finding a happy medium is absolutely essential.
For time-pressured technology executives, Herbich’s advice is to remember that the principles of governance and good management will always be the same. Such principles – regardless of business function – are about establishing simple controls. “Whether the organisation is in profit or loss, you need to make sure that people operating in an increasingly automated world do not become sloppy,” he says.
Above everything else, Herbich argues it should simply be a given that CIOs understand the needs of the business – something that is missed by the oft-repeated suggestion that technology must be aligned with the needs of senior executives. Technology chiefs must give the right advice at the right time – and that advice, given the CIO’s responsibility for IT, is likely to focus on technology.
“The chief executive is going to say to the head of IT that they expect them to know about business, but he or she also needs to know about technology,” says Herbich. “The successful IT leader has to be an interface.”