How to shape new opportunities despite tough conditions...
...relating the mechanics of cost control, and the benefits of IT, to the business. Now, the CIO is more business-savvy. The background in technology operations matters less with each passing year," he says.
3. Use governance as an enabler
Business leaders are rightly reticent about the growing bind of compliance, a series of regulations which mean CIOs must help the business act in a particular manner. It is perceived that such rules can restrict creativity, and research from Xantus suggests that 57 per cent of CIOs in the financial services sector dedicate more than a third of their annual IT change budget to regulation-specific IT.
But the good news is that 87 per cent of CIOs believe regulation can also help drive innovation, according to Xantus. Steve Jeffree, operations director and group CIO at The Law Society, agrees and says good governance can act as a starting point for creativity and can actually free up the CIO to ask the right business questions.
"The Law Society receives a lot of attention from vendors who can see the potential for innovation. The legal sector is a market that's difficult to penetrate and, unlike other industries, there's not a reliance on a small set of really huge firms," says Jeffree.
"I'm a believer in contracts helping to drive the right kind of behaviour from suppliers. That positioning has to be undertaken at the set-up of a contract. Aim to get more from the relationship that's enshrined in the contract. Attaining that level of achievement relies on the right partnerships that are based on mutual benefits."
4. Get creative when it comes to contracting
Andy Jones, director of business process outsourcing at Xerox Global Services, recognises innovation is crucial for his firm's European customers: "Outsourcing is no longer just about service-level agreements," he says. "Customers want to know what we're going to do that is actually new."
Jones refers to the growing importance of gain-share percentages in contracts, which mean the customer and service provider share financial gains through innovation. This approach is designed to encourage end users and service providers to concentrate on innovation as a means to profit creation. To help create change for the business, such contracts require clear objectives, senior executive sponsors and progression plans.
Gain-share contracts mean both sides of the partnership are committed to decreasing the volume of work. Jones says such engagements make the service provider work hard to help CIOs improve and rationalise processes.
"Smart outsourcing can help drive change in the customer. It's all about creating outcome-based services," he says. "There's nothing like a discussion that says you've got a set period to change something. The contract is the reality for innovation."
5. Match desire for change with business demand
Mark Settle, CIO at BMC Software, has worked in senior IT leadership roles across a variety of industries, including distribution and aviation, and he believes the role of the CIO changes in line with the search for creative solutions for business issues.
"Every organisation is different in terms of personalities and the executive team, and the mix between the demand for innovation and the requirements for survival," says Settle. "The CIO has to be pretty flexible. A successful CIO has to have the right relationships, so he or she can engage with the business as it grows."
Settle has three key priorities for the next few years, namely cloud computing, software as a service and consumer IT. He says enthusiasm for projects across such initiatives must be matched by an understanding of line-of-business demands.
"Customer requirements get reinterpreted by each business function and passed down to the IT team," says Settle. "But as customer demand is reinterpreted, each business function has its own requirements and interprets customer demands in different ways. Such internal interpretations are not necessarily wrong but they can lead to something being lost in translation."