Becoming the Business-Centric CIO

By Darwin John,

Strategic Advisor,

and Arthur Hopkins,

Vice President Technology Consulting

The Business-Centric CIO: Recent studies performed by Gartner and a host of other leading IT research firms have noted that CIOs must get into the business of “The Business.” In other words, A-List CIOs are those who have not only been able to translate IT into real business results but those whose primary focus is on the business and not on IT.

In some ways this represents a paradox. Just in the title, Chief Information Officer, there is a strong connotation that information implies technology. So how does a CIO transform from the business of technology into the business of “The Business?” The answer – not without a lot of deliberate effort, time and fortitude.

We should note that an organization’s size is not a determinant of whether or not this transformation must take place. In our consulting business, we interact with corporations from small and mid-sized businesses to Fortune 500 corporations, and the theme is the same no matter the size: the key to success is less about IT and more about taking on the business priority.

So, what is the #1 priority of any business? Optimizing Stakeholder Value – it’s as simple as that! Of course, optimizing value can be incredibly complicated in itself – it comprises many components, some of which follow:

• People
• Financial metrics
• Products and services
• Customer relationships
• Measurements
• Tools and techniques used in delivery of products and services.

In this article, we’ll take a closer look at some considerations involved in the transformation of the technology CIO into the business-centric CIO.

Business Alignment

To start, let’s address the obvious question – what about the “business of technology” and the “technology of the business?” The business of technology is the domain of the hardware and software resellers – that’s what they do and that’s the role they fill. The technology of the business begins to address the specifics of the CIO’s company, but does not completely define the level of responsibility the CIO carries. As a business-centric CIO you are aligned with more than the operational needs of the corporation – you are aligned with the overall business strategy. This is an important distinction – the emphasis is on the business strategy.

Once you agree with this basic principle of aligning with the business strategy, the second key is to determine your role in impacting the business. Within the current climate that says, “technology doesn’t drive business,” it is easy to conclude that the role of the business-centric CIO is to merely attend to the basic needs of the business as dictated, focusing on reducing costs while striving to maintain service levels. The business-centric CIO recognizes that “CIO” and “technology” are not equivalent terms, and that the mandate against technology driving the business doesn’t ban the CIO from being a business driver. This CIO has the opportunity to be at the forefront by anticipating the forthcoming business needs, the technological options for meeting those needs, and the business impact of doing so.

Business Impact – Understanding the Currency

It is also important to recognize that the success of the business-centric CIO is measured by delivery of business impact. But how is business impact measured? To determine this, CIOs must know what the currency of business impact is. In some cases it might be measured in product sales or services, while in others it could be market share or efficiency. Additionally these deliverables can be either tangible or intangible. The job of the CIO is to know how to deliver results in each and every one of these areas to positively impact the business.

The Balancing Act – Operations and Strategy

In every enterprise there is a suite of core applications and infrastructure for which there are expectations of enterprise-caliber delivery. This suite comprises the fundamental, “bare minimum” where delivery can be measured in absolute terms across the dimensions of performance, availability, maintainability, extensibility, scalability, interoperability and security. The addition of “cost of delivery” provides a key, quantitative differentiator as it relates to these areas. Your effectiveness as a business-centric CIO, however, will be measured in your ability to go beyond delivery of these products and into the realm of service delivery. While it is critical to run the current operations and ensure you maximize efficiencies and effectiveness, this is only one element of the job. Thus, the key within this aspect is how to balance both the day-to-day operations with the future of the business.

Tangibles and Intangibles

Within the day-to-day operations, the business-centric CIO must ensure quality in the delivery of services. While products are tangible and have metrics that are easily traced all the way from the purchase order to the data center, quantifying the intangible notion of service is a moving target that the business-centric CIO is constantly aiming to hit. One key to ensuring quality service is to establish a holistic vision of the continuum of service – considering where the service begins and where it ends. Does it begin with a project kickoff meeting, in a brainstorming session to determine project scope, in the timely reply to the invitation to the brainstorming session, or in some seemingly unrelated interaction with a stakeholder from the business who mentioned a recurring problem for which they have been seeking a solution? Defining the point at which customer service begins is difficult at best, which effectively places the business-centric CIO in a constant state of service delivery mode. After all, there is no such thing as a mere conversation about service – everyone always has an opinion and as CIO you must have your finger on the pulse.

A second consideration is to relentlessly reinforce the mindset that the customer is the “customer” and not merely a user, a stakeholder, or even a sponsor. In many environments these parties are, in fact, empowered to take their business outside to a third party, which means they are no less of a customer to the business-centric CIO who competes in earnest for their business. Note that these customers tend not to seek out product providers, but service providers for their added value.

Cost vs. Value

If your customers perceive that what you provide as CIO is merely a product, then your “product” is differentiated only by cost, and improvement is measured only by reduction of that cost (ideally while maintaining or raising existing service levels). As a result, if you are a CIO who is disconnected from the bottom and top line, you are destined to be viewed as a fungible cost. For this reason, you must map your direction to be in line with the business direction by:

• Understanding the strategy of the business
• Aligning your priorities around that strategy
• Identifying opportunities to positively impact the business direction
• Quantifying the expected impact
• Taking on the accountability for delivering not only the technology results but also the actual business value.

This means that if you are introducing technology that promises increased efficiency in order processing, you must ensure the delivery of the technology, the increased efficiency and the top and bottom-line impact. Once again, the greatest challenge for the CIO is to have a firm grasp of the “currency” of the business and its measurement of value. As important as service level improvements may be, their traceability to the top and bottom line tends to become more difficult to find the harder one looks.

Results and Accountability

As a business-centric CIO, it is critical to have the fortitude to make yourself accountable and the capabilities to deliver results. Often CIOs turn to consultants based on the increased likelihood of either getting the outside firm to deliver results or to have someone who can be held accountable for a failure to do so. Although third-party service providers bring tangible values, especially in those areas where the current environment does not have the skill or knowledge to deliver, the CIO must still align them and their deliverables back to the business objectives. Regardless, at the end of the day, the CIO must see him/herself accountable for everyone’s results, including the outside consultancy. The business-centric CIO must take risks that help propel the business forward. If you as a CIO are not taking calculated risks and making yourself directly accountable, one could argue that you are not being strategic. Risk is inherent in this position.

The People

Some time ago I worked in an environment with some professionals whose response to, “thank you,” was always, “no need to thank me, this is my job – it’s my pleasure.” As patterned as this response may have been, this mindset reinforced the idea of who the customer was and the professionals’ zeal to engage them as such. Ultimately your effectiveness as a business-centric CIO will be a function of your ability to create a business-centric culture that reaches throughout the ranks of your IT organization – and as a result permeates the organization. Business-centric CIOs must make it a daily priority to engage their teams and promote a culture of not only quality and delivery, but taking on the mind of the business. As the leader within the IT organization, you must drive the culture of business first to your team. There cannot be barriers between the business and IT. In fact, if IT is seen as just the technology appendage of the business and your people share this view success will never truly be achieved. None of this is easy and you will experience resistance. Like any transformation, however, time, communication and a good road map will ease the process.

Getting Into The Inner Circle

As a strategic business leader, the business-centric CIO needs to cultivate healthy relationships with the business’ major players, including the stakeholders, officers and other key executives, demonstrating to these key business players a complete understanding of the business’ strategies, proving that your focus is on the business goals first, and technology second.

Action speaks louder than words and to get into the inner circle, you have to deliver, measure and present tangible, quantifiable results to enable the business to achieve its goals. While it’s a slow process, over time, and with proven results, the inner circle will be able to link business successes back to IT initiatives.

Putting It All Together

Ultimately, the question before the CIO is “How do I move from where I am today and make the transition to be a business-centric CIO?” Answering this simple question takes into account the organization’s business strategies and goals, and each individual’s function within that organization. It leads us to the basic principles upon which today’s business-centric CIO must be based. The CIO:

• Is a business leader first and a technologist second
• Must have a seat at the table with the executive management team
• Cannot be successful without understanding the business – strategy, goals, competition, industry, measurements, etc.
• Must instill these values in his or her team.

In today’s dynamic economic climate, CIOs must be business leaders. It is no longer enough to merely recommend a certain platform, infrastructure or product. Today, a critical ingredient for a successful organization is its CIO. Your success in this role will be determined by your ability to take on the mantle of leadership which will, in turn, be a determinant of how well your company succeeds.