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Issue of March 2004 
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The CIO as business strategist

Playing the business strategist’s part

The CIO’s role as a business strategist can prove to be a blessing for a company, but may be easier said than done. Here’s how a CIO can adapt and create winning business strategies made possible by IT. by Minu Sirsalewala

Strategic planning could be defined as trying to predict where an industry and business will be three to five years down the road. Strategic planning skills are critical because without them the CIO can't help his company be agile and respond to changes in the marketplace.

Good strategic planning and thinking skills help the CIO have influence beyond the IT department, as he is the one who works with every business unit. The CIO needs to understand and see more possibilities where technology can help the company be more competitive.

But developing this skill is complicated. CIOs are hard-pressed to give advice on how to think. Instead, they say it's a skill that has evolved naturally from their work experiences.

It begins with you

According to V.V.R Babu, Chief Information Officer, ITC Limited, you cannot be taught how to think strategically, but you can help yourself by attempting to understand the business model and understanding the superior value it is trying to offer to it's customers compared to it's competition.

In the global economy, the competition landscape keeps changing and accordingly the business strategies of existing and new competitors need to be challenged. This will require leveraging IT to create the cutting edge for differentiating itself from the competition.

Participating in conferences and knowledge forums, and looking up relevant research reports can help a CIO adopt new technologies and solutions for an early mover advantage. The experiences and learning thus gained can be shared with the top management and various business heads for creating awareness and buy-in.

Refine strategic planning

CIOs also suggest the following ways to refine strategic planning and thinking abilities.

CIOs should attend company planning sessions. At these meetings, CIOs can see the strategy development process in action, including brainstorming, and scenario-based planning. CIOs can invite themselves to these meetings if they're not already part of the planning team.

Sanjay Govil, Director & Chief Information Officer, Eicher Group points out that you need to delegate tasks to operational managers in IT. This gives CIOs more time to build relationships with colleagues who can provide a big-picture view of the company and where it needs to go in future. None of these skills is easy to learn, and takes years to master. But CIOs who take the time to develop them should excel in their jobs.

C.N. Ram, Head-Information Technology at HDFC Bank articulates, "Think like the business guys. Do not make the mistake of thinking that only business or operations-personnel know the business. It is all common sense anyway. Know that they do not understand technology the way you do."

New skills for IT leadership

In the modern corporation the CIO has to meet a tall order. The CIO has to have the business acumen and influencing skills to pilot executive committees to the right decisions and be technically equipped in execution to deliver the goods. Most of the technology managers have developed these skills through their work experience.

The CIO needs to identify the important players in their organizations and industries and know what issues matter to them. They have to be politically adept, leveraging their relationships with the people to address problems and opportunities.

Other corporate officers should view the CIO as a thought leader. One good way to accomplish this is by staying abreast of important technologies and trends. Most companies already realize that CIOs can and should be responsible for developing company strategy.

Build a foundation

Leadership skill isn't really a skill, it's a quality. CIOs must show personal character. He/she has to say what is right, not just what is convenient, or what others want to hear.

The CIO will have to earn credibility to have committed staffers and partners to be successful. This will require a mix of 'hard' management skills and 'soft' skills like mentoring and celebrating team successes.

Expecting a complete understanding of the changing nature of IT from other executives will require a planned customized approach to influencing. A CIO should involve his peers in IT decisions to get their buy-ins as there are limits to personal influence.

Strategy and vision

The CIO's strategy and vision demands the following:

  • In depth understanding of the companies financial standing.
  • An eye for opportunities to further align IT resources with business objectives.
  • To be a part of various executive committees in order to understand the different functional issues and ways to address them.
  • To adopt a continuous, business-integrated IT strategic planning process in which the CIO aligns IT resources and implements the necessary procedures and operations to support the corporate vision.
Apart from technical competence and good business sense, ingredients that distinguish success from failure are vision and courage. A quotation by Cicero which inspired Napoleon “An army of rabbits led by a lion will always overcome an army of lions led by a rabbit.” Vikram R. SriHari, Director-Business Systems, Coca-Cola India,

The CIO is as much of a salesman as the salesperson in the field. Vikram R. SriHari, Director-Business Systems, Coca-Cola India, opines that sooner the realization dawns, the more effective he/she would be in a business context. He/she needs to coax, cajole and convince the Business, the Management, and all the Functional stakeholders, of the need to adopt IT as an essential component of the strategy for the organization. to achieve this, it is essential that he/she is as well versed in the business exigencies, and I would go as far as to say that, the CIO of the day must even be capable of filling the shoes of a CEO. A dangerous statement, but one that is the key to success of the business, as it exemplifies a mindset. An indication that the CIO's strategies are a success is that the success of technology projects will be measured by how well the organization performs in business, and not on the success of the technology alone. It is not just about how well you manage but the direction in which you steer the company in the market.

The future

Technology and business futurist Don Tapscott, co-author of 'Naked Corporation' says that the trend toward the 'unbundling' of vertically integrated corporations means that their success will depend on how effectively they use technology to communicate and collaborate. By 2010, he says, a company will either have an effective CIO or it will not be in business.

In the coming years the CIOs will have to be bold decision-makers and accomplish their tasks without having to lean on formal authority. CIOs will be veritable business strategy partners by providing inputs that business leaders actively seek.

Many CIOs believe that in the next five years, every CIO of a major prospering corporation will possess the required leadership skills because organizations without great IT leadership will not be in the race.

For today's CIOs, the requirement for the future is clear. Build on your strengths and work hard on your weaknesses. We need to be personally accountable for improving our leadership skills if we are to become true change agents.

SriHari of Coca-Cola says, ”No CIO can make an omelette without breaking eggs, and aside from technical competence, good business sense and the ability to manage the vendor/partner relationship; the two vital ingredients that distinguish success from failure are vision and courage. Napoleon was fond of a quotation by Cicero which inspired him. “An army of rabbits led by a lion will always overcome an army of lions lead by a rabbit.”

The CEO and the CIO have to be the ones who will innovate in the corporation and tell people to change the business processes by taking advantage of new technology.

Minu Sirsalewala can be reached at minus@networkmagazineindia.com

The CIO as a business strategist
Karen Rubenstrunk - MetaGroup

Understanding the enterprise’s core business values and contributing to the company’s ability to reach business objectives and promote brand identity are the hallmarks of a savvy CIO with aspirations to join (or lead) the management committee.

The CIO must manage the IT organization in a way that lends credibility as a business strategist in the boardroom. As the IT organization's role moves beyond efficiency to business effectiveness, CIOs will have four primary objectives

1. Inculcating value management into IT culture.
2. Using IT portfolio management as a communication and investment vehicle.
3. Developing human capital management processes that increase IT employee productivity.
4. Ensuring that core IT processes are singular, understood, consistent, and scalable.

Portfolio Management

CIOs should adopt IT portfolio management techniques to align IT assets with current (and future) business needs to achieve an acceptable balance of risk/reward and value to the enterprises.

As the economic downturn causes many enterprises to reassess their spending patterns, CIOs face increasing budget scrutiny. Savvy CIOs will adopt a portfolio management prioritization process that qualifies and quantifies IT investments and demonstrates alignment with an ever-changing business focus.

CIOs should target IT procurement to improve performance and reduce costs, and consolidate and rationalize IT investments across the IT organization with a single supplier management tool.

Measurement programs

Finally, CIOs should create measurement programs that identify key performance indicators, capture performance-to-plan measurements, and evaluate/communicate the results throughout the enterprise.

IT value programs can be effectively created, captured, communicated, and successful long-term when identifiable outcomes can be explicitly aligned with the interest of all stakeholders-shareholders, customers, board members, and senior executives, as well as staff members.

Leading organizations and top CIOs will master the management and communication of value perceptions using a portfolio management approach. IT organizations with consistently high value ratings will excel in value delivery processes like IT portfolio management, project and change management, adaptive IT organization and infrastructure development, and human capital management.

CIO with respect

The CIO who gains respect as a business strategist will implement these techniques successfully within the IT organization, communicate that success to the organization as a whole, and align the value and perception of the IT organization with the goals and mission of the business.

 
     
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