Sean Curran, former COO of CCLA Investments and CFO of BGC Brokerage, kindly contributed the following article on the true business value of I.T.: The IT press conveys the impression that the key issues facing the Chief Technology Officer (CTO) today revolve around data, security, the use of cloud and the implications of the rise of the bring-your-own-device-to-work generation. But the view from the boardroom is different.
The CEO’s priority is to grow the business. He wants to do this by introducing new products, opening up new communication and delivery channels, increasing repeat business through information-lead loyalty schemes and wider, richer customer interactions, by attracting new customers through targeted marketing campaigns and by smarter, more relevant interactions through social media. The CEO wants the IT infrastructure to be flexible, scalable, agile and to provide a cost effective service delivery. He wants innovative IT with good governance, the time to market to be fast and solutions to be mobile and customer-friendly from the start. Applications are moving to the web. Employees are using their own mobile devices. Cloud-based, consumer applications are creeping into the business.
The union of social/mobile IT with transactional capabilities give companies a new way to move at the speed of their customers and new methods for engaging with customers to build multifaceted relationships rather than linear transactions. The big challenge for the CTO is to put IT into a position to enable the business to take advantage of these and other new opportunities. Today many CTOs serve a relatively tactical role and are responsible for technology provisioning, break/fix support, software and hardware upgrades and operational support, including email, application support and password management.
However simply being able to keep the ship afloat and hold costs within budget is probably no longer enough. So before the CTO even starts there is the danger of an expectation gap. If the CTO wants to play a significant role in the future enablement of the business then, in my opinion, he needs to move away from the traditional approach to IT. This transition requires both the CTO and the whole organisation to make changes.
The CTO needs to change if he wants IT to be seen as a key partner in enabling the business to succeed. Without that change there is the danger that IT will continue to be seen as just an expensive, inefficient and ineffective business overhead unit.
The role of the CTO needs to evolve too. CTOs need to deliver competitive advantage to their business and be heavily involved in introducing the new products and services that will grow the business.
The changing CTO
The emergence of social media and its relevance to the business world has created a mixed response from CTOs. On the one hand some CTOs triggered immediate and unconditional opposition to social tools, citing security challenges and the lack of control over development as technological concerns combined with lack of familiarity, and unproven value as business concerns. On the other hand some CTOs argued that the social-driven revolution was a massive opportunity for the business and if harnessed correctly would help the business to grow by providing real-time customer insights, engagements, and customer-centric processes. The social revolution is also becoming indispensable internally for motivating existing employees and recruiting great new talent, and in forging deeper and more-valuable relationships with partners. It is no good for the CTO to complain that the business just doesn’t understand the current state of the overall IT infrastructure, all the problems this brings and how difficult it is to make progress. The CEO is not particularly interested in the technical issues that lie behind the business' needs - that is why he has a CTO.
The CTO needs to engage with the business before strategic and tactical business decisions are made.
He needs to understand the ambition of the business and he needs to articulate the potential technical solutions to achieve the business ambition but he needs also to explain the total cost of ownership to the business of the solutions presented and most importantly he must clarify current and future business risks involved in each solution presented and explain the journey the organisation needs to take. It is very clear that to take full advantage of this opportunity, the CTO will need to move from being a tactician to become a strategic technology visionary, assuming new responsibilities, working methodologies and skills.
If the CTO continues to behave like a reactive business unit head then he cannot complain if he is treated as such. The strategic CTO must collaborate with the CEO in upgrading that tech-centric plan into a broader vision for a sweeping business transformation of the entire enterprise. He needs to be a leader instead of a follower; a disrupter instead of a go-alonger; and a business-driven executive instead of a tech-focused manager. For those CTOs who want to make the change, changing their own behavior is unfortunately only the starting point. A simple change in approach will not work in isolation. Moving an organisation away from just treating IT as a reactive business unit means making a wholesale change to the philosophy and structure of the organisation to move IT into the role of business. I will deal with the five which I think hold the key below.
1 Changing the perception of IT
The first hurdle facing the changing CTO is ensuring that the organisation has a common understanding of the role and the priorities of IT. The changing CTO will be part of an executive team taking the organisation on a journey and although there might be consensus on the destination, in my experience, unfortunately there are differing views on the starting point and the route to be taken. So before trying to explain where we are going the CTO has to deal with the where we are now issues. People talk about IT as if it was a single item and assume everyone has the exact same understanding of what IT is. To understand the extent of the problem you only have to look at the Wikipedia definition. Wikipedia defines IT as:
"The application of computers and telecommunications equipment to store, retrieve, transmit and manipulate data, often in the context of a business or other enterprise. The term is commonly used as a synonym for computers and computer networks, but it also encompasses other information distribution technologies such as television and telephones. "
It goes on to say that in a business context, the Information Technology Association of America has defined information technology as:
"the study, design, development, application, implementation, support or management of computer-based information systems". The responsibilities of those working in the field include network administration, software development and installation, and the planning and management of an organisation's technology life-cycle, by which hardware and software are maintained, upgraded and replaced.”
What does IT/ICT mean to your organisation? It is clear that IT has a variety of meanings to a variety of people. It embraces a vast array of things and impacts upon all employees. So how does your organisation perceive IT, what does the business actually want IT to deliver and what do employees think IT should be doing. The bad news for the CTO is that today everyone is IT-literate and most have a view on what needs to be done.
Employees in their own homes have broadband, some sort of network, video capabilities, phones, mobile devices to manage and their own user applications and as it all works so it should be simple enough to get business IT sorted especially as so much is spent on it. Unless the organisation is clear what is encompassed by IT is but more importantly what IT is expected to deliver, there will inevitably be constant criticism of the CTO for non-delivery. CTOs are clear that given time, enough money and a freeze on all new business initiatives IT would be sorted.
But this is not going to happen in the real world. The answer is for the CTO to manage expectations by being heavily involved in the organisational strategy and the planning process. This is not something that a lot of CTOs have done in the past. For some reason over the years CTOs have been disengaged in central planning preferring to do their own thing and we have ended up with a business strategy and a separate IT strategy. Employees more and more see IT as a department which consumes vast amounts of budget and resource without really addressing their requirements.
CTOs are having to deal with the fallout from previous investment and management decisions but employees and especially those who have only recently joined, are focused on tomorrow and are not that interested in legacy problems. They want to get on with doing tomorrow’s business. Until and unless the whole organisation and its partners have a shared view of IT’s role and the journey it needs to take, the CTO will be fighting a losing battle.
Article kindly written by Sean Curran - former COO of CCLA Investments and prior to that, CFO of BGC Brokerage.
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