CIOs New Mantra To Drive Business Results
Many executives expect IT will play a growing role in driving business results, according to a new survey by McKinsey Global. For that to happen, CIOs must broaden their profiles and prove IT’s effectiveness in areas such as digital and innovation. [Read the full report here ]
As part of that, respondents also believe that IT should be playing an important role in shaping strategy around digitization. Roughly 80 percent say that business and technology should collaborate on digital strategy, compared with only 55 percent who say they do so now.
Other responses reinforce the merit of IT’s contributions, both current and potential. When technology leaders are involved in shaping business strategy, IT’s ability to create value is greater. With engaged CIOs, digital initiatives do better as well: 43 percent of respondents with very involved CIOs report significant business impact from their digital initiatives, compared with 23 percent of all others who say the same.
However, there are innumerable concerns in this regard. Despite this opportunity for IT, this year’s results continue a long-standing pattern of performance concerns in the IT function, even among IT respondents themselves. What’s worse, perceptions are especially negative in the areas that are most critical to IT’s future value proposition.
Moreover, many executives can imagine replacing IT with external vendors or service providers. About one-third of all respondents, including 43 percent of business leaders, describe IT as significantly or fully replaceable by vendors and third-party providers.
In response to the challenges that the survey results revealed, here are three steps that can help CIOs and IT organizations strengthen their value proposition and contributions to the broader business. These steps are mutually reinforcing, so taking all three together will increase the success and impact of each.
1. CIOs must rewrite their job descriptions. Despite performance concerns and an uncertain future for IT, CIOs must also work hard to elevate their role within the organization, developing both their leadership and business muscles while building a more direct reporting line to the CEO. To do so, they will need to write a more ambitious job description that reflects their organizations’ broader aspirations for growth and innovation.
This could mean taking on newer responsibilities around customer engagement, such as omnichannel design, design and oversight of analytics, and the centralization and automation of core business functions. CIOs will also need to focus on developing both the functional skills (such as digitization and delivery) and the leadership skills necessary to gain credibility as a true business partner.
2. Address nagging causes of IT ineffectiveness. The results point to three critical areas of IT ineffectiveness—a lack of priorities, operating-model weaknesses, and issues related to talent—on which organizations must make quick progress. The first requires a frank discussion with business leaders to close the gap between perceived and actual priorities. Agreeing on priorities will help IT play a clear, focused role in the organization, ensure visibility and appreciation for the technology-related transformations IT is leading, and let IT leaders shift their time and resources to the areas the business values most, such as innovation and integration. For example, the search for top IT talent must include new approaches to workforce planning, attraction, evaluation, and development, as well as the culture of the IT organization.
Integrate technology across the enterprise. Another opportunity for CIOs is the role of integrator. Respondents report a wide variety of technology-leadership roles at their organizations, and that technology is touching upon the work of many business functions.CIOs, then, are in a unique position to observe these activities at their organizations and serve as a central architect to help manage the technology-enabled innovations and capabilities.
To do so, they will need to strengthen their own transformation muscles by freeing up change-minded technology leaders from their day-to-day activities and building transformation-leadership capabilities within their teams. They will also need to connect more closely with committed business partners who understand the long-term journey of transformation via technology and are willing to help navigate the organization through potential disruptions.
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