The role of IT has changed dramatically over the last two decades, and the expectations on technology leaders like CIOs and CTOs have evolved to reflect these changes. Often, those IT chiefs are required to help their organisations adjust to the business disruption this technology-led change has ushered in.
These issues are revealed in stark detail in the recently released IBRS State of Enterprise Software Report 2019. The report describes a significant shift in the way technology platforms are selected — for instance, with business managers much more likely to be engaged and driving outcomes. Other research, such as the global Harvey Nash CIO Survey, confirms the trend.
The reason is simple: smarter business managers today recognise that the currency of information is critical, and are recalibrating around the strategic importance of data.
Meanwhile, the perception of IT is also changing. CIOs want their departments to be seen not as a cost to the business but as a change agent and an advisor to the organisation as it strives to become more data-driven.
However, it is still the case that too many organisations fail to recognise that the I in IT is for Information.
According to Geoff Wenborn, Chief Digital and Technology Officer at People’s Choice Credit Union, “There is a broad gap across organisations in terms of the maturity and value recognition of the IT leadership role.
“Often this manifests when there are unclear accountabilities between executives with responsibility for functions such as marketing, revenue, customer experience and digital, along with technology.”
Bridget Gray, Managing Director of executive recruiter Harvey Nash says this naturally leads to a level of frustration for some IT leaders. “The key indicator that reduces this frustration tends to be a supportive CEO who understands that budget and influence are increasingly two different things when it comes to IT investment outside the IT department.”
Role of IT
Part of this trend is a natural function of business leaders wanting to be more involved in technology choices that affect their departments — and which, frankly, impact on their KPIs and the emergence of solutions based around software-as-as-service.
IT should not be seen as an impediment in this sense, but rather as an enabler — helping these business leaders fulfill their mission in the organisation. This assistance can be provided across a range of areas — from policy and governance through to executive alignment and value delivery.
Organisational culture and transparent decision-making are the keys to building successful, digitally enabled businesses, says Wenborn. Stronger engagement by the technology function with business leaders offers the best path to influence the right choices and trade-offs.
According to Wenborn, “From the IT function, engagement in any way possible is the best path to influence the right choices and trade-offs. The technology vision and technology strategy — with guidelines for technology choices — should be clear, shared at board and exec level and understood across the business as well as in IT.”
We also asked Wenborn what pitfalls business leaders might face if they exclude IT or bring in IT too late in the decision cycle.
“The biggest issue ultimately is technology debt, which builds up in most legacy technology deployments very quickly. Ultimately someone, usually further down the track, pays for the short-term decision-making and lack of strategic IT input to the investment in technology,” he said.
“As an example: replacing a core banking system which may cost millions but doesn’t add any business value because you are only staying current.”
A better approach would be current to market all the time, and aligned with some architectural guide rails related to business priorities.
“Often a systems improvement has a lead time of only very few months in terms of value or differentiation and becomes a millstone for many years when nonstandard technology has to be supported, managed, interfaced and worked around.
“Companies with a lack of agility and flexibility in their enterprise architecture will fail,” he warns. “And that comes back to poor decision-making, in which both business and IT can be culpable,” he said.
The proliferation of easy to procure, easy to use cloud-based services has put technology within easy reach of any business manager who wants to experiment, says Harvey Nash’s Gray. “And this inexorable rise is not going anywhere. Although this year it appears to be somewhat leveling out, I firmly believe it is indeed going to continue to increase.”
It is a balancing act for the CIO, as recent research suggests those businesses that encourage business-led IT are more likely to be better at customer experience, faster at getting products to market, and offering an overall superior employee experience.
“Refreshingly, given these findings, we now see that 64 per cent allow or actively encourage it,” says Gray, who also argues that CIOs need to drive this initiative and take control.
“They need to proactively get the business managers engaged and involved in the overarching business strategy, and how technology will underpin these desired outcomes,” she said.
“They need to change the conversation with their peers into one of collaboration and enablement, not to where it has been — where investment and adoption is happening ‘outside’ the technology department and viewed as a negative and perhaps the IT department seen as a blocker or unresponsive.”
From Gray’s perspective, the CIO can no longer take a neutral role.
“Those who are succeeding as a CIO, driving successful and stable transformations, are the ones who are included in the conversations before business-led IT. They are gaining better business wins and also reducing the risk of data breaches and cyber risk generally.”
Harvey Nash’s own CIO Survey demonstrates the scale of the trend. Fifty per cent of Australian CIOs report that at least ten per cent of the IT budget is being spent outside of the technology department.