PAVING
THE WAY FOR THE IT EXECUTIVES OF TOMORROW
By Dave West, IBM Rational Software
When it comes
time for businesses to make IT investments, the CIO is the person
in charge, calling the shots and making the big choices. In many
organizations, CIOs drive IT spending, make decisions about infrastructure
and basically manage the wires and boxes that bring information
into and out of an enterprise. As IT continues to evolve and companies
increasingly rely on technology for business success, some questions
emerge: Should leadership structures change as well? How are CIOs
or senior IT managers measured? Where do they develop their skills?
And how do they do their jobs?
How to Measure a CIO's Success
The systems that run a business are continuously providing
new opportunities, such as taking advantage of new markets and
channels or controlling and managing inventory more effectively.
Many information-rich organizations, such as banks and insurance
companies, view their IT operations in terms of their ability
to impact finance. At the same time, many organizations evaluate
their CIO according to two rudimentary measurements: cost and
service level. But it is increasingly hard to enable innovation
when so much of the focus from the executive suite is on cost.
To be most effective, CIOs must be allowed a broader role in managing
the intersections of organizational culture with IT investment.
A recent opinion piece by Meta Group Inc. analyst Jonathan Poe
("Value
Performance: Achieving Consistent Communication") suggests
that IT managers should be measured according to four objectives:
1. Create an IT culture of value management. This helps managers
understand, assess and estimate the value of the systems and capabilities
being delivered.
2. Master IT portfolio management. This requires managing the
portfolio of IT assets in the context of the business and making
the right investment decisions.
3. Increase employee productivity. This facilitates development
organization productivity, which includes decisions on sourcing
and architecture.
4. Refine core IT processes so they become understandable, consistent
and scalable. This requires focusing on the systems development
business process.
I would add a fifth objective regarding the collaboration of IT
with the business:
5. Enable better business through IT. If managers can truly enable
the relationship between IT and the business, then business innovation
through IT becomes possible.
Where Do CIOs Develop Their Skills?
According to a survey from Computer Sciences Corp. and Financial
Executives International titled "2003 Annual Report of Technology
Issues for Financial Executives," two-thirds of senior IT
executives are recruited from outside the organization. These
new senior managers typically come from a number of different
types of companies, including consulting practices and IT firms,
as well as competitors. Most CIOs possess an IT or operational
specialty, which means they tend to tackle business problems with
IT know-how. This also reinforces the notion that CIOs need to
be technically savvy rather than just good executives. In a recent
survey by CIO magazine titled "The State of the CIO,"
82% of respondents cited IT as the most important discipline that
influenced their career paths.
But consider how this trend may be changing.
The Next Generation of CIOs
There is no single how-to handbook that I know of for the
CIO. In fact, you will be hard-pressed to even find guidance for
the role, although there are a number of CIO associations that
provide local support networks. Technology and management MBA
programs offer budding CIOs the best path for success. One of
the strongest MBA programs I know of includes courses ranging
from economic analysis for business decisions to communications
and finance. The goal is to develop good organizational strategy
and management practices rather than simply focus on the technology.
In fact, this program offers no core courses on using IT as an
effective channel for a business or for dealing with IT infrastructure
consolidation. The assumption is that executives who already have
an aptitude for IT will employ their technical skills more creatively
once they master business and management techniques.
The New CIO Profile
As IT becomes more important to organizations, it's clear
that the role of the CIO will also increase in importance. IT
systems enable organizations to do things faster and cheaper,
but these systems are becoming more complex, harder to control
and present greater business vulnerabilities. Considering the
five key objectives described previously, we can create a new
set of key skills required for the modern CIO.
· Value management. CIOs need to be better able
to measure the costs and benefits they derive from the business
processes they implement. This requires a more business-oriented
approach to metrics inside the IT systems running the business.
· Portfolio management. To be effective in portfolio
management requires a good understanding of what the portfolio
is. CIOs will have to introduce better ways of understanding the
assets that comprise their systems and the resources that exploit
them. This management requires a greater discipline to be exerted
on the IT processes.
· Productivity. CIOs need to be better equipped
to make sourcing decisions on their systems in terms of development
and operations. This requires better systems, better development
processes and an improved sense of what is -- and what is not
-- essential to the organization. Improving productivity while
ensuring effective management of operational risk will be a key
competency for the CIO of the future.
· IT processes. Future CIOs need the ability to
retool their organizations, putting in place reliable measurements
of process effectiveness while implementing programs of change.
· Business and IT. Too often, the relationship between
IT and business is haphazard, with IT playing second fiddle at
best in business planning cycles. Future CIOs need to better position
IT in their organizations, enabling IT and the business to better
work together to enable innovation and improve operational performance.
The CIOs of the future will certainly embrace more exciting and
challenging business dimensions than their predecessors. While
IT competency may still be a CIO's most important skill, technical
aptitude will have to be coupled with strong business acumen to
take full advantage of the position and its elevated influence
within an organization. By taking this approach, the new generation
of CIOs will have the ability to move the process of systems development
out of the IT silo and spread it throughout the organization,
thereby increasing the probability of sustained success.
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Dave
West is a Group Manager at IBM Rational Software. At Rational,
Dave has held a number of positions including technical engagement
manager and product manager responsible for the Rational Unified
Process product. Dave has worked as a consultant in many large
organizations and programs providing practical support in
the areas of project management, software architecture, and
systems design. In his current role, Dave is responsible for
industry solutions development within the Rational brand and
works on a number of product strategy groups. For more information
about this article , please contact Dave West at westda@us.ibm.com |
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