It’s generally assumed that leveraging IT to help drive business success is a shared objective among CIOs and business executives. Assuming that it’s actually occurring. Well, not so much. Both camps are contributing to the large gap that exists between good intentions and decisive action, according to a recent Gartner report, “Enterprise IT Maturity, 2014: CIOs Are Seen but Not Heard”, published August 25, 2014 (G00265684).
The observation that CIOs need to lift themselves up from functional IT responsibilities to strategic business contributions to be truly effective is not new. What is surprising is how little progress they’ve made over the past three years or so that Gartner has been gathering and analyzing pertinent data.
Executive management shares some of that responsibility. In the area of business performance management, they have failed to make the advances needed to strategically leverage IT, creating an environment that is detrimental to IT organizational performance and CIO improvement efforts, according to the findings:
“The single biggest obstacle to enhancing the derived business benefit from IT investments and capabilities is a lack of leadership and managerial discipline around enterprise performance management. This is a systemic problem, in which IT’s weakness simply mirrors that at the broader, enterprise level. While the lack of a performance-minded culture within enterprises is clearly impeding CIOs’ ability to drive improvement and change, CIOs would find that path considerably smoother if they were able to demonstrate basic business, financial and performance management competencies themselves.”
Statistically, there has been no change in either business or IT leader maturity since 2011, leaving both sides wanting more but unable to bring about change. As the report title implies, CIOs have made some progress penetrating the inner circle of executive management, but their ability to influence leadership and “be heard” is weak. Further, CIOs progress in becoming business savvy and running IT operations as a real business were found to be shallow. Consequently, their contribution to the business is largely one of support, cost containment and functional excellence, but not strategic value.
The in-depth report covers multiple dimensions of this conundrum, well beyond our ability to adequately explore here. One observation that did stand out for us, however, was the topics that senior business executives and CIOs focus on when they actually do interact; it says a lot about why nearly two-thirds of all IT workloads still reside in corporate data centers. It’s also an indicator as to why CIOs generally lack business credibility.
Eighty four percent of CIO respondents say that discussions involving outsourcing occur sometimes (39 percent), rarely or never (45 percent) with business leadership. Discussions around leveraging IT for competitive advantage or market disruption also come up well short against issues of cost management, service quality and contribution to business operations … strategic vs. functional.
By continuing to saddle themselves with the many functional aspects of IT instead of outsourcing, CIOs continue to cast themselves in that operational light. Whereas, building the business case for outsourcing would demonstrate financial and business management acumen. Successfully arguing their case would relieve them of that day-to-day routine to focus on engaging with business counterparts, fostering IT innovation, and aligning with corporate strategic initiatives.
CIOs — Would you survive a company merger or acquisition?
At the risk of being overly simplistic, this seems to be an opportune issue to address and narrow the apparent gap between aspiration and frustration on both sides. The role of IT services broker fosters discussion between business and the CIO, enhances the CIO’s appreciation of business objectives and strengthens the perception (and the reality) of the CIO’s role as a business driver as opposed to a cost-center manager.