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Updated: January 21, 2010 15:40 IST

Business performance is the language of IT value

D. Murali
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THE REAL BUSINESS OF IT.
(Recommended addition to the IT professionals’ shelf)
THE HINDU THE REAL BUSINESS OF IT. (Recommended addition to the IT professionals’ shelf)

There has never been a better time for a capable executive to take on the role of CIO (chief information officer), avers a new book from Harvard Business Press (www.harvardbusiness.org). “We would not be surprised to see executives on the CEO track make a point of adding the CIO role to their resumes, just as previous generations of executives sought stints in product management and marketing,” write Richard Hunter and George Westerman in ‘The Real Business of IT: How CIOs create and communicate value.’

The ‘CIO-plus’ phenomenon, as the authors call it, is due to the increasing importance of IT (information technology) to every business, and the growing capabilities and business acumen of the executives responsible for IT.

However, the CIO-plus role is the reward at the end of a long journey, they advise. A journey that begins with ‘years of remembering that it’s not about IT but about business performance, because business performance is the language of IT value.’

Establish value for money, show how IT is an investment in future business performance, implement the virtuous cycle, keep score – and watch what happens, instruct Hunter and Westerman. “By remembering that it’s all about the business, you inevitably bring favourable attention to yourself. If you show you can provide value, value will come back to you. And everyone will gain in the process.”

They see the CIO role as a potent launching pad, because CIOs know the plans, strategies, and capabilities of every business unit and are charged with automating and informing those strategies. “No one in the company, with the possible exception of the COO, knows more about how the company’s business processes work than the CIO. And the CIO usually owns the most capable project delivery teams in the enterprise.”

A section on ‘the extended CIO’ describes how the first foray of the CIO into non-IT roles may happen with designations such as ‘senior vice president and CIO’ and temporary assignments (e.g. merger integration). Roles like this can be a natural progression for IT executives who are comfortable speaking the language of business value, the authors encourage.

Chart your course, therefore, they urge. “Where you can go depends on what you enjoy, what you’re good at, what you can improve through new experiences, and what your company needs… Keep in mind that there are plenty of rewards and challenges available to successful CIOs, and plenty of opportunities to take on wider responsibilities in the business without changing jobs.”

An important lesson for CIOs is to show value for money, because that is the necessary starting point for recognition of the value IT contributes to the enterprise. Three essential steps to delivering value for money, as listed in the book are: One, measure and communicate IT’s performance in terms that are meaningful to the rest of the business. Two, benchmark IT’s performance against peers. And, three, provide data that will help the rest of the enterprise manage consumption of IT services.

The authors report that it takes most IT organisations six to twelve months to design and implement an effective business-oriented measurement and reporting programme – ‘one that shows how well IT is doing in delivering the right services, at the right level of quality, at the right price.’

Like money, people, or anything else of value, IT is a scarce resource, remind Hunter and Westerman. They reason that demonstrating value for money helps the CIO make the point that IT costs what it costs because a given level of service has a certain price, just as a Lexus sedan has a different price from a Subaru.

“Once the rest of the executive team understands that, there’s room for meaningful discussions about which services matter most, and why. It is the beginning of effective business involvement in IT decision making.”

Recommended addition to the IT professionals’ shelf.

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