CIOs: Stop Talking Jargon - Start Talking Solutions

Saturday, January 01, 2011

Rahul Neel Mani


CIOs need to stop talking jargon to their business colleagues, says Harvey Koeppel, Executive Director, Center for CIO Leadership. Have conversations around the business benefits behind that jargon and you will immediately get active support right up to the CEO.

Q:From MIS/ERP/Data Center head to vital contributor to the business, how has CIO's role evolved?

A: From someone who ensured that systems and applications were up and running – an order taker for what business colleagues wanted – to a frontline technology expert who can talk the language of business, the CIO has come a long way in the 25 years since the role first emerged.

This also means the CIO, instead of looking at what has already happened, is increasingly focusing on what is likely to happen, the MIS is making way for business intelligence.

The role of the CIO had evolved from operations manager to internal consultant. The order taker on what business required from systems and applications has evolved into a 'chief innovation officer' – an enterprise leader who knows how to leverage information technology to drive top-line revenue and create sustainable business value.

The new business-savvy CIO has become a full c-suite partner, helps create and drive business strategy, leads innovation and knows how to acquire, develop and retain high-performance teams who are globally de-centralized and virtually connected on-demand. There has never been a more exciting time or a better opportunity to be a CIO.

Q:CEOs want the CIOs to look outside the company walls to find new business opportunities. Is this demand justified?

A: Most CEOs recognize that modern innovation is not about delivering better widgets but rather about evolving global business models – being more competitive by focusing their time, attention and energies upon sourcing customers, staff, and supply chain resources where ever in the world makes economic and good business sense.

A major trend in today's enterprises into this 'new normal' involves leveraging collaborative partnerships with third parties (as opposed to outsourcing) which allow the enterprise to focus upon those core competencies that differentiate it in their chosen market and create a "value web" of external partners who can deliver, where appropriate, quality non-differentiated (commodity) services and related resources at a significantly reduced cost and time frame without impacting externally facing customer relationships.

CEOs are keenly aware that CIOs are uniquely qualified to drive these business models and supporting business process innovations and lead business change because CIOs are often the only functional executives who have an end-to-end view of the complete business processes that they support.

CIOs also bring a highly disciplined framework and the necessary experience with managing complex re-engineering projects to support these changes to the fundamental operation of the business.

Based upon the research that we have performed at the Center for CIO Leadership, acquiring and building the skills required to develop effective relationships with external parties (including customers) is an area where many CIOs report meaningful opportunities and challenges.

That said, business-savvy CIOs are more and more becoming drivers of this new form of business innovation leaders of business change.

Q: What did you do to be seen as a serious contributor to business growth and corporate strategy?

A: I believe that the infection point for me in my own career came when I learned how to speak the language of my business partners. For example, I learned how to talk to the marketing and sales teams about new customer acquisition, cross-sell and up-sell, and needs-based sales approaches to relationship management.

The conversation was no longer about customer MIS reports or selecting the best CRM system. I learned how to talk to the CFO about our balance sheet, cash flow and earnings.

The conversation was no longer only about streamlining the financial management system so that we could close in 5 business days instead of 3 weeks after month-end.

I learned how to talk to our CEO about what business initiatives would positively impact the stock price, how to create sustainable shareholder value and how to ensure the safety and soundness of our operating environment, partner with our regulators and still reduce our technology and operations budget year over year.

I knew that I had become a serious contributor to the business when I was invited to actively participate in the formulation of our business strategy because my c-suite peers acknowledged and respected my contributions, not just because I had a "C" in my title.

Q:What does it mean for a CIO to be strategic? Does he need to think like a CEO or a CFO or what?

A: Here are some of the more popular uses of the term. Some would say that dealing with the day-to-day running of the IT and operations functions would be 'tactical' as compared with the CIO's involvement in enterprise-level initiatives that materially impact the broader base of stakeholders (customers, staff, shareholders, citizenry, business partners), which would be considered 'strategic.'

This definition would be closely associated with the notion that CIOs need to think like CEOs, CFOs and other c-suite partners since they are the executive management team who, by definition, must have an enterprise-wide view on most everything that they do.

Another perspective of how CIOs can be considered strategic would be differentiating between those activities or initiatives that are in support of the enterprise's vision or mission, i.e. longer term goals and objectives or 'roadmap,' as opposed to those programs or projects which are short-term tactical  activities generally associated with keeping the lights on and running an efficient shop.

This distinction is often characterized by explicit budget allocation to new development or significant enhancement efforts (discretionary spending) versus allocations required to support the maintenance of the business-as-usual (non-discretionary spending) activities, for example, bug-fixes, minor enhancements, regulatory or compliance driven enhancements, operational or data centre consolidations and so on.

Another way to characterize the difference would be a skills-based view, where strategic CIOs are proficient and innovating and exploiting IT to support new business models, enter new markets, radically streamline processes, etc., while tactical CIOs are much more proficient at ensuring that the day-to-day operations are run smoothly and cost-effectively.

Research done by the Center in collaboration with IBM suggests that business-savvy CIOs need to be both strategic and tactical depending on the needs of the enterprise as driven by their mission, goals and objectives, industry outlook, competitive position, economic conditions.

There are clearly times when CIOs must step into leadership roles to move their enterprise forward and there are other times when CIOs must focus on ensuring the safety and soundness of their IT and operations to provide a solid foundation for future business growth.

Q:A CIO's thought leadership on business technology will only work if the business colleagues are receptive to those ideas. How do they work together?

A: The best way for CIOs to ensure that business leaders are open to their ideas on how technology can best support their business is to ensure that ideas are geared towards enabling tangible and measurable business benefit and that their ideas are communicated in business terms that their c-suite and other business partners can understand.

For example, if a CIO attempts to talk to a CMO (Chief Marketing Officer) about a new approach to data extract transformation and load (ETL) or the latest technologies to enable better data warehouses using a service oriented architecture (SOA) the conversation will likely be a very short one with less than satisfying results for both parties.

If, however, the CIO can explain how their idea for a new business initiative can reduce the cost of acquiring new customers from $1,200 to $500, can increase existing customer retention from 70 percent to 85 percent, can increase the average number of products per customer from 1.5 to 2.5, and that all of those benefits taken collectively can result in an increase in annual revenue by 13 percent while increasing annual earnings by 15 percent, the CMO be interested and engaged, and the CEO, CFO and the rest of the c-suite will be very interested in how to fund the effort.

Cross-posted from CTO Forum

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