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3 Steps an IT manager Should Take to Earn Their Seat on the Board

CIO recently published their “State of the CIO” survey, and in an article titled CIOs Disconnected from Business Execs they identify conflicting priorities between CIOs and their fellow executives.

 

The article has many great examples of effective CIOs, including Jeff Hutchinson, who sits on the executive committee at Maple Foods and participates in planning, and Randy Witt of Restaurant Technologies, where IT is branching into revenue generation. The article also provides statistics showing that 57 percent of IT leaders say they are perceived as a “service provider or technology-only collaborator”, and 21 percent say that IT is “unappreciated and misunderstood as a cost center”. CIO also says “…fewer CIOs now report to the CEO, a metric typically used to estimate CIO influence”.

 

What CIO doesn’t do in this article is to provide guidance on what senior IT managers should do if they want to move from being an unappreciated and misunderstood provider of technology to being a true partner with the business. It’s easy to identify the problem, but it’s very hard to make the changes needed to improve the situation.

 

I have worked with many IT managers over the years, helping them to start making strategic improvements, and on two occasions this has resulted in the senior IT manager I have been working with being offered a seat on the board, reporting to the CEO. This didn’t happen because they were popular, or because someone liked them. It was because they had transformed IT from a cost center to a strategic business partner that helped create value for the business. It is not easy to do this, but the rewards are high and the initial steps are not too difficult, so don’t wait for next year’s CIO survey before you get started.

 

At HP, we use a very simple model to help our customers understand what is needed to create their own successful strategy.

 Service Strategy Pyramid

 

  • Agree on Outcomes. – At this first level you agree and document your vision and mission, what markets and customers you want to serve, and your overall objectives and critical success factors. The outcomes you define will probably be very high level, and they are not easy to turn into actions.  But, if you miss this step, you will find that people are constantly disagreeing about what they are trying to achieve; you will have poor alignment between IT and the business.

    Some internal service providers think that they don’t need to analyze their markets and customers. I have heard statements like “we only have one customer, so we don’t need to do this”. This is very short sighted. It is during this analysis that you start to understand what is distinctive and special about you, and what that means to your customer(s). If you don’t know why a customer should continue to buy services from you --  rather than from an alternative service provider -- then your customer certainly doesn’t either.
  • Define Services– This second step involves deciding what services you should be offering. To do this well, you must:
    • Ensure that you really understand what business outcomes are important to your customer(s), not in IT terms, but in terms of their business and their customers
    • Analyze your current service portfolio to understand how well it supports those outcomes
    • Understand how to make the best use of your existing assets
    • Decide what to do yourself and what to source from other service providers, and
    • Prioritize future investments in new or changed services.
    Many service providers start to analyze their service portfolio by listing all the services they provide, which results in an inward facing, IT-centric analysis of the portfolio. It is essential to start by analyzing customer outcomes; this provides the context for analyzing IT services and ensures that you retain a customer focus.
  • Develop or Source Capabilities – This third step includes understanding all the capabilities required to design, build and run the services in your portfolio, and then comparing this with your current capabilities, and deciding how to develop or source the capabilities you will need.

Your overall strategy must be linked to, and consistent with, your customer’s strategies. To achieve this, it is very important to start at the top of this hierarchy. There is no point in analyzing the capabilities needed to deliver the service portfolio if the portfolio itself does not effectively support customers. The service portfolio can’t be analyzed if the stakeholders haven’t agreed on the vision and mission or haven’t identified the customers and markets to be served.  Failure to perform sufficient “top-down” planning will result in optimization of the wrong services, failure to align what you do with what your customers need, and wasted investment.

 

Learn more about HP IT Service Management (ITSM) Services and how we can help you improve the effectiveness and efficiency of your IT operations.

 

For more info about me and what I can do for your organization, see my profile at our Technology Services Experts page.

 

Follow me on Twitter @StuartRance

Tags: CIO
Comments
Markus(anon) | ‎01-16-2012 12:58 PM

 

To earn a seat in a board you've to earn the respect and confidence of the employees, be able to motivate and to provide suitable working environments to them. Something that you can’t earn and must have is extraordinary engagement  together with a very bright brain and way of thinking.

Stuart_Rance | ‎01-16-2012 10:39 PM

Markus,

 

I agree with everything you say, but a  CIO that wants a seat on the board has to change IT from being a cost center to being part of how the organization creates value. Running an efficient, well motivated, IT organization that just provides services that have been requested by the business is not enough.

 

Joe Albano(anon) | ‎01-17-2012 11:51 PM

Markus raises an interesting and important point. I have spent a fair amount of my time investigating how employees relate to and engage in their work. From this research I can tell you that engaged employees experience work as being more intrinsically satisfying and are better able to adjust to the changing demands of an increasingly dynamic marketplace – thus creating more agile organizations.

 

A significant determinant of employee engagement is the employee’s perception of the meaningfulness of their work. Structuring IT’s relationship with the business so that it is focused on value creation and market innovation—rather than simply technology provision—is an important factor in moving IT higher on the value chain (greater meaning). Thus, becoming more relevant to the business is a great way for IT executives to support the goal of “earn(ing) the respect and confidence of the employees” – both in IT and in lines of business.

 

The distinction seems fairly basic, IT as a technology provider means that the value of IT is increased primarily through cost-cutting – this positions IT employees as an expense to be minimized and IT services as a commodity. IT as a business value-added business partner positions IT employees as investments to be optimized and IT services as competitive differentiators. This is the nature of IT transformation. It requires that IT not only change what it does, but also that IT leaders transform their thinking from mangers to executives.

Stuart_Rance | ‎01-18-2012 09:54 AM

Joe,

 

I really enjoyed reading your response to this post.

 

I do agree that a service provider that runs as a cost center is always going to be a target for cost cutting, and that this will have a huge impact on morale, especially when compared to a value creating organiztion with empowered staff who fully understand how they can contribute to business growth.

Antonio Bonafede(anon) | ‎01-18-2012 12:32 PM

This paper is aligned with ITIL V3 indicating as to which is to align the portfolio of services that customers require and the market, but the main issue is that the organization supports this view.

Stuart_Rance | ‎01-18-2012 03:47 PM

Antonio,

 

If the IT organization doesn't support the view that they should align their services with what their customers require then they are probably already in big trouble. This isn't about what version of ITIL they align with, it is about whether they create value or not.

 

Jill Houlding(anon) | ‎02-20-2012 03:49 PM

I agree with the objectives of thinking strategically but achieving this is far from simple.... it will typically take a considerable amount of time and effort to change thinking from IT as a technology provider to an organisation that actively supports business objectives. It will be important to change the view of not only senior management but also all the people who work in IT so they understand how they contribute to a business.

Stuart_Rance | ‎02-21-2012 09:40 AM

Jill,

 

Thanks for the feedback.

 

I do agree that it is not easy to get started. The hardest bit is the culture change, getting people to understand the importance of strategic planning, and thinking about IT in terms of how it creates value for the business, rather than always thinking about technology.

 

This is why I wrote a follow up to this blog, titled Prioritizing Time to Get Started on Strategic Planning.

 

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