One simple and obvious fact is that the role of ICT in all organisations, as well as in personal and social life, has extended comprehensively throughout life and work. Adding a C for communications to the traditional information technology, itself a successor to ‘computing’, in itself helps to illustrate the permeation of those technologies into the fabric of business and society. In that context, the role of ICT in business has extended beyond its origins in simple mechanical efficiency to being the platform on which not only the operations but the strategy and growth of the organisation depend totally.
Despite all of this, there is a suspicion (and not just among the specialist ICT community) that those who understand and lead the technology functions in business are not being heard at strategic planning and board level. A study published last year by the Economist Intelligence Unit looked at a wide range of industries in the EMEA region (principally in Europe) and the “Evolving Relationship between the CIO and the Board.” Several interesting and not very consistent results emerged. On the one hand, the role of ICT alongside Finance in assessing and measuring risk and ensuring regulatory compliance is fully recognised. On the other hand, over 70% of CFOs believed that ICT is primarily responsible for systems and network security and see it as a business support function. Add to that the fact that in over a fifth or the organisations the CFO represents ICT at the board and it is clear where a traditional line of reporting might leave ICT in that non-strategic support cost role.
A voice or seat?
Yet 47% of CIOs speak for ICT issues at board level discussion, while in 45% of organisations, it is the CEO who represents ICT at that level. This is very much in line with what our Irish interviewees report, all of whom believe they get a fair hearing at strategic level when they present a valid business and technology case. They are also quite happy to accept that they have a key cost-cutting role, both in their own ICT function budgets and across the activities of the organisation.
A more recent November survey by London-headquartered CIO-Connect, a professional membership and development organisation for CIOs (with a branch in Ireland), paints a more encouraging picture in its examination of the attitudes and attributes of successful CIOs. One in five CIOs now operate at board level, over 40% report directly to the CEO while 80% of CIOs sit on one of their organisation’s principal executive or operating committees. This is ‘C-suite’ level, with the CEO leading the team of COO, CFO, CMO (marketing) and similar heads of key functions such as Production and HR. This is the level at which CIOs report they spend at least 17% of their working time. Interestingly, they report that over half of that time is spent on issues of business strategy and transformational change proposals. Around 40% of the time is taken up by issues of business profitability and project briefings and programme status updates.
CIO-Connect CEO Nick Kirkland happily accepts that is not essential that CIOs be on their company boards. “There are certainly organisations where it may not be necessary, even from a CIO point of view. But there are others where the ICT is effectively the factory, the core operation or at least the platform on which all business activity runs. In financial services today, for example, ICT is simply the engine without which nothing can run.”
In general, Kirkland reckons, there are many situations where the style and individual personality of the CIO are the factors that lead to an invitation to contribute to or even sit on the board. “In that light, a successful CIO behaves as and is acknowledged as a business leader, ‘one of us’, whose specialism happens to be ICT. Like other professionals who have developed into leaders, they demonstrate that they can leave aside their technology background and contribute objectively to whole-enterprise strategy and decision making.”
At this level, Kirkland believes, CIOs exert their influence principally by alliances with their senior colleagues, heads of functions and departments and perhaps regions, because they consistently demonstrate understanding of their business priorities and the willingness and ability to find effective ICT solutions. “They must also show that their own ICT operations are lean, cost-effective and flexible. On that basis, the CIO can begin to talk about and explain ‘where we might go next’ in terms of ICT to enable and support business development or cost cutting or whatever the pressing issues are.”
Change and transformation
In today’s climate all CIOs have to be very conscious that their projects have to match agreed business objectives and be delivered in ‘chunks’. Speedy, short term results are what make friends and influence people on a day to day basis. That is what gives a platform for the more ambitious or longer term ICT proposals. “A high proportion of CIOs see change management in their organisation as a key component of their responsibility,” Kirkland adds. “That will certainly apply through 2009 and further, because all of them are seeing an increased focus on business processes and process efficiency. That must be achieved, of course, in the context of cost containment yet greater value for the organisation.”
Coming back to basic principles, as she likes to do, Brona Kernan insists that the role of ICT is always to contribute to or implement the strategic direction of the organisation, whatever it is. As the newly appointed CIO of The Irish Times, Brona Kernan brings with her the experience of three years in CPL plc and prior to that her 12 years as CIO of Ryanair. She held that role during its huge growth period since the early 90s and through the introduction of web booking.
In the early days of IT in business it was a new, technical and opaque department as far as the line of business people were concerned. “Since then, ICT has flowed like water throughout the entire organisation and filtered through to every single area of activity. It has long become the basis of production in every business, whether in fact that is goods or services or airline flight tickets. Communications with other departments and responsibilities has long since become a two-way street, sometimes awkwardly or even painfully. IT people were not always good on the internal communication front.”
The role of the CIO has evolved, she believes, because the leadership in modern organisations understands the key importance of ICT and the necessity to bring it into the strategic planning processes. “Managements have also seen a lot of money burned in bad ICT investments and realised that not all of the waste was due to bad implementation or overruns. Much of it was clearly because projects were out of line with the business objectives they were supposed to serve.”
Today, it all comes down to fitting the ICT investment and planning to the business strategy and ensuring that there is a clear business case for every phase of every project. “To get it over the line you have to make that business case and prove the costs are appropriate and that the return will be achieved in the agreed areas, whether cost savings or efficiencies or new activities.”
Strategy insight
Whether the CIO has a board set or not is not really a big issue, she believes. “You certainly have to have the insight into corporate strategy, but most CEOs today brief their senior management team clearly on strategic matters. They also tend to understand at least broadly where strategic decisions could have an impact on ICT or in fact depend on the enterprise systems to achieve.” If there are ideas and proposals coming from ICT, as of course there should be, Kernan reckons that so long as that channel upwards is working well the ideas will feed back into corporate planning. “It is all about alignment and communications, which is easy enough to state but depends on pro-active communications and good relationships.”
In the last decade, Kernan points out, ICT has made huge and successful contributions to business and other organisations. “They have become much, much more productive, use of the Web has completely transformed customer and collaborative relationships, mobility has given enormous flexibility to the organisation and its staff. Competitiveness has been built in most cases on or with the essential support of technology. I think board level leaders in fact understand that very well, just as CIOs and ICT leaders also understand the need to make a convincing business case for every project. Even something like virtualisation, which might seem to be largely a technology choice, is really a business decision.”
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