Room at the top

More often than not, IT is viewed as a bad news department. It is not surprising, then, that the number one business priority for blue-chip chief information officers (CIOs) is marketing IT within their own companies, according to Forrester Research.

In a recent customer focus group, Forrester found that CIOs requested research on how to market themselves internally above all other issues, including major concerns such as security and storage.

The perception of CIOs, meanwhile, is still that of technology professionals. A recent report by Forrester found that 61 per cent of CIOs have a technical background. It also found that CIOs spend just 38 per cent of their time on business issues.

With a limited amount of technology leaders’ time spent on the business of IT, the marketing of the department’s skills is in danger of being under-represented.

Better internal marketing, a technology board position and more business-focused IT leaders are solutions proffered by some as an antidote to the technology department’s negative public image.

Forrester chairman George Colony believes companies should consider making their chief technology role a board position. He predicts that 80 per cent of medium-to-large blue-chip companies will have an IT board position in 10 years.

‘CIOs have historically operated under a veil of secrecy,’ he says. ‘More transparency will lead to a better understanding of what IT can do for the business.’

Good communication channels and more openness will help improve perception of technology departments, says Clive Whincup, divisional CIO at Lloyds TSB. ‘With IT, people only hear about the problems,’ he says.

Whincup says the onus is on technology directors to push success stories that would otherwise remain untold.

Lloyds TSB divisional CIO is not a board member. Whincup says the business benefits of having a CIO on the board would be better dialogue, communication flow and understanding of IT issues.

Improved interaction is critical, and Forrester senior analyst Peter O’Neill says that being considered equals within the company is a priority for technology leaders. He estimates that 15 per cent of UK companies have CIOs on their board.

O’Neill says the line between business and IT is blurring, so that IT will no longer be seen as a separate segment. ‘In 10 years, they won’t even be called CIOs,’ he says.

O’Neill predicts that the operations and maintenance core function of IT will be outsourced and IT departments will be focused solely on innovation. ‘It should be called business technology instead of IT, and the CIO should be the chief technology officer (CTO),’ he says.

Understanding the language of business is the main challenge for CIOs, and O’Neill recommends training IT people to talk about success in business terms. ‘IT-centric numbers mean nothing in business language. CIOs need to use different metrics to communicate effectively,’ he says.

IT departments can change perceptions via IT marketing projects, holding focus groups, presenting schedules, demonstrating cost savings, testing projects before they are made company-wide, and delivering regular status reports, says O’Neill.

He believes that the most basic hurdle to CIO success is reluctance to move towards a culture change in which users are seen as customers – and IT is viewed as innovation. ‘IT people still refer to problems as user misunderstanding,’ he says.

O’Neill says culture change starts with organisational change, and that CIOs should set up different streams of IT support along specific business lines.

Such an approach is favoured by Fotis Karonis, director of IT at Athens International Airport, who says CIOs need to communicate complex issues simply.

He recruits technical staff with good communication skills and sees modern IT departments as cross-functional.

Karonis says the technical side of IT will become a back office issue and IT departments should convert into business units. ‘There is no such thing as pure IT – everything has an element of IT in it,’ he says.

Not everyone, however, wants to gatecrash the existing business set-up. BT’s CIO, Al-Noor Ramji, does not want to be a board member. He has the full support of his board, which he sees as more important than an actual board position.

Historically, BT’s CIO has been a deputy chairman position. Ramji says the role of CIO does merit a board position – he just does not want one.

Ramji says the issue depends on each individual CIO. ‘Personally, I don’t want to do anything but IT,’ he says.

Ramji may be focused on IT, but he does not believe his IT structure lacks good communications channels. He meets once a month with chief executives of each business line to evaluate progress, and runs a quarterly business unit review called Promises Made, Promises Kept.

Ramji ensures that all projects are made public on a calendar of commitment, which is also published on the web. The company’s internal marketing also includes a monthly newsletter, In Partnership, which keeps employees up to date about IT projects within the company.

The fact that Ramji is not a board member does not affect communication between himself and his chairman. He meets with the chairman whenever he needs to, as well as at all IT board meetings.

Ramji reports to members of the operating committee on a rotational basis, and has the opportunity to familiarise himself with other board members.

Given the potential business positives and negatives, there are arguments for and against whether technology merits a board position, says Phil Stunt, chief information officer at CA.

‘Whenever you get a bunch of CIOs together, there are invariably the same few debates: Why is IT still viewed as a cost centre? How do you reposition IT within the organisation? How can I get on the board? Can a CIO ever become a chief executive?’ says Stunt.

He says technologists have traditionally reported to the chief financial officer (CFO), and such a line of management helps explain why IT is viewed as a cost centre because, by nature, the CFO is trying to get more out of the IT spend.

‘The perception of IT as a cost centre and the way in which its value is measured may be why IT is rarely represented on the board,’ says Stunt.

Stunt says it is becoming more common for CIOs to have business backgrounds, though there are traditionally still technologists who come up through the ranks.

‘As IT becomes more of an on-demand and service-oriented type of business, CIOs become transformation leaders and strategic advisers to the CEO about how technology can improve, influence and drive his business forward.’

Stunt also sees growing divergence between the CIO role and CTO function. ‘A CTO role requires someone with technology understanding; the CIO is the strategic adviser who can measure how that technology is driving growth,’ he says.

‘More and more companies have both a CIO and CTO, and there are different opinions about who has seniority. It is definitely an emerging model, but I do not know if that is the way everyone will go.

‘For years we have talked about aligning IT investment with the business side. Unless they are equally credible in the technology and business field, then it is very difficult, but if they are credible on both sides they can command a board-level role.’

Stunt says the value of technology leadership depends on how CIOs and CTOs are measured. Metrics now measure how wisely IT leaders are spending their cash and if they are achieving market growth.

He says that unless you can show that the activities and the money you are spending have relevant organisational outcomes, all the discussions about aligning IT to the business become irrelevant.

Stunt says technology leaders are learning to undertake business impact analysis of different projects. And he is interested in learning whether or not such analysis helps to invest in new markets, subsequently growing the business.

‘The bowels of the data centre will always remain the domain of those special people who like that kind of thing, but what IT can bring to the business is much more than that, and it is starting to become much more visible,’ says Stunt.

‘And those of us who believe passionately that IT can be part of the transformation of a company are making sure it is visible because that is how we justify our existence; that is how we can justify our place at the head table.’

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Further reading:

IT profession makes headway