Many executives expect IT will play a growing role in driving business results, according to a new survey. For that to happen, CIOs must broaden their profiles and prove IT’s effectiveness in areas such as digital and innovation. McKinsey.
With the rise of the Internet, small firms are now more easily able to compete with the large companies due to the lower cost of entry into a particular market. To be competitive, however, requires more than just an entry into the market, it requires a differentiator, something that makes you stand out from your competitors. It requires … innovation. (Yup, just can’t seem to leave the topic alone.)
Executives are looking for IT to help them be competitive, to help them innovate. This is different than normal in that previously IT was always thought to enable specific business processes, to take something that is already being done and automate it, make it better, create an improved version of the original process. But that thinking is disappearing into the darkness to be replaced by innovation, linking together disparate processes into a cohesive whole, to digitize and revitalize the business.
Those are heavy demands. And how is IT supposed to do this?
The CIO, as head of IT, is the focal point where this new vision takes shape. We’ve talked for years about how IT and the business have to work together, but it’s more than that, it’s how IT, in the form of the CIO, helps the organization shape its overall business strategy. Digitization is part of that strategy but how and what to digitize are still unknown and that is where the CIO can help. By better understanding the business, by understanding the directions that business wants to take and by helping set that vision, an organization is better positioned for success.
The CIO has an important job. For most businesses that job is singularly focused. For instance, the CIO at UPS needs to focus on what UPS does: deliver packages. The CIO at Molson Canada needs to focus on what Molson does: manufacture and distribute alcoholic beverages. The CIO at CIBC needs to focus on what the CIBC does: banking and insurance. The CIO at Bell needs to focus on what Bell does: wireless, and internet, and media, and home phone service.
Must get tough to be a business partner with a myriad of different businesses. Forces the CIO to lose concentration and as a result probably impacts the ability of the organization to respond to competition, to be innovative.
Therein lies the challenge. At what point does adding business units to the CIO’s responsibilities decrease the effectiveness of the CIO?