Boardroom IT Clinic
Boardroom IT Clinic is a column in the
Financial Times Digital Business supplement, which focuses on addressing IT
issues faced by business leaders. This short article, written by Auridian’s MD
and founder, Ade
McCormack, appeared in a recent edition.
"Should
I really leave IT Leadership to the CIO?”
This question may sound like an implied criticism of the
CIO’s ability to manage his own department and link the output to business
value. No doubt some board members will mean exactly that, given their concerns
over whether CIOs have what it takes to sit on the board. But even this
interpretation suggests a naiveté as to the role IT plays in business.
Whether the boardroom likes it or not, in most cases IT is
critical to business performance. Few (impressive) companies use Rolodex cards
for their customer database or mechanical tabulators for payroll processing.
Whilst IT value measurement techniques to this day are embryonic, there is no
question that IT can play a critical role in operational efficiency, the
customer experience, brand protection and corporate governance. So should the
CIO take exclusive responsibility for all of these?
Expecting IT to take responsibility for these critical areas
of the business is akin to making your national postal service responsible for
the success of your direct mail campaign. Most people would suggest that the
responsibility lies with the Marketing Director. There are of course circumstances
when the postal service is to blame, but these are a small subset of the
complete panoply of excuses.
Similarly the IT department cannot solely shoulder the blame
every time there is a cyber security breach, drop in sales or financial
accounting scandal. CRM systems are a high profile example of ‘when IT goes
bad’. Many CRM systems lie abandoned. Some were poorly built, but most were
not. More likely the system was not aligned to the associated business
processes or to the culture of the users. Clearly the IT department must take
this into account and share some of the responsibility. Ultimately however it
is a failing of the sales function.
This prompts the question of IT leadership. Who should make
the final decision in respect of IT investment? My view is that every
functional head must be an IT leader. In fact the CIO should be stripped of
their budget. Their funding must come from their internal customers. Any
project the IT department embarks upon will clearly need a business owner, the
paying client, who will no doubt have a compelling business case for investing
in IT. The IT department being more customer facing will focus less on what the
client actually asks for, and more on whether it will be fit for the business
purpose the departmental head has in mind (but cannot necessarily articulate).
Part of the service will be to share responsibility for business and people
alignment with the technology delivered.
The natural extension of this line of thinking is that the
boardroom must take responsibility for IT leadership. It is no longer
acceptable to abdicate IT leadership to the IT department. CIOs may feel relief
and disappointment in equal measures at this suggestion.
The downside is that the CIO loses control of his budget and
has to operate on an ‘eat what he kills’ basis. The upside is that the decision
to cut IT spending in a downturn will be dictated by departmental heads rather
than just the CFO, who through lack of value visibility typically decides to
‘flat line’ IT spend. Presuming the IT department is delivering real value to
the business, the departmental heads, faced with the need to cut costs, may
choose to reduce their spend in other parts of their budget. This approach will
make the IT department more of a partner to the business, and less exposed to
market volatility.
Ade McCormack
ade@auridian.com
