The Society for Information Management (SIM), God bless their souls, recently announced the results of their annual survey of what Chief Information Officers (CIOs) believe are the most important issues they will face in 2016. IT’s getting a lot of attention – again.
I cannot stop myself from responding.
Here’s the list, my thoughts and recommendations.
- Technology Alignment with the Business
This has been a theme for decades! At least since I was a graduate student – decades and decades ago – “alignment” has been “required” of IT and the business. Yes, IT needs to understand what the business does, what the priorities are and who the key business stakeholders are. They also need to understand how profit margins are created across the business units. Finally, they need to help business units strategize about how operational, strategic and especially emerging technologies can help them succeed.
Anything new here?
- Security & Privacy
Here we go again. Security and privacy have been in the top ten for years. Who doesn’t believe that data must be secure and that privacy, especially in the age of social media, the sharing economy and digital payment systems, is important? Who? Who? Who doesn’t want to be secure? Who doesn’t want digital privacy? Is the objective more complicated than it was? Obviously it is, because transactions are increasingly digital, because cash is disappearing and because global transaction processing is pervasive and continuous. The real problem with security and privacy is not with CIOs and their business unit partners, but with CFO’s loathe to spend enough money to make data and transactions more secure.
Nothing new here either: security and privacy are still concerns and CFOs are always looking for ways to cut costs.
- Speed of IT Delivery and Time-to-Market
This is why God made cloud providers. Delivery speed has always been a concern. How many times have you heard: “why does it take so long to upgrade an application?” “It takes how long to replace our laptops?” “How could it possibly take years to install an ERP system and why does it cost so damn much?” Cloud delivery of infrastructure (IaaS) and applications (SaaS) – as well as support for the development of new applications (PaaS) – has dramatically shortened development and deployment lifecycles and reduced costs. While there will always be complaints about speed and cost, the cloud has taken much of the pressure off IT professionals and their business unit partners.
Even CFOs like clouds.
Old news: cloud computing has been around for a long time and everyone wants things to go faster, cheaper and better.
If you ask a CIO – any CIO – if he or she wants to innovate – every one of them on planet Earth will say “yes.” “Hell, yes,” most of them will say. Remember, they are required to say “yes.” But most of them usually fail when they try to innovate. So why do we ask them year after year if innovation is important? Of course it is – and always will be. They just don’t know how to do it. They don’t have the ideas, the money, the teams or the time.
What else is new?
- Business Productivity & Efficiency
Who doesn’t want to be more productive and efficient? Some of these rankings remind me of management gurus who say things like “you need to hire the right people.” But how many CIOs understand the business models and process they support with technology well enough to improve them? Not many. I see why they might list business productivity and efficiency as concerns. I would too if I wasn’t sure how to proceed.
Same old, same old.
- IT Value Proposition to the Business
Number 1 – “Technology Alignment with the Business” – is directly related to concerns about the “IT Value Proposition to the Business.” In fact, they are the same: alignment = value. The truth about successful alignment and compelling IT value propositions is credibility built over time with knowledge, proof, trust and solid communications skills – all wrapped in the language of business.
- IT Agility & Flexibility
The good news here is that technology has gotten cheaper and easier to deploy. We can thank God again for cloud providers. If a company buys, installs and supports a monster enterprise application, it’s almost impossible for it to pivot away from that platform even if the market changes or their competitors pivot toward a new business model. Agility and flexibility begins and ends with cloud delivery and intelligent outsourcing. Large CAPEX technology investments no longer make any sense – and here CFOs are likely to agree. Carefully managed OPEX technology expenditures enable agility and flexibility. Massive CAPEX technology investments prevent agility and flexibility.
How long has this been a secret?
- IT Cost Reduction & Controls
The cloud strikes again. OPEX rules. Fortunately, the technology industry is providing increasingly cost-effective methods, tools and techniques. Devices, applications and storage have gotten cheaper. Consumerization is driving corporate technology costs down. The globalization of technology resources is driving technology costs down. All CIOs should know this and focus on technology cost optimization. Even controls have become cheaper, automated and therefore more diagnostic. (On the other hand, if “controls” refer to rates of spending, then CIOs should focus on “‘Shadow IT’ spending management,” which requires a different set of management best practices, governance policies and personal communications skills – the same Shadow IT challenges that have plagued CIOs for decades.)
In many empirical respects, CIOs have it easier today than ever before. I have no idea why they are so concerned about “IT Cost Reduction & Controls,” except perhaps that they expect to fight their CFOs about the cost of IT, regardless of how relatively “cheap” IT has actually become.
- Business Agility & Flexibility
CIOs should be concerned about “Business Agility & Flexibility” because when their business clients pivot to new business processes and whole new business models, they must be ready to immediately enable and support them – without the usual screaming about how hard it is change anything. They are also concerned because most of them have no idea what the business strategists in their company and industries will require in a month, let alone a year.
Yes, they should be concerned about this – but – once again – this is not new: businesses have been pivoting for hundreds of years, and they expect their entire support teams (including IT) to enable their pivots.
10. Business Cost Reduction & Controls
CIOs should always stand ready to help their internal clients reduce costs.
Is this new?
Obviously the above list largely consists of oldies but goodies.
But how about if we look forward?
Here are some ideas to ease CIO concerns (while making some of them crazy):
Technology Alignment with the Business
- The only way to align technology with the business is to change the organizational and reporting relationships between the two worlds.
- The whole idea of “technology departments” with their own “chiefs” and “teams” is a remnant from the 20th century. Today – and forever – there is no business without technology and no technology without business: they should be integrated!
- Alignment will only happen when technologists and business professionals live in the same house and focus on the same goals.
- This means that “IT” needs to disappear and re-emerge within business units. IT plumbing – networks, email, security, storage, etc. – should all move to Audit.
Security & Privacy
- Security spending should move to Audit, ultimately managed by the CFO.
- Audit should demand additional, continuous spending for security at all operational and strategic levels.
- Boards of Directors should make digital security a priority (right alongside earnings) – or suffer the consequences.
- Accountability for security breaches should shift to the Board of Directors, Audit and the CFO.
- Privacy will remain a double-edged sword indefinitely for eCommerce companies like Uber and any location-based services companies that request permission to know where their customers are. The data collected from these op-in business models is where privacy issues (beyond pure data breaches) will be debated and collide with efforts to make everything more secure.
Speed of IT Delivery & Time-to-Market
- Never, ever buy, install and support technology in-house. The violation of this principle puts companies in the concrete anchor manufacturing business.
- Exploit cloud efficiencies across the board.
- Since the innovation track record within companies is so poor, outsource innovation to a team of visionaries, consultants, professional prototypers, start-ups and some in-house subject matter experts. But the lead innovators should come from the outside.
- Move innovation into the businesses.
- Close innovation outposts: bring the “Innovation Labs” back to the ranch and let the new business technology innovation teams manage innovation.
- Fund innovation aggressively but accountably – like any business initiative driven by TCO and ROI.
Business Productivity & Efficiency
- The new business technology teams, working within the business units, should map and assess all business processes and the overall business model continuously and with explicit reference to domestic and global competitors.
- Teams comprised of internal and external stakeholders should be created to identify the processes and models most in need of change and the processes and models that will yield the greatest post-change returns.
IT Value Proposition to the Business
- See above.
IT Agility & Flexibility
- Avoid CAPEX: OPEX is the way to go in the 21st century.
- Exploit cloud delivery, BUT be sure to invest (via “container” and other technologies) in the ability to move across, and integrate among, cloud providers: agility and flexibility are the result of well-managed maneuverability.
- Avoid long-term vendor contracts, in spite of pricing incentives vendors routinely use to lock companies into long-term relationships – which are agility killers.
IT Cost Reduction & Controls
- See above.
Business Agility & Flexibility
- The best way for technologists to understand the need for business agility and flexibility – as well as business cost reduction and controls – is to live among business professionals – not in the “IT department” surrounded by IT professionals and vendors.
CIOs need to stop being “concerned” about the same things year after year. There are steps that companies can take to exploit the incredible business technology trends and efficiencies we’ve seen over the past ten years. The focus should be on business technology integration, not “alignment” or whining about how hard it is to define the “business value of IT.”
Prediction: if the annual list of CIO concerns stays the same, CIOs and their lists will disappear.
This article was written by Steve Andriole from Forbes and was legally licensed through the NewsCred publisher network.