Technology in Step with Business
When enterprise leaders see how technology can help them reach business goals, IT and the CIO can regain the stature of a strategic enabler.
The way that corporations view technology has shifted significantly in recent years. Once seen as a strategic enabler that business leaders supported without question, IT today is often seen as operational overhead rather than a competitive weapon. While no company would rip out their IT infrastructure to go back to the old ways of doing things, IT projects that come in over budget, miss deadlines and produce lackluster results make many companies wish they could.
CIOs today must take on an important challenge – restore the perception of IT in the enterprise as a strategic enabler rather than just necessary infrastructure or software. Technology leaders need to free themselves from supporting day-to-day operations long enough to see the big picture and make IT strategic again. The way to accomplish this is by understanding the company’s goals and showing business leaders how IT projects and services can help reach them faster. Succeeding at this challenge not only helps CIOs regain their role as strategic partners with the business, it also can positively impact business performance and deliver a competitive edge. The business-IT ecosystem is transforming rapidly in many ways. The CIOs who understand these challenges and are able to address them effectively will emerge as the clear leaders and ahead of their peers who view their roles as technology leaders or operations leaders.
Making a business case for IT has become essential to the success of enterprises today. Decades ago, when technology was new to corporate settings, IT was viewed as a mysterious force that dazzled business leaders into spending heavily with few questions asked. IT systems that could crunch sales figures or provide customer insights were a marked improvement over manual processes, and so corporations invested in technology products based on their raw capabilities without necessarily connecting IT investments to business performance. The business case was self-evident.
Today, that’s changed. Thanks to the uncertain economy that has brought budget pressure across the board, business leaders won’t – or can’t—approve IT spending the way they once did. The business benefits of upgraded technology products over existing versions are not as easily demonstrated as the business benefits of technology over manual processes once were.
In addition, C-suite executives have grown more pessimistic about technology; many view it as an infrastructure expense – as essential yet non-strategic as electricity – that must be maintained, managed and minimized. Because of these pressures, CIOs are faced with the daunting task of clearly and repeatedly demonstrating how technology investments help the company achieve specific business goals. Gone are the days when technology leaders could concentrate simply on technology; CIOs today must be outwardly focused, customer driven and understand technology’s impact on productivity, agility, competitive advantage and other business drivers.
CIOs who work to demonstrate the positive impact IT investments have on reaching specific business goals – increased revenue, faster time to market, improved customer service, just to name a few – can readily draw the relationship between technology and business value. That data is essential when seeking additional IT investment. But here’s another reason why CIOs should strive to align IT spending and business value: According to a survey of 268 executives sponsored by Wipro that was conducted in early 2012, there is a strong correlation between companies that view IT as a strategic enabler and those that outperform their competition financially (see Exhibit 1 [cross tab 4]). So by viewing IT strategically and investing in IT in a way that aligns with business goals, companies reap greater benefits and can gain an advantage on competitors who view IT as infrastructure and make tactical investments in technology (see Exhibit 2 [cross tab 5]).