The image problem

Despite recent shifts in the relationship between business and IT, CIOs are still often regarded as technical support staff. Eliot Beer examines IT’s business image.

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By  Eliot Beer Published  December 22, 2005

|~|gartner-leamus200.jpg|~|Leamus: World-class CIOs recognise the strategic importance of people.|~|The fact that a CIO’s job title follows the ‘CxO’ pattern should be a sign that they are regarded as a fundamental part of the ‘top team’, that their contribution to the business as a whole is recognised. But it isn’t. According to a recent UMT survey from Europe and the US, 68% of business executives still needed the CIO to translate the value of IT to the business because they did not know how to measure it themselves. The same survey suggested that the role of the chief information officer is seen as a technical rather than a business position. And there is no reason to suggest this should be any different in the Middle East, where many businesses are still working to find the value of IT. Research firm Gartner has recently started a series of regional quarterly CIO seminars, aimed at exploring the relationship between an organisation’s IT department and the rest of the business, with the implicit suggestion that the relationship is not particularly favourable. Evan Powell, group general manager of information technology at Al Tayer Group, says, “I think a lot of CIOs will look at the business strategy, and then create an IT strategy accordingly, aligning IT to the business. But I think in IT we can be a business driver and take a role in improving the way a business operates.” He suggests that a lot of this depends on the attitude of senior business executives, as well as the mindset of CIOs. If a chief executive is prepared to accept the idea of IT as a way of developing the business, and not just a background service, then it is easier for an IT manager to drive business proposals. But Powell also says the mindset of the CIO is vital too, not just in terms of their ability to understand business principles, but in terms of their balance of business and technical ability as well. “A CIO needs to understand the business side of things, but if they don’t have a pretty sound knowledge on the technical side, they may have a problem with developing a good working relationship with their own IT staff,” he says. “I’m a banker by trade and it is very useful to have a business background, but if you don’t have a good grasp of the technology, it could be potentially disastrous.” Luis Leamus, vice president for executive programmes at Gartner, agrees with this. He says that while IT-trained CIOs tend to easily increase IT credibility, they often have difficulty relating to business peers and establishing partnering relationships. On the other hand while business-trained CIOs easily make relationships, they can stumble when dealing with complex IT issues and ‘vapourware’ — exciting products which are promised but never delivered. Gartner suggests that IT departments fall into one of four categories, based on their impact on the business operations and the business strategy of an organisation. The firm says about half of all European and Middle Eastern IT departments fall into the ‘implementer’ category, where the department mainly automates individual functions and tasks, and doesn’t take a role in driving the business. The top category — of ‘innovator’ — means an IT department drives change from a business perspective, developing growth opportunities and competitive advantage for the company. The CIO in this case acts as an entrepreneur within the business and is a trusted advisor to the very top tier of management. Gartner says only 5% of IT departments fall into this category. Etihad Airways' head of IT, Klaus Giesemann, thinks there may be a particular reason why many IT departments in many Middle Eastern enterprises will struggle to move into Gartner’s ‘innovator’ category: “You have to be in the position to give advantages to the business, to be able to drive the business, rather than the business driving IT. But to do this you require a stable IT environment. Currently Etihad is growing so fast, because it is such a new company, that the business is driving IT to support this growth. “At the moment, then, we’re not in the position to offer much to the business except support, and I think this may be true of other enterprises in the region which are experiencing high levels of growth. If you’re doing new projects out of necessity, it is harder to generate innovative IT proposals, and perhaps there isn’t the drive either if there is strong growth.” Rajendra Prabhu, IT manager at Bahrain luxury retailer Al Hawaj, says he is in a position to offer ways for IT to drive the business and improve its processes, perhaps more vital in Bahrain’s tight retail sector than in other industries in the region. His background is in finance, but he has spent 20 years working in IT, so he feels he knows both sides of the equation fairly well. “My brief from the owners of the company is to deliver new ways to drive the business using IT, and I’m fortunate that they are very progressive when it comes to technology,” says Prabhu. “I think the most important thing is to not just look at technology for technology’s sake, but build a very firm business case to support the proposal.” So what is the solution for Middle Eastern CIOs wanting to change their image within the enterprise? If they are working in a fast-growing industry, should they wait for the pace to slacken before trying to deliver innovative proposals? Or should technically-minded CIOs go on business courses, and money-men go take computer classes? Gartner’s Leamus, talking about this point, says, “World-class CIOs recognise the strategic importance of people; people create the top-level performances and relationships necessary for strategic two-way partnerships, tight business and IT alignments, and high degrees of customer intimacy. And, ultimately, good customer relationships grow from solid value, relationship, and performance management.” Ultimately, much of the burden is on the individual CIO to deliver both effective leadership within his or her IT department and good business cases to the management. And this doesn’t come out of a book, at least according to Etihad’s Giesemann — it is down to the individual themselves to prove their abilities on both sides of the fence. ||**||

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