One of the ways that CIOs can help move the business forward is by collaborating with the CEO and the C-suite on the organization’s future-state objectives.
This jives with Deloitte’s 2018 Global CIO Survey, which finds that the two mandates for the CIO of the future are transforming business operations and driving top-line revenue and growth.
Still, this can pose challenges to CIOs who often struggle to align IT goals with the company’s objectives.
“How often can you tie IT’s key objectives for a performance year to specific key objectives of the company or division? I’ll bet not very often,” says Mark Sander, Former Head of IT, Global Quality Operations at Teva Pharmaceuticals and current Managing Partner of MFS Digital Solutions, who is an Advisory Board member and a speaker at HMG Strategy’s upcoming 2019 New Jersey CIO Executive Leadership Summit on April 9. “Sure, we can always point to some generic key CEO objective - increase revenue to $XXX, become more efficient in delivery, increase customer satisfaction or become more cost effective, but how often can any layman in the company see the direct correlation between a business goal and an IT objective?”
Part of the problem, as Sander sees it, is that IT objectives, such as the percentage of data center operations that are being migrated to the cloud, are often described in ‘techno speak’, a language that business leaders don’t understand.
To help address these strategic gaps, Sander recommends that CIOs put together long-range business plans that include details on how these business objectives will be achieved beyond reaching high-level revenue and financial targets.
To that end, CIOs should also have a five-year strategic plan and/or a digital roadmap that ties to the company’s long-range business plans.
“At one company I was with, the CEO insisted on a long-range IT Strategy/Business plan as part of the annual budget approval process, yet the company didn’t have one detailed enough to leverage in its creation,” says Sander. “I had to create and articulate what I heard as the company’s business objectives, translating them into the tactical actions required at the Business Function level to achieve them. Since these touch all executives in the company and their respective organizations, my IT Strategy Plan presentations had to start with a validation by management of what I had written.”
Despite these challenges, Sander said it wasn’t as difficult to construct as some might imagine. “It really came together when I listened to the high-level targets management was communicating and put some thought into how to tactically meet them from the purview of the various business functions within the company. From there, it isn’t that difficult to assess the current technology and turn those business actions into IT deliverables to support them.”
“Don’t forget, there are no IT projects beyond the network, email and telephone systems. Everything we do in IT are in support of a business project,” says Sander.
Once a CIO is armed with an exhaustive list of IT strategic projects and service level goals, how do you prioritize them and determine which ones can occur within the following year’s budget cycle? “The simple answer is, as the CIO, you don’t,” says Sander. “You must lead an IT governance process to allow for joint prioritization and decision-making with the business.”
This requires a joint, balanced discussion with the business. “This process needs to allow all business functions and C-level leaders to have input and a say, which is really a seat at the table when this is discussed cross-departmentally. Trying to keep objectives within the resources and financing available by function just doesn’t work like it has in the past. There are too many enterprise-level systems in today’s environment and digital transformation almost always transcends individual C-level leaders’ functional or divisional organizations,” adds Sander.
Continually Communicate Your Objectives
Once the CIO has his or her plan and annual objectives in place – they need to communicate them repeatedly. “Communicate these to your leadership team, their direct reports, their directs’ organizations and to your business partners and to their organizations,” says Sander. This communication needs to be in language that is understandable by each constituent and needs to include explanations on the ‘why’ (or, in the cases of deferred projects, the ‘why not’) and how they are critical to supporting the corporate goals and objectives.
“To maintain business backing and alignment, you will also want to periodically re-communicate this to the executive management team or within your governance councils while updating them on your progress,” says Sander. “Since there are no IT projects, resources and business involvement (e.g. planning, requirements, testing, implementation) is always required and management support is the means to ensure the proper resources are allocated.”
When presenting to executives, including governance councils, the discussion must be in business terms and not in technical terms, says Sander. Effective discussions should include:
- The business need for the project
- The business benefit for the project, including quantifiable, measurable financial benefits
- The cost of the project – both capital investments, one-time expenses and ongoing support costs. In other words, the total cost of ownership of a system or project
- Project timing (high-level project plan with major business deliverables, a few key milestones and the go-live date)
- A simple ROI calculation
The biggest thing most CIOs don’t do enough of is making their organization’s plans – along with the progress towards those plans - public enough. “Even if projects have slipped, you need to be transparent to build credibility and to create awareness,” says Sander.
To learn more about HMG Strategy’s 2019 New Jersey Executive Leadership Summit and to register for the event, click here.