Description
Description explain about a path to success for cios powerful position, clear mandate.
Hugo Trépant
Rami Mourtada
Martin Roets
Perspective
A Path to
Success for CIOs
Powerful Position,
Clear Mandate
This report was originally published before March 31, 2014, when
Booz & Company became Strategy&, part of the PwC network of firms.
For more information visit www.strategyand.pwc.com.
Contact Information
Beirut
Ramez Shehadi
Partner
+961-1-336433
[email protected]
Chicago
Eduardo Alvarez
Partner
+1-312-578-4774
[email protected]
Düsseldorf
Jens Niebuhr
Partner
+49-211-3890-195
[email protected]
Dietmar Ahlemann
Principal
+49-211-3890-287
[email protected]
Frankfurt
Stefan Stroh
Partner
+49-69-97167-423
[email protected]
Olaf Acker
Principal
+49-69-97167-453
[email protected]
London
Hugo Trépant
Partner
+44-20-7393-3230
[email protected]
Rami Mourtada
Principal
+44-20-7393-3444
[email protected]
Martin Roets
Senior Associate
+44-20-7393-3394
[email protected]
Milan
Enrico Strada
Partner
+39-02-72-50-93-00
[email protected]
New York
Jeffrey Tucker
Partner
+1-212-551-6653
[email protected]
Paris
Pierre Péladeau
Partner
+33-1-44-34-3074
[email protected]
São Paulo
Jorge Lionel
Principal
+55-11-5501-6200
[email protected]
Shanghai
Andrew Cainey
Partner
+86-21-2327-9800
[email protected]
Sydney
Peter Burns
Partner
+61-2-9321-1974
[email protected]
Booz & Company
1 Booz & Company
EXECUTIVE
SUMMARY
The chief information offcer is in a high-profle position,
with the potential to make a real strategic impact on his or
her business. But it is a diffcult job, especially now, as many
CIOs are losing executive power in the face of budget cuts
and the commoditization of signifcant areas of the technol-
ogy they oversee. Yet CIOs have the ability to infuence their
position within their company, through their success at both
the technical and business levels.
An ongoing Booz & Company study, the IT Org DNA
Profler
®
, demonstrates that two primary factors—the CIO’s
business mandate and position in the company—can have
a signifcant infuence on how the CIO is perceived inside
the company, and in turn on the success of the IT organiza-
tion. CIOs who have a mandate for change and who report
directly to the CEO typically have the most successful IT
organizations, according to the study.
Improving both mandate and position, however, isn’t easy.
Getting the basics right is certainly critical in building cred-
ibility. Beyond that, CIOs should take specifc steps to
increase their visibility and effect: Showcase IT’s strategic
value, manage requirements and priorities, lead the business,
emphasize the right measures, tailor innovation, set technical
direction, and spearhead communication. CIOs who do so
will be best positioned to help their companies leverage IT to
transform their businesses.
2 Booz & Company
To be a CIO at a large organization is
to be given the opportunity to oversee
the entire IT function while working
closely with the business to unleash
new opportunities and effciencies
through IT. Yet it is no easy assign-
ment: The appeal of this high-profle
position is offset by considerable
challenges. The successful CIO must
gain a deep understanding of both the
strategic direction of the business and
how it operates, maintain a watch-
ful eye on the ever-changing external
technology landscape, and manage
the IT department itself—a collection
of diverse specialists who must work
together to deliver a wide range of
complex projects and programs
that will have a profound impact
on the business.
These challenges have been
compounded in recent years by a shift
in power, as many CIOs have lost
their hard-won place at the executive
table. This reduction of authority and
infuence is attributable in part to the
loss of corporate power that typically
accompanies substantial budget
cuts. Furthermore, as companies
increasingly rely on proven, packaged,
essentially commoditized IT systems
and hardware, CIOs at some
companies have come to be seen as
the overseers of a utility service rather
than as partners who contribute
signifcantly to the organization’s
competitive position.
Yet CIOs have the ability to infuence
their role and ultimately their success.
The CIO has substantial control
over “hard,” measurable factors
such as the way the IT department is
organized and staffed, the processes
it adopts, and the technical direction
it takes. “Softer” factors, such as
communication, decision making, and
the motivation of IT employees, are
also within the CIO’s direct sphere
of infuence. Other factors, however,
such as the CIO’s standing among the
organization’s top executives and the
IT organization’s relationship with
the rest of the business, are harder to
control, because they involve people
outside IT who may have different
views of the department’s vision,
priorities, and value.
Since 2007, Booz & Company has
been conducting a periodic study,
called the IT Org DNA Profler
®
, to
better understand the factors that
drive successful IT organizations; so
far, it has received more than 2,000
responses. The study demonstrates
that two factors in particular—a
CIO’s business mandate and
position in the company—can have
a signifcant infuence over the less
controllable issues. Thus, these factors
are key to the role that CIOs play at
their organization and, ultimately, key
to their success.
THE CIO
CHALLENGE
CIOs have the ability to infuence
their role and ultimately their success.
3 Booz & Company
Note: IT Org DNA survey sample size: 1,694 defnitively profled respondents out of 2,033 total (Oct. 2007-Sept.
2008).
Source: Booz & Company
Exhibit 1
Distribution of CIO Types and Reporting Lines
In the course of the IT Org DNA
study, Booz & Company has deter-
mined that CIOs typically play one
of three roles in large organizations:
“utility manager,” “business process
improver,” or “IT entrepreneur/
innovator.” About half of all CIOs
function as utility managers, whose
mandate is typically limited to
“keeping the lights on.” Half of all
CIOs report directly to the CEO,
40 percent report to another C-suite
executive, and the fnal 10 percent
report to an executive outside the
C-suite. But a CIO whose role is
confned to utility manager is signif-
cantly more likely to report to a top
executive other than the CEO—this
is the most common combination
(see Exhibit 1). A CIO who reports
THE
PERFORMANCE
FACTOR
Other
C-Suite
Non-
C-Suite
CEO
CIO
Reporting
Line
CIO Type
842
573
Utility
Manager
Business
Process
Improver
IT
Entrepreneur/
Innovator
279
380
387
75
311
233
29
181
88
10
4 Booz & Company
directly to the CEO is more likely to
be characterized as having a success-
ful IT organization than one report-
ing to a less senior executive.
Furthermore, there is a strong corre-
lation between IT leaders who have
a clear mandate for change—those
seen as an entrepreneur/innovator
or a business process improver—
and their IT organizations’ ability
to execute successfully. These
organizations are far more likely
to be successful than those run
by utility managers. There is also
a correlation, although less strong,
between reporting line and execu-
tion ability (see Exhibit 2).
Note: IT Org DNA survey sample size: 1,694 defnitively profled respondents out of 2,033 total (Oct. 2007-Sept. 2008).
Source: Booz & Company
Exhibit 2
IT Execution Ability by CIO Type and Reporting Line
Other
C-Suite
Non-
C-Suite
CEO
CIO
Reporting
Line
NEGATIVE OVERALL
DIFFERENTIAL
Utility
Manager
Business
Process
Improver
Weak Execution
Strong Execution
IT
Entrepreneur/
Innovator
POSITIVEOVERALL
DIFFERENTIAL
27% of 380
59% 0f 311
70% of 181
54% of 233 51% of 88
70% of 10
55% of 29
21% of 387
8% of 75
CIO Type
11.0 million = S
Guidelines:
aölkdfölka =
32.8% =
30.1% = j
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Approved Colors, Tint
5 Booz & Company
CIOs should consider taking actions
to strengthen their position and
clarify their mandate.
Given these results, it is clear that
CIOs who hope to improve the
performance of their IT organization
can signifcantly help themselves by
increasing their own infuence within
their organization’s hierarchy and
ensuring that they take on the role
of change agent. To do so, they must
improve in two areas, business man-
date and position.
“Mandate” refers to what the
business has formally asked and
empowered the CIO to do. IT’s
customers—both business executives
and end-users—have increasingly
high expectations of the IT function.
Surrounded by constant IT innovation
in their daily lives, they have come to
expect professional IT organizations
to continually provide the business
with better functionality, usability,
and accessibility. Meanwhile, the
“utility” aspects of IT, including
stable provision of infrastructure
and services, are now often viewed
as baseline services and taken for
granted. The challenge for the CIO is
to fulfll all the fundamental require-
ments of the utility manager while
simultaneously securing a mandate to
deliver real change through the role
of business process improver or IT
entrepreneur/innovator.
“Position” refers to how connected
the CIO is to the wider organiza-
tion and how the CIO interacts with
senior business executives. As noted,
this is frequently manifested in the
CIO’s reporting line. A strong posi-
tion within the organization is critical
to the CIO’s ability to understand
what really makes the business tick
and to apply that business knowl-
edge to prioritization of investments
and projects and deliver appropriate
solutions. Position also determines
whether the CIO has the authority
and top-level support to bring about
real change. The CIO’s challenge is
to earn that support and trust by
demonstrating an informed strategic
perspective, powerful communication
skills, and real leadership both within
and outside the IT department.
Although mandate and position are
individually linked to success, the two
together provide a winning combina-
tion. All CIOs should consider taking
actions to strengthen their position
and clarify their mandate.
ROOM FOR
IMPROVEMENT
6 Booz & Company
As long as the business side perceives
the IT function as underperforming,
it is unlikely to take seriously either
the CIO’s ambition to operate as a
strategic partner or any attempts
to deploy IT in a more strategic or
entrepreneurial way. In order to
change this perception, CIOs must
frst get the basics right and make
sure they have all the utility aspects of
IT well in hand, by delivering reliable
and high-quality service—a task best
accomplished when the CIO main-
tains control, rather than relegating
it to subordinates. Getting the basics
under control will help CIOs gain the
credibility to work more closely with
the business to identify opportuni-
ties to pioneer innovation and the
improvement of business processes.
At that point, CIOs can take seven
specifc actions to increase their vis-
ibility and impact, working toward a
more senior position with a greater
mandate for both infuence and
change.
Showcasing IT’s strategic value. 1.
CIOs should continually seek
ways to demonstrate that IT is
more than a commodity and that
its formal mandate can safely be
extended. Well-publicized launches
of new applications and frequent
communication of differentiating
functionality and tools will remind
the business of IT’s potential to add
real business value. CIOs should be
able to communicate IT’s value in
jargon-free language.
Managing requirements and priori- 2.
ties. CIOs need to ensure that both
the IT function and the business
function understand the business’s
technology requirements and that
the business participates actively
in identifying and prioritizing IT
initiatives. This means creating
committees through which business
owners and IT jointly establish the
priorities for the IT department,
determining capital allocation and
the project portfolio.
Leading the business. 3. CIOs can
progressively increase their visibil-
ity by developing strong relation-
ships with an expanded number of
business leaders, built on a reputa-
tion for doing the basics well,
coupled with strategic understand-
ing and good judgment. Actions
that demonstrate that the CIO is
a capable leader who understands
the big picture should bring him or
her closer to the CEO. Examples
include identifying cost-cutting
opportunities, taking responsibility
BUILDING
CREDIBILITY
AND VISIBILITY
7 Booz & Company 7 Booz & Company
for business initiatives, and par-
ticipating in governance structures
outside IT, while clearly articulat-
ing a vision and strategy for IT.
Emphasizing the right measures. 4.
For IT to demonstrate that it is
meeting business requirements,
the department and the business
leaders must work together to put
in place service-level agreements
(SLAs) that are aligned with the
priorities of the business. These
delivery standards should be based
on objective metrics for running
IT on a daily basis, such as system
availability, customer satisfaction,
problem resolution time, and the
like, as well as for the management
of new IT projects, including on-
time milestones, error and incident
rates, and cost versus budget.
Once the SLAs are in place, the
CIO needs to identify key perfor-
mance indicators (KPIs), commu-
nicate them to the IT organization
and the business, and provide
incentives to exceed KPI targets.
External benchmarking can verify
and demonstrate that the service
provision from the internal IT
department is competitive in cost
and quality.
Tailoring innovation. 5. Any attempts
to foster innovation that adds busi-
ness value should be grounded in
an understanding of current and
future customer needs. Working
closely with business counterparts,
IT can identify initiatives in which
an entrepreneurial approach may
offer signifcant strategic or com-
mercial value. Here, CIOs will
have to be selective: Resources for
entrepreneurial activity are likely
to be limited, and not all depart-
ments will be receptive to working
closely with IT.
Setting technical direction. 6. The
CIO’s architecture group needs to
establish policies and standards
regarding enterprise architecture—
including the application portfo-
lio, infrastructure, data, security,
and network—and communicate
them to the business side. Doing
so will help standardize develop-
ment processes, provide a stable
platform for systems integration,
and facilitate effective information
sharing among business users.
Spearheading communication. 7.
CIOs should take focused actions
to ensure that IT is well man-
aged. The IT organization needs
to be structured to best serve the
business, and crucial roles must be
identifed and staffed with high-
quality professionals. Regular,
structured communication will
ensure that the department’s direc-
tion and priorities are understood.
Performance management and staff
development programs should be
established to achieve a motivated,
high-performing team.
8 Booz & Company
The principle of building credibility
by getting the basics right before
seeking greater visibility and
interaction with the business will help
CIOs improve both their position
and their mandate. Strengthening
either factor alone will help increase
the CIO’s power and impact, yet will
probably fall short of the ideal vision
of the role.
Thus, CIOs must work to strengthen
both areas at once. If they can, the
result will be better performance,
greater trust and empowerment,
and a higher level of seniority.
Moreover, success in one domain is
likely to increase opportunities to
excel in the other. CIOs who can
demonstrate strategic understanding
of the business and come up with
fresh, clearly stated ideas for adding
value are more likely to be trusted
to proceed. CIOs who can add value
by engaging with the business in an
entrepreneurial way are more likely
to gain a senior audience and a closer
relationship with senior management.
CIOs who lack the credibility and
visibility needed to produce real
change will fnd it diffcult to change
their mandate and improve their
position. But the effort is well worth
it, if doing so helps transform the role
of the CIO and raise the profle of IT
as a whole. CIOs who succeed at this
effort will fnd it easier to overcome
some of the challenges of a diffcult
job, reclaim or safeguard executive
power, and realize the vision of their
role—managing IT effectively to
transform the business.
AN INTEGRATED
APPROACH
Key Findings
In the face of budget cuts •
and technological change,
many CIOs are losing their
place at the table.
A Booz & Company study •
reveals that the most
successful IT organiza-
tions are run by CIOs who
have a strong mandate for
change and who report to
executives at the highest
levels of the company.
We have identifed seven •
actions that CIOs can take
if they wish to improve
their effectiveness and get
the most business value
out of IT.
9 Booz & Company 9 Booz & Company
About the Authors
Hugo Trépant is a partner
with Booz & Company based
in London. He focuses on
business and IT strategy,
transformational change,
enterprise architecture, and
benefts realization, primarily
in the oil and gas and the
public-sector and government
industries.
Rami Mourtada is a principal
with Booz & Company based
in London. He focuses on
information technology in the
services sector, and specializes
in program diagnostics and
turnaround, strategic business
planning, large-scale IT-enabled
transformation, performance
management, and business
development and innovation.
Martin Roets is a
senior associate with
Booz & Company based
in London. He focuses on
IT strategy, organization,
and governance, along with
IT-enabled transformation, in
industries such as fnancial
services, oil and gas, the public
sector, and transportation.
Booz & Company is a leading global management
consulting frm, helping the world’s top businesses,
governments, and organizations.
Our founder, Edwin Booz, defned the profession
when he established the frst management consulting
frm in 1914.
Today, with more than 3,300 people in 61 offces
around the world, we bring foresight and knowledge,
deep functional expertise, and a practical approach
to building capabilities and delivering real impact.
We work closely with our clients to create and deliver
essential advantage.
For our management magazine strategy+business,
visit www.strategy-business.com.
Visit www.booz.com to learn more about
Booz & Company.
The most recent
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©2010 Booz & Company Inc.
doc_286695314.pdf
Description explain about a path to success for cios powerful position, clear mandate.
Hugo Trépant
Rami Mourtada
Martin Roets
Perspective
A Path to
Success for CIOs
Powerful Position,
Clear Mandate
This report was originally published before March 31, 2014, when
Booz & Company became Strategy&, part of the PwC network of firms.
For more information visit www.strategyand.pwc.com.
Contact Information
Beirut
Ramez Shehadi
Partner
+961-1-336433
[email protected]
Chicago
Eduardo Alvarez
Partner
+1-312-578-4774
[email protected]
Düsseldorf
Jens Niebuhr
Partner
+49-211-3890-195
[email protected]
Dietmar Ahlemann
Principal
+49-211-3890-287
[email protected]
Frankfurt
Stefan Stroh
Partner
+49-69-97167-423
[email protected]
Olaf Acker
Principal
+49-69-97167-453
[email protected]
London
Hugo Trépant
Partner
+44-20-7393-3230
[email protected]
Rami Mourtada
Principal
+44-20-7393-3444
[email protected]
Martin Roets
Senior Associate
+44-20-7393-3394
[email protected]
Milan
Enrico Strada
Partner
+39-02-72-50-93-00
[email protected]
New York
Jeffrey Tucker
Partner
+1-212-551-6653
[email protected]
Paris
Pierre Péladeau
Partner
+33-1-44-34-3074
[email protected]
São Paulo
Jorge Lionel
Principal
+55-11-5501-6200
[email protected]
Shanghai
Andrew Cainey
Partner
+86-21-2327-9800
[email protected]
Sydney
Peter Burns
Partner
+61-2-9321-1974
[email protected]
Booz & Company
1 Booz & Company
EXECUTIVE
SUMMARY
The chief information offcer is in a high-profle position,
with the potential to make a real strategic impact on his or
her business. But it is a diffcult job, especially now, as many
CIOs are losing executive power in the face of budget cuts
and the commoditization of signifcant areas of the technol-
ogy they oversee. Yet CIOs have the ability to infuence their
position within their company, through their success at both
the technical and business levels.
An ongoing Booz & Company study, the IT Org DNA
Profler
®
, demonstrates that two primary factors—the CIO’s
business mandate and position in the company—can have
a signifcant infuence on how the CIO is perceived inside
the company, and in turn on the success of the IT organiza-
tion. CIOs who have a mandate for change and who report
directly to the CEO typically have the most successful IT
organizations, according to the study.
Improving both mandate and position, however, isn’t easy.
Getting the basics right is certainly critical in building cred-
ibility. Beyond that, CIOs should take specifc steps to
increase their visibility and effect: Showcase IT’s strategic
value, manage requirements and priorities, lead the business,
emphasize the right measures, tailor innovation, set technical
direction, and spearhead communication. CIOs who do so
will be best positioned to help their companies leverage IT to
transform their businesses.
2 Booz & Company
To be a CIO at a large organization is
to be given the opportunity to oversee
the entire IT function while working
closely with the business to unleash
new opportunities and effciencies
through IT. Yet it is no easy assign-
ment: The appeal of this high-profle
position is offset by considerable
challenges. The successful CIO must
gain a deep understanding of both the
strategic direction of the business and
how it operates, maintain a watch-
ful eye on the ever-changing external
technology landscape, and manage
the IT department itself—a collection
of diverse specialists who must work
together to deliver a wide range of
complex projects and programs
that will have a profound impact
on the business.
These challenges have been
compounded in recent years by a shift
in power, as many CIOs have lost
their hard-won place at the executive
table. This reduction of authority and
infuence is attributable in part to the
loss of corporate power that typically
accompanies substantial budget
cuts. Furthermore, as companies
increasingly rely on proven, packaged,
essentially commoditized IT systems
and hardware, CIOs at some
companies have come to be seen as
the overseers of a utility service rather
than as partners who contribute
signifcantly to the organization’s
competitive position.
Yet CIOs have the ability to infuence
their role and ultimately their success.
The CIO has substantial control
over “hard,” measurable factors
such as the way the IT department is
organized and staffed, the processes
it adopts, and the technical direction
it takes. “Softer” factors, such as
communication, decision making, and
the motivation of IT employees, are
also within the CIO’s direct sphere
of infuence. Other factors, however,
such as the CIO’s standing among the
organization’s top executives and the
IT organization’s relationship with
the rest of the business, are harder to
control, because they involve people
outside IT who may have different
views of the department’s vision,
priorities, and value.
Since 2007, Booz & Company has
been conducting a periodic study,
called the IT Org DNA Profler
®
, to
better understand the factors that
drive successful IT organizations; so
far, it has received more than 2,000
responses. The study demonstrates
that two factors in particular—a
CIO’s business mandate and
position in the company—can have
a signifcant infuence over the less
controllable issues. Thus, these factors
are key to the role that CIOs play at
their organization and, ultimately, key
to their success.
THE CIO
CHALLENGE
CIOs have the ability to infuence
their role and ultimately their success.
3 Booz & Company
Note: IT Org DNA survey sample size: 1,694 defnitively profled respondents out of 2,033 total (Oct. 2007-Sept.
2008).
Source: Booz & Company
Exhibit 1
Distribution of CIO Types and Reporting Lines
In the course of the IT Org DNA
study, Booz & Company has deter-
mined that CIOs typically play one
of three roles in large organizations:
“utility manager,” “business process
improver,” or “IT entrepreneur/
innovator.” About half of all CIOs
function as utility managers, whose
mandate is typically limited to
“keeping the lights on.” Half of all
CIOs report directly to the CEO,
40 percent report to another C-suite
executive, and the fnal 10 percent
report to an executive outside the
C-suite. But a CIO whose role is
confned to utility manager is signif-
cantly more likely to report to a top
executive other than the CEO—this
is the most common combination
(see Exhibit 1). A CIO who reports
THE
PERFORMANCE
FACTOR
Other
C-Suite
Non-
C-Suite
CEO
CIO
Reporting
Line
CIO Type
842
573
Utility
Manager
Business
Process
Improver
IT
Entrepreneur/
Innovator
279
380
387
75
311
233
29
181
88
10
4 Booz & Company
directly to the CEO is more likely to
be characterized as having a success-
ful IT organization than one report-
ing to a less senior executive.
Furthermore, there is a strong corre-
lation between IT leaders who have
a clear mandate for change—those
seen as an entrepreneur/innovator
or a business process improver—
and their IT organizations’ ability
to execute successfully. These
organizations are far more likely
to be successful than those run
by utility managers. There is also
a correlation, although less strong,
between reporting line and execu-
tion ability (see Exhibit 2).
Note: IT Org DNA survey sample size: 1,694 defnitively profled respondents out of 2,033 total (Oct. 2007-Sept. 2008).
Source: Booz & Company
Exhibit 2
IT Execution Ability by CIO Type and Reporting Line
Other
C-Suite
Non-
C-Suite
CEO
CIO
Reporting
Line
NEGATIVE OVERALL
DIFFERENTIAL
Utility
Manager
Business
Process
Improver
Weak Execution
Strong Execution
IT
Entrepreneur/
Innovator
POSITIVEOVERALL
DIFFERENTIAL
27% of 380
59% 0f 311
70% of 181
54% of 233 51% of 88
70% of 10
55% of 29
21% of 387
8% of 75
CIO Type
11.0 million = S
Guidelines:
aölkdfölka =
32.8% =
30.1% = j
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5 Booz & Company
CIOs should consider taking actions
to strengthen their position and
clarify their mandate.
Given these results, it is clear that
CIOs who hope to improve the
performance of their IT organization
can signifcantly help themselves by
increasing their own infuence within
their organization’s hierarchy and
ensuring that they take on the role
of change agent. To do so, they must
improve in two areas, business man-
date and position.
“Mandate” refers to what the
business has formally asked and
empowered the CIO to do. IT’s
customers—both business executives
and end-users—have increasingly
high expectations of the IT function.
Surrounded by constant IT innovation
in their daily lives, they have come to
expect professional IT organizations
to continually provide the business
with better functionality, usability,
and accessibility. Meanwhile, the
“utility” aspects of IT, including
stable provision of infrastructure
and services, are now often viewed
as baseline services and taken for
granted. The challenge for the CIO is
to fulfll all the fundamental require-
ments of the utility manager while
simultaneously securing a mandate to
deliver real change through the role
of business process improver or IT
entrepreneur/innovator.
“Position” refers to how connected
the CIO is to the wider organiza-
tion and how the CIO interacts with
senior business executives. As noted,
this is frequently manifested in the
CIO’s reporting line. A strong posi-
tion within the organization is critical
to the CIO’s ability to understand
what really makes the business tick
and to apply that business knowl-
edge to prioritization of investments
and projects and deliver appropriate
solutions. Position also determines
whether the CIO has the authority
and top-level support to bring about
real change. The CIO’s challenge is
to earn that support and trust by
demonstrating an informed strategic
perspective, powerful communication
skills, and real leadership both within
and outside the IT department.
Although mandate and position are
individually linked to success, the two
together provide a winning combina-
tion. All CIOs should consider taking
actions to strengthen their position
and clarify their mandate.
ROOM FOR
IMPROVEMENT
6 Booz & Company
As long as the business side perceives
the IT function as underperforming,
it is unlikely to take seriously either
the CIO’s ambition to operate as a
strategic partner or any attempts
to deploy IT in a more strategic or
entrepreneurial way. In order to
change this perception, CIOs must
frst get the basics right and make
sure they have all the utility aspects of
IT well in hand, by delivering reliable
and high-quality service—a task best
accomplished when the CIO main-
tains control, rather than relegating
it to subordinates. Getting the basics
under control will help CIOs gain the
credibility to work more closely with
the business to identify opportuni-
ties to pioneer innovation and the
improvement of business processes.
At that point, CIOs can take seven
specifc actions to increase their vis-
ibility and impact, working toward a
more senior position with a greater
mandate for both infuence and
change.
Showcasing IT’s strategic value. 1.
CIOs should continually seek
ways to demonstrate that IT is
more than a commodity and that
its formal mandate can safely be
extended. Well-publicized launches
of new applications and frequent
communication of differentiating
functionality and tools will remind
the business of IT’s potential to add
real business value. CIOs should be
able to communicate IT’s value in
jargon-free language.
Managing requirements and priori- 2.
ties. CIOs need to ensure that both
the IT function and the business
function understand the business’s
technology requirements and that
the business participates actively
in identifying and prioritizing IT
initiatives. This means creating
committees through which business
owners and IT jointly establish the
priorities for the IT department,
determining capital allocation and
the project portfolio.
Leading the business. 3. CIOs can
progressively increase their visibil-
ity by developing strong relation-
ships with an expanded number of
business leaders, built on a reputa-
tion for doing the basics well,
coupled with strategic understand-
ing and good judgment. Actions
that demonstrate that the CIO is
a capable leader who understands
the big picture should bring him or
her closer to the CEO. Examples
include identifying cost-cutting
opportunities, taking responsibility
BUILDING
CREDIBILITY
AND VISIBILITY
7 Booz & Company 7 Booz & Company
for business initiatives, and par-
ticipating in governance structures
outside IT, while clearly articulat-
ing a vision and strategy for IT.
Emphasizing the right measures. 4.
For IT to demonstrate that it is
meeting business requirements,
the department and the business
leaders must work together to put
in place service-level agreements
(SLAs) that are aligned with the
priorities of the business. These
delivery standards should be based
on objective metrics for running
IT on a daily basis, such as system
availability, customer satisfaction,
problem resolution time, and the
like, as well as for the management
of new IT projects, including on-
time milestones, error and incident
rates, and cost versus budget.
Once the SLAs are in place, the
CIO needs to identify key perfor-
mance indicators (KPIs), commu-
nicate them to the IT organization
and the business, and provide
incentives to exceed KPI targets.
External benchmarking can verify
and demonstrate that the service
provision from the internal IT
department is competitive in cost
and quality.
Tailoring innovation. 5. Any attempts
to foster innovation that adds busi-
ness value should be grounded in
an understanding of current and
future customer needs. Working
closely with business counterparts,
IT can identify initiatives in which
an entrepreneurial approach may
offer signifcant strategic or com-
mercial value. Here, CIOs will
have to be selective: Resources for
entrepreneurial activity are likely
to be limited, and not all depart-
ments will be receptive to working
closely with IT.
Setting technical direction. 6. The
CIO’s architecture group needs to
establish policies and standards
regarding enterprise architecture—
including the application portfo-
lio, infrastructure, data, security,
and network—and communicate
them to the business side. Doing
so will help standardize develop-
ment processes, provide a stable
platform for systems integration,
and facilitate effective information
sharing among business users.
Spearheading communication. 7.
CIOs should take focused actions
to ensure that IT is well man-
aged. The IT organization needs
to be structured to best serve the
business, and crucial roles must be
identifed and staffed with high-
quality professionals. Regular,
structured communication will
ensure that the department’s direc-
tion and priorities are understood.
Performance management and staff
development programs should be
established to achieve a motivated,
high-performing team.
8 Booz & Company
The principle of building credibility
by getting the basics right before
seeking greater visibility and
interaction with the business will help
CIOs improve both their position
and their mandate. Strengthening
either factor alone will help increase
the CIO’s power and impact, yet will
probably fall short of the ideal vision
of the role.
Thus, CIOs must work to strengthen
both areas at once. If they can, the
result will be better performance,
greater trust and empowerment,
and a higher level of seniority.
Moreover, success in one domain is
likely to increase opportunities to
excel in the other. CIOs who can
demonstrate strategic understanding
of the business and come up with
fresh, clearly stated ideas for adding
value are more likely to be trusted
to proceed. CIOs who can add value
by engaging with the business in an
entrepreneurial way are more likely
to gain a senior audience and a closer
relationship with senior management.
CIOs who lack the credibility and
visibility needed to produce real
change will fnd it diffcult to change
their mandate and improve their
position. But the effort is well worth
it, if doing so helps transform the role
of the CIO and raise the profle of IT
as a whole. CIOs who succeed at this
effort will fnd it easier to overcome
some of the challenges of a diffcult
job, reclaim or safeguard executive
power, and realize the vision of their
role—managing IT effectively to
transform the business.
AN INTEGRATED
APPROACH
Key Findings
In the face of budget cuts •
and technological change,
many CIOs are losing their
place at the table.
A Booz & Company study •
reveals that the most
successful IT organiza-
tions are run by CIOs who
have a strong mandate for
change and who report to
executives at the highest
levels of the company.
We have identifed seven •
actions that CIOs can take
if they wish to improve
their effectiveness and get
the most business value
out of IT.
9 Booz & Company 9 Booz & Company
About the Authors
Hugo Trépant is a partner
with Booz & Company based
in London. He focuses on
business and IT strategy,
transformational change,
enterprise architecture, and
benefts realization, primarily
in the oil and gas and the
public-sector and government
industries.
Rami Mourtada is a principal
with Booz & Company based
in London. He focuses on
information technology in the
services sector, and specializes
in program diagnostics and
turnaround, strategic business
planning, large-scale IT-enabled
transformation, performance
management, and business
development and innovation.
Martin Roets is a
senior associate with
Booz & Company based
in London. He focuses on
IT strategy, organization,
and governance, along with
IT-enabled transformation, in
industries such as fnancial
services, oil and gas, the public
sector, and transportation.
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