T-Systems recently held two executive dinners in conjunction with the Financial Times. The first dinner was attended by CIOs and IT leaders from a variety of sectors. The second was attended by CFOs, similarly from a diverse range of sectors. Both dinners were highly interactive and thus enabling all participants to both share IT-related challenges and gain insight. I hosted both dinners.
This report summarises the key discussion points emerging from each dinner and then draws some broad conclusions:
The changing role of business and thus in turn the changing role of the CIO was discussed. It was generally accepted that whilst CIO does not stand for Chief ‘IT Manager’ Officer, it was unlikely that the CIO would be invited to provide input into business strategy if they were not running an efficient IT factory and so providing an acceptable level of service.
It was generally felt that aligning the key performance indicators of the IT function with those of the organisation was the best way in which to demonstrate business relevance. Despite the uneasy relationship the IT industry has had with the user community, which in turn has perhaps accelerated the uptake of Cloud and BYOD, the CIOs present felt that these changing times represented an opportunity for a reinvention of their role.
It was flagged that BYOD in particular was simply the thunder; the lightening being the changing relationship between workers and employers in the digital economy. To overly focus on BYOD at the expense of the associated business transformation opportunities would be to miss out on the chance to lead business change.
Transformation of the IT Supply Chain was recognised as another major impact on how CIOs manage their environment. Cloud Brokers working directly with user organisations as well as their IT supplier base will increasingly play a role in sourcing short term capacity and services. There was some debate over who would take on the brokerage role and whether or not this threatened to disintermediate CIOs.
Cost management remains an important theme. In respect of suppliers phrases such as “sweat their balance sheet” or “Squeeze the vendor” were voiced. After some discussion it became apparent that both the vendor and the IT function have the same objective and this should work more as a partnership.
Clearly there is a move to providing a better service to the users. One CIO mentioned how he was struggling with how to engage with the user community. The ensuing discussion led to the conclusion that the users are not really the IT function’s customers; the organisation’s customers are. As such the users should be treated as partners to the IT function; together working to improve the condition of the customers.
Many of the CFOs had overall responsibility for IT.
Everyone agreed that the role of the CIO is strategically important, though none of the organisations had IT representation at boardroom level. Interestingly nobody saw their CIO as a future CEO.
Cost management of course has a large bearing on the CFO’s responsibilities. This is no different when it comes to IT spend. That said the CFOs present recognised that the IT function should be considered from a value perspective, though nobody could identify how much, say, one dollar invested in the IT function would yield in terms of business value.
This being a very important issue, we explored it and concluded that the business value yielded from the IT investment does not emerge from the technology per se, nor from the IT function. Business value is largely created when the users lever new technology to achieve business goals.
It was recognised that it is thus unfair to burden the CIO with the responsibility of delivering IT value. Whilst they have a critical role to play, the responsibility must lie with the users; specifically the heads of department / line of business owners.
There was a wide spectrum of perspectives in respect of the CFO’s relationship with the CIO. At one end there was suspicion over how a similar service delivered in two different locations could be so vastly different from a cost perspective right through to a total trust in the CIO, whereby all IT related decisions are simply approved rather than scrutinised.
In discussion we concluded that the former example might be attributed to lack of trust and the latter to too much trust. In the former case the CIO might address this by specifically providing greater visibility of costs and more generally developing a more empathetic outlook in order to anticipate trust-challenging scenarios.
In the latter case the total trust in the CIO was unhealthy because there needs to be appropriate governance from the leadership team in an area such as IT which is highly critical to the business. It was felt by the guests, that CFOs cannot simply abdicate responsibility for IT to the CIO.
We concluded that this really highlighted the risks associated that a lack of IT representation at board level from a corporate governance perspective. One day this might have a bearing on the perspectives of analysts and thus share price.
Expanding further on risk, whilst it clearly wasn’t in the nature of the traditional CFO, the guests recognised that the acquisition of risk where it delivers increased value rather than risk elimination is important. The notion of failing and failing fast as a business mantra was discussed.
In the same vein innovation was discussed and CFOs get innovation. All the better if it comes risk-free! CFOs of some of the more established organisations lamented over the general lack of innovation present within their corporate culture. Everyone understood how this has arisen and felt that this was an issue that needed to be tackled at a national level if the UK is to remain economically significant in the global economy.
Both groups held passionate views on the subject of IT and its role in organisational success. We were fortunate to have many forward thinkers amongst the guests. They are reinventing their roles to embrace the uncertainties and opportunities that the transition to the digital economy brings.
There clearly is convergence in the mind sets of the CIO and CFO communities. It was rewarding to witness the advances made in this respect.