New Manufacturing Leadership IT Mandate: Adopt New Skills and Mindset

Sept. 28, 2011
While a survey revealed that 75% view the CIO as a business leader and innovator, just as many still view IT only as an 'enabler for running the business.'

The idea that a CIO must be both an IT leader and a business strategist is not a new one. However, despite all the talk of getting a seat at the strategy table, most CIOs have only been offered the occasional folding chair.

A 2010 survey of 230 business executives at global organizations (including several global manufacturers) conducted by HCL Technologies and Knowledge@Wharton, -- revealed that two-thirds of respondents viewed the CIO as a business leader and innovator. While just as many respondents said that their organization sees IT as a "strategic driver for transforming the business" IT is still widely viewed only as an "enabler for running the business."

So what exactly prevents IT from expanding beyond its traditional support function and how can manufacturing industry CIOs become more strategic business leaders?

While some of the barriers are external-the longstanding relegation of IT to an organizational "ghetto," where people aren't exposed to business issues, for example -many exist within the individual. Removing personal barriers may require a fundamental change in how you view your capabilities and responsibilities.

Whether you are supporting a plant management, R&D or design organization or running IT operations in distribution, warehousing and logistics management, the challenge is the same. After years of taking that back seat regarding business strategy, it is time for a more enlightened and evolved professional state. It is time to become a "Reincarnate CIO."

The notion of the "Reincarnate CIO" reflects a state of mind, not a list of defining traits. It also highlights the need for increased focus on business versus technology, more on strategy than on operations. Without abandoning the traditional tasks of controlling costs and increasing efficiency, IT must be increasingly viewed as a driver of greater business innovation and impact.

Reincarnate CIOs are accountable to the CEO and business unit heads, who set strategy, and to the COO and CFO, who oversee operations and the cost of running them. They serve as a change agent within the organization by emphasizing communication and transparency and using negotiating skills while building numerous partner relationships.

So, what are the steps to becoming a reincarnate CIO?

First, reset your thinking -- become more knowledgeable about your business and your industry. A typical IT mindset can trap executives in a techno-centric thinking -- a view of the corporate world that doesn't encourage support from corporate leadership.

Second, align IT and business strategy. There's an interesting litmus test of a CIO's business orientation: ask him who his customers are. Ask yourself. If you immediately think of the guys in Procurement who are always calling about glitches in the new ERP system, you fail the test.

Seventy percent of respondents in the HCL-Knowledge@Wharton survey considered IT alignment with business plans the most important factor in helping IT play a strategic role. In order to adopt this business focus, it's worth expanding your definition of "customer" beyond your internal customers to the end users of your company's product or service -- that is, your customer's customers. How can IT enhance their experience, as well as the experience of that demanding customer segment in Procurement?

End users very often drive the innovation that IT can enable. For example, consider the profound generational shift in technology usage. Most young people don't have landline phones. They prefer texting to calling and they don't e-mail. This is requiring companies in almost every industry to change the way they do business.

Third, focus on ROI. One sure way to align IT with business -- and to earn the respect of senior business executives -- is to measure the ROI of IT investments in terms of their business benefits.

Assessing technology ROI can be difficult, as any CIO knows. Although nearly one-third of the HCL-Knowledge@Wharton survey respondents said they can track and estimate ROI from IT projects, more than half reported being able to do so only sometimes -- and nearly one-fifth said they never could.

Fourth, track and capture business data and then measure its value to the company. Tracking data has become easier. The problem is that many organizations have no idea what data they've accumulated or what to do with it.

While some companies have developed business dashboards that interpret the significance of captured data about business operations, many really aren't that detailed. They only supply abstract summaries of monthly or regional financial reports.

A growing number of CIOs see this as an opportunity to establish methods for better analyzing the raw information, moving operations data through the IT layer to provide insights and intelligence that will help business decision making. An enlightened CIO has a dashboard with predictive indicators that are more actionable and real-time than a typical passive business dashboard.

For example, final sales figures aren't the sole metric. IT systems are linked to operations and highlight detailed drill-downs into key databases. Instead of simply reporting monthly statistics, a progressive dashboard might signal in red, green or amber the status of current costs or inventory levels and issue alerts when the levels would have a material impact on sales.

Fifth, rethink the nature of partner relationships. CIOs must develop their relationship-building skills with business partners, which works best when you have access to everything they have learned and can then leverage the changing landscape.

In today's world of frequent technological change, a CIO can live the equivalent of multiple lives in a single career, over a single lifetime.

Finally, be patient. The transformation doesn't happen overnight; it's a journey, both for the CIO and for his or her organization.

Dr. Shami Khorana is president of HCL America, an offshore IT & software development company.

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