What? Not All CEOs See IT As Strategic

The point that IT isn't strategic in driving businesses to achieve their strategic goals is an anathema to readers of CIO Insight. Yet, after decades of IT proving its value to the corporate bottom line, many CEOs still don't get it.

In an article published in in The Wall Street Journal, How to Tap IT's Hidden Potential (subscription required), Amit Basu, chairman of Southern Methodist University's IT and operations management department, and LatticeWorks Consulting principal Chip Jarnagin write of a metaphorical glass wall that separates the IT group from the rest of the business at most companies. "The wall prevents IT from being part of the discussion at the highest levels of company planning, robbing a firm of its full potential," they write.

Basu and Jarnagin offer a blueprint to those companies that need to make IT more strategic. Among their recommendations:

• Begin with IT literacy—and commitment—at the top. The impetus for effective IT management must come from the CEO and the board.

• Hire an IT leader who sees the big picture. The next step is to hire a true chief information officer—not just a technical expert—but a leader who understands the strategic importance and use of IT.

• Create demand for IT solutions. Managers at all levels across the organization need to be convinced that innovations in IT-related areas such as knowledge management, business intelligence, information security, change management and process integration are essential to the success of the enterprise.

• Make sure nothing gets lost in translation. A company must have people at all levels who can translate IT language for those outside that department and translate the language of management for those in IT.

• Rationalize IT spending. The planning of IT expenses and investments should be subject to the same rigorous procedures and methods as any other expenditure.

• Create an IT portfolio by evaluating risks and returns. Just as an investor balances risk and returns in constructing a portfolio of investments, management should analyze the costs, benefits and risks of all IT projects to determine how to get the most benefit from the dollars invested in technology.

"Once IT becomes an integral part of the company's executive dialogue," the researchers write, "the glass wall will be shattered, and IT's full value to the organization can be realized."

Posted by Eric Chabrow on March 11, 2008 11:28 AM