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Five Tips for the New CIO to Break the Status Quo

Karl Fruecht, Principal Business Consultant, KillerIT
Karl Fruecht, Principal Business Consultant, KillerIT

Karl Fruecht, Principal Business Consultant, KillerIT

It is time for newly appointed CIOs to step up their game. While research shows business executives tend to dismiss the CIO as a strategic partner, the emergence of new digital tools, the need for reliable data and a growing demand for analytics talent have provided CIOs ammo to prove otherwise.

However, while IT effectiveness is constantly scrutinized, a recent McKinsey study shows there’s still hope. Respondents said when CIOs are involved in shaping company strategy; IT effectiveness is much higher, resulting in greater overall outcomes.

Incorporate the following five tips from day-one as a CIO to leverage the resources available to improve processes and drive business.

1. Get the Facts Straight

Far too many IT leaders lack a granular look at the state of their IT budget.

Gartner analysts made a disturbing conclusion in its study, How to Budget, Plan and Govern Application Rationalization: “… Sadly, most organizations don't have an application strategy, and, because APM (Application Performance Monitoring) is one of the poorest-scoring disciplines in our ITScore assessment, we can assume that most organizations don't have APM, either.”

“New CIOs must start strong by using the weapons in their arsenal to impact the bottom line and set a precedent for their department’s worth”

To correct this oversight, CIO’s should cultivate an understanding of the relationship between IT investments and the business capabilities or functions they enable. From there, they can figure out where to focus attention and resources.

2. Go for Quality, Not Quantity

Auditing inventory is equally as important for streamlining as it is to budget reductions. A CFO may know the IT budget is $50 million, but it’s time to be more specific.

“Firms invest millions in application software — money that they might otherwise invest in new sales and distribution partnerships or new plants and machinery,” Forrester wrote in its 2014 report Optimize Long-Term Application Effectiveness and Value.

Identify and evaluate IT applications early in the purchasing process to improve valuation accuracy. Running IT as a metrics-based, results-driven organization positions it as a source of competitive advantage.

3. Shed the Burden of Old IT

Forty percent of North American respondents to a recent study by Harvard Business Review Analytic Services say the biggest obstacle in successfully leveraging new technology was existing legacy technology getting in the way.

Retire the outdated legacy assets and projects that hold the entire enterprise back and make way for technologies that will bolster business.

4. Cross All of Your T’s

Talent, transparency, technology and time are the four pillars every organization leans on to deliver results outside the status quo. CIO’s should evaluate each carefully.

Are there enough hands on deck or is there a talent shortage? In addition, can you measure the transformation? There needs to be enough transparency to view and measure growth, both from IT and business perspectives. Third, make sure the technology is agile enough to support the business transformation.

Lastly, how much time is absorbed by “keeping the lights on”? Respondents of a Forrester Research survey of more than 3,700 IT leaders estimated they spend 72 percent of their budget “Keeping the lights on,” or supporting general operations.

5. A Holistic Business Approach

“On average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted.” McKinsey & Co. concluded this after surveying more than 5,400 IT projects for its widely cited report on IT project budgets.

CIOs must ensure that high priority projects improve business capabilities and deliver on strategic objectives. When a new CIO enters the fray with the savvy to drive business operations forward, IT will lead the charge.

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