CIOs Will Shape IT’s Future Value Proposition

According to McKinsey, businesses agree on the strategic value of IT and technology to improve performance, but they do not trust their IT leaders to get them there. They have shared the results of a study of 709 executives, 395 of whom are technology-centric, and it shows that IT has a bright future if CIOs can just live up to what the business wants from them.

Withholding the Future

Right now, executives believe that IT generates the most value through traditional, operational activities; 45 percent of respondents cite business-process enablement, and 39 percent cite operational stability and management. In five years’ time, however, the leading response (although at a paltry 26 percent) is innovation, followed by integrating technology solutions at 23 percent. And while around 80 percent of respondents say business and technology should collaborate strategically, only 55 percent are actually doing that right now.

An impediment to IT’s progress is lack of understanding over who exactly is supposed to be leading transformation. CIO, CTO, someone else? A majority of respondents did not even think the CIO or CTO should be the one leading. And the bad numbers keep coming:

… perceptions are especially negative in the areas that are most critical to IT’s future value proposition… Just 12 percent of all respondents say their IT organizations are very effective at leading digital transformations across their business, and only 8 percent say IT is very effective at the design of e-commerce and online experience. When organizations have undergone major IT transformations (the modernization of infrastructure, for example), few business leaders have even noticed. Fifty-one percent of IT respondents report having undergone major transformations in the past two years, while just 36 percent of their business peers say the same.

What this all adds up to is that CIOs need to run a much tighter ship with a clearer vision. In the first place, McKinsey says CIOs need to establish themselves as true business leaders. For some, this might not be difficult all, but there are many organizations where the culture alone inhibits the relevance of the CIO role. CIOs in this position will have to campaign harder. They should make the case (backed by McKinsey’s data) that IT performs better when the CIO is involved in shaping overall (not just digital) business strategy.

The second thing CIOs must do is root out all the other factors that are currently holding IT back, such as weak governance or lack of business alignment. This is of course a massive undertaking in itself, but it needs to be addressed on an ongoing basis regardless.

McKinsey recommends these three steps in summary for IT to improve its value proposition:

  1. CIOs must rewrite their job descriptions.
  2. Address nagging causes of IT ineffectiveness.
  3. Integrate technology across the enterprise.

For further statistics and recommendations, you can view the survey data here:

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