LEADINGedgeforum. Building and Leveraging Advanced Business/IT Relationships. Executive Summary. April Alex Mayall David Moschella

Transcription

1 April 2010 LEADINGedgeforum EXECUTIVE PROGRAMME Building and Leveraging Advanced Business/IT Relationships Executive Summary Alex Mayall David Moschella

2 Building and Leveraging Advanced Business/IT Relationships It has taken 50 years for information technology to establish itself as a major force of societal change. Today there are few commercial or governmental activities that are not significantly affected by IT, and people in business increasingly recognize the importance of IT for ensuring their companies survival and competitive success. This should create ideal conditions for the traditional custodians of the technology senior people in the IT function to take on wider leadership roles within their organizations, yet this is still more the exception than the rule. Building the right relationships with the business Our research into the relationship between CIOs and boards of directors shows the parties to be as far apart today as they were in the 1980s and 1990s. A major reason for this disconnect is that the enterprise IT function has traditionally exercised a subservient Provider role opposite the business, supplying systems and services in response to explicit business demands. This was appropriate in the early days of commercial data processing, when the main requirement was the automation of clerical procedures. Now that information technology pervades and influences so many aspects of our business and personal life, a wider range of business/it relationship models is required. Our research has surfaced two further basic relationship models, both of which involve a more proactive style of interaction with the business: the Technology Promoter (educator/evangelist) and the Business Partner (agent of change). In order to meet the needs of the business, CIOs need to get to grips with and invest in all three of these models. There is also a further role, less commonly found: the Executive Peer. In the Peer role, IT has been recognized by top as having a profound impact on an organization s competitive positioning, and senior IT people advise business on the impact of IT at a strategic level. The 4Ps of business/it relationships There are four distinct roles that Enterprise IT must address. Each has an analogy with the external and supplier sides of the IT marketplace: Provider supplying professional IT systems and services in response to explicit business requests, much as IT outsourcing firms do for many firms today Promoter exploring and introducing new technologies relevant to the business, staying aligned with new hardware, software and internet service vendor offerings Partner acting as agent of change within the business, in conjunction with or as an alternative to external consultants Peer advising and guiding business executives on the strategic impact of IT, much like an outside board-level director

3 Lead the business Enable change Peer Primary IT role Stimulate demand Partner Promoter Manage supply Provider Contractual Advocacy Joint goals Style of collaboration Strategic Figure 1 Business/IT relationship models While the Provider role still predominates in many organizations, most CIOs aspire to move their people closer to the business, and especially to adopt a Partner role in business change programmes. Providers, Promoters, Partners and Peers respond to very different demands and business expectations; their performance is assessed by different metrics; they need widely differing skill sets and personal attributes; and their styles, organizational models and success criteria are in many respects incompatible with one another. The shift between roles is therefore one that cannot be undertaken lightly, and some senior IT people may prove unwilling or unable to adapt to the new ways of working. Dealing with different business change agendas Questions Ideas Top line Experiments Promoter Doing business differently Radical change New ventures and markets Embracing uncertainty Taking risks Strategic Intent/goals Partner Doing today s business better Targets Bottom line Measures Rewards Provider Continuous improvement Sweating the assets Exercising control Compliance/avoiding risks Figure 2 Where the three basic roles have their main impact

4 Most organizations have two parallel business change agendas, both of which are required to execute the overall business strategy. One agenda is concerned with doing today s business better: deploying existing assets more efficiently and effectively, improving quality, keeping the regulators happy, and making incremental improvements to current business processes. This agenda, shown in the bottom half of Figure 2, is where Enterprise IT has traditionally contributed to the business in Provider mode, delivering IT applications and services that address well-defined problem areas. The other business change agenda, shown in the top half of Figure 2, is concerned with doing business differently. Because of its high risk/reward potential, this top line agenda is often the main focus of top business executives. Yet this is the area of uncertainty and ambiguity where the conventional Provider disciplines fail to have an impact. Given that Enterprise IT still largely occupies the Provider space, it is unsurprising that so many CIOs fail to make their mark at board level, other than in discussions around compliance and security. To serve the top line business change agenda, Enterprise IT will need to embrace the radically different roles of Promoter and Partner: Promoters investigate new technologies on behalf of the business, and they actively consider how technology developments might significantly enhance the ways in which the organization might operate and compete in future. Their stock in trade is innovation through technology. Partners work closely with the business to drive through major changes, using whatever technologies are appropriate. These changes increasingly affect the front-end of the business, producing higher-value, information-rich offerings and providing a more satisfactory customer experience. Rather than seeking to implement standard, best practice solutions, the challenge here is to create competitive edge through differentiated, often unique, solutions. Business Relationship Management Enterprise IT will have to overcome some major challenges to support all the 4P roles. These include becoming more willing to embrace new technologies; supporting a business community that is increasingly capable of deploying IT and using it to innovate the business; and ensuring that the IT function is organized, equipped and motivated to respond to differentiated business needs. To work in Promoter or Partner mode and enact top line business change, Enterprise IT must move from its traditional comfort zone into one where ambiguity, uncertainty and risk are the norm. But perhaps the greatest challenge is that all business-facing IT executives must become Business Relationship Managers (BRMs) able to turn their hand to any of the 4P roles to meet the needs of the business at the time. This requires what we term double-deep capabilities: broad knowledge of the business coupled with a good understanding of relevant technologies, including their risks and limitations. In addition, the capable BRM needs change skills and experience. Personal attributes are critically important. BRMs need a confident style that projects their authority personal power that is independent of hierarchical position. Some people have an innate ability to project themselves in this way; most will need to develop the aptitude, reinforcing their credibility with their own knowledge and experience. People who succeed in the Business Relationship Management role should be prime candidates for future positions elsewhere in the business.

5 Building and Leveraging Advanced Business/IT Relationships Innovation New technologies Business/IT strategy Handling the politics Business organization Service Change Cloud computing Enterprise architecture Risk Portfolio Figure 3 Business Relationship Managers cover a broad agenda As Figure 3 indicates, fully effective BRMs need to master a wide range of business and IT topics. Many organizations are short of potential BRMs particularly within the IT function. This has led to a growing interest in education courses aimed at building and reinforcing the necessary competences and skills. Some academic institutions offer courses that cover both business and IT at a strategic level, but most organizations cannot justify the time and cost involved. A cost-effective alternative is in-house training, and a number of companies have worked with the Leading Edge Forum (LEF) to establish BRM education courses for their key IT staff. The LEF s BRM education courses cover many of the topics named in Figure 3, but they are also designed to bring out the competences that produce outstanding performance in the BRM role. These include business acumen, strategic thinking and influencing, sifting out critical information, making judgement calls, showing initiative and demonstrating political awareness. Moving into the Executive Peer role The Peer role applies whenever senior individuals from the IT function often the CIO or the CTO are invited by top business executives to make an active contribution in matters of strategic importance to the organization. Today, the strategic impact of IT applies across virtually every sector of the economy, so the need for the Peer role is widespread. The role varies: a Peer IT executive may be asked to advise as a high-level Provider (for example, on compliance issues), Promoter (for example, where technology is a competitive differentiator) or Partner (for example, assisting with due diligence in respect of an acquisition). Personality is a critical factor. The Peer role will be most effectively applied by IT people who are outward-going and comfortable working alongside business executives, and who are keenly sensitive to company politics. They must be able to explain technology-related opportunities, threats and constraints in straightforward business language. Above all, they must be prepared to stand their ground when the occasion demands it. By making themselves indispensable at a business strategy level, the most capable IT executives will be invited to join board-level discussions on a regular basis. They then become business leaders whose portfolio happens to include IT.

6 Worldwide CSC Headquarters The Americas 3170 Fairview Park Drive Falls Church, VA United States Europe, Middle East, Africa Royal Pavilion Wellesley Road Aldershot, Hampshire GU11 1PZ United Kingdom +44(0) Australia/New Zealand 26 Talavera Road Macquarie Park, NSW 2113 Australia +61(0) Asia 20 Anson Road #11-01 Twenty Anson Singapore Leading Edge Forum Asia Pacific, Australia 26 Talavera Road Macquarie Park, NSW 2113 Australia Tel: +61(0) Fax: +61(0) The Netherlands Orteliuslaan BD Utrecht The Netherlands Tel: +31 (0) Fax: +31 (0) France Immeuble Le Balzac 10 place des Vosges, Paris La Défense Cedex France Tel: Fax: United Kingdom, Ireland, Iberia, Italy, The Nordic Region, Germany, Austria, Switzerland and South Africa Vintners Place 68 Upper Thames Street London EC4V 3BJ United Kingdom Tel: Fax: United States and Canada 3170 Fairview Park Drive Falls Church Virginia United States Tel: Fax: About CSC The mission of CSC is to be a global leader in providing technology-enabled business solutions and services. With the broadest range of capabilities, CSC offers clients the solutions they need to manage complexity, focus on core businesses, collaborate with partners and clients, and improve operations. CSC makes a special point of understanding its clients and provides experts with real-world experience to work with them. CSC is vendorindependent, delivering solutions that best meet each client s unique requirements. For 50 years, clients in industries and governments worldwide have trusted CSC with their business process and information systems outsourcing, systems integration and consulting needs. The company trades on the New York Stock Exchange under the symbol CSC. About the Leading Edge Forum CSC s Leading Edge Forum (LEF) is a global community whose programmes help members realise business benefits from the use of advanced IT more rapidly. LEF members work to spot key emerging business and technology trends before others, and identify specific practices for exploiting these trends for business advantage. Members enjoy access to a global network of thought leaders and leading practitioners, and to a powerful body of research and field practices. LEF programmes provide CTOs and senior technologists with the opportunity to explore the most pressing technology issues, examine proven state-of-the-art practices, and leverage CSC s technology experts, alliance programmes and events. For more information about LEF programmes, visit The LEF Executive Programme is a premium, fee-based programme that helps CIOs and senior business executives develop into next-generation leaders by using technology for competitive advantage in wholly new ways. Members direct the research agenda, interact with a network of world-class experts, and access topical conferences, study tours, information exchanges and advisory services. For more information about the LEF Executive Programme, visit lef.csc.com Designed and produced by CSC s UK Marketing & Communications department CSC. Printed in U.K. 04/10. All rights reserved. A recycled paper containing a minimum 75% recycled waste and 25% mill broke and manufactured at a mill accredited with ISO environmental standard. The pulp used in this product is bleached using an Elemental Chlorine Free process (ECF).