Five Quick Wins to Help CIOs Drive Growth

White Paper

Taking on a more strategic role is not an easy task for CIOs. To do it successfully, professionals will need to change their way of thinking and find a means to add value beyond operational necessity. The challenge is balancing the need to innovate and create growth with more traditional CIO responsibilities. This white paper from Sage lists five ways to help CIOs move their role from purely operational to strategic while delivering growth.

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1. Introduction: Becoming a source of growth

In 2012 fewer than one in five chief information officers (CIOs) had a seat at the top table and only 43 per cent were involved in executive decision making, according to a report by Ernst and Young(1). Fast forward two years and the landscape is changing. Forty per cent of CIOs now have final decision-making authority when it comes to spending on emerging technology, ‘The Strategic CIO’ study from the Economist Intelligence Unit found, with just 19 per cent of chief executive officers (CEOs) keeping this power for themselves(2). What’s more, with 46 per cent of CIOs in large companies reporting to chief financial officers (CFO), Deloitte claims that “supporting growth-focused business objectives may be a strategic and professional imperative”(3).

However, in a LinkedIn post, Ade McCormack, digital strategist, Financial Times and CIO columnist for the Chief Information Officer Network, questioned if professionals realise that the boardroom should be the next step in their career path(4). What’s more, Gartner found that half of CIOs participating in its ‘Taming the Digital Dragon: The 2014 CIO Agenda’ study feel that technological change is happening too quickly for them to keep up(5).

The challenge for the modern CIO is to understand their strategic role, position themselves accordingly and find ways to add value and drive growth. Professionals need a way to adapt swiftly and take their place at the top table, all while managing their traditional pain points, if they want to be successful. To this end, Sage has identified five quick wins that can help professionals live up to the expectations.

2. The strategic CIO

Technology holds considerable business value within modern organisations, meaning CIOs have a greater opportunity than ever to work as part of the executive team(6). Indeed, 70 per cent of CIOs told Harvey Nash in 2013 that their role has become more strategic(7). Garter claims that creating a “digitally savvy C-suite”, with clear leadership, strategy and governance, will be key to making the most of technology opportunities and ensuring core IT services are ready in the future.

However, not all CIOs are currently thinking strategically and are filling roles that are more operational(8). Of the CIOs polled by the Economist Intelligence Unit, 62 per cent say their employers view technology as “tactical, primarily to drive efficiencies and increase productivity”. Fifty-seven per cent also told Harvey Nash that they lack support from the board when trying to realise their IT vision(9).

Yet the tide is turning and businesses are expecting more from their IT departments, meaning CIOs have to do what they can to keep up. Paolo Cinelli, CIO at Ikea Group, told Harvey Nash’s 2013 CIO Survey: “Now that everyone understands the power of information technology and its potential impact to the business, CIOs have the challenge to fully leverage such power and ensure high positive impact, especially on business growth.” (10)

To become more strategic and demonstrate that IT can be used to drive growth, CIOs need to adopt a “business first mindset”, the Economist Intelligence Unit claims(11). This means breaking out of the traditional way of looking at things and making the priorities of CEOs and CFOs the priorities of IT. Stuart Lynn, CIO for Sage UK & Ireland, said: “If your CEO or CFO is concerned about customers and increasing product offerings, as a CIO you should be too. These are the people you’re reporting to and the ones in charge of the purpose of the business. It’s important to ensure IT is aligned with this and driving long-term agendas to add value.”

3. Win one: Develop and roll out new tech

The power of the CIO lies in their ability to lead innovation in technology(12). Indeed, Emerson Network Power found one of the most cited changes expected to occur in the role of the CIO is the development and adoption of advanced technologies . The Economist Intelligence Unit found that 92 per cent of CIOs stay current with emerging technology to improve products and services, while 84 per cent use tech to make their workforce more effective and engaged(13).

The centrality of technology in the modern world is abundantly clear; it touches on every part of a business, from financials to the customer experience. Without the right IT infrastructure in place, it becomes difficult for a company to function, with widespread inefficiency, a lack of transparency and information silos taking root.

But how does technology move from being merely operational to tactical? Stuart Lynn explained that it’s all about positioning tech as part of the long-game. “When we talk about strategic technologies we’re talking about the cloud, business intelligence and analytics - often all run through an enterprise resource planning system (ERP). These are the sorts of things that will take a CIO to the next level by creating sustainable growth and future-proofing a business. For example, by improving business intelligence it’s possible to gain customer insights, identify areas for process improvement, make projections and speed-up the decision-making process.”

Yet adopting these strategic technologies has proven something of a challenge for CIOs and many are finding it hard to combine the requirement for innovation with their core role. Chily Fachler, CIO at Encore Tickets Ltd, explained to Harvey Nash that one of the things keeping him up at night was whether or not he was striking a balance between “innovating and driving the business forward, whilst at the same time ensuring that the infrastructure, systems and applications already in place are maintained to the highest standards of performance and reliability.”

Emerson Network Power also found that the sheer complexity of the traditional CIO job is preventing many from becoming the strategic assets they are now expected to be. “While they understand priorities and what issues will have the greatest impact on business, CIOs find themselves spending most of their time simply acting as ‘IT service providers’ and doing everything they can to make sure the IT infrastructure stays up,” the company explained in its ‘The CIO of the Future’ report(15).

There is also a reluctance to rollout new technology due to the perceived cost and the time it takes. K3 FDS’s and Brands2Life Data Summary showed that when implementing a new ERP system, most companies exceed their budget by almost a fifth(16). Thirty-seven per cent were also concerned about misleading claims about project length.

Yet businesses can’t afford to run on outdated systems, which often have their best practices compromised overtime due to ad-hoc add ons.

“Organisations need to implement a robust ERP system if they want to grow,” Stuart Lynn explained. “The right IT infrastructure can transform so much of a business that it is in effect the ultimate ‘quick win’. ERP systems help companies manage complex organisational structures, run all activities through one system to facilitate efficiency and collaboration, improve data analysis, increase customer satisfaction and guarantee a quick return on investment and controlled operating costs.”

4. Win two: Treat data as a strategic asset

“Data [is] the new currency of business,” the Economist Intelligence Unit declared in its ‘The Strategic CIO’ report(17). Consequently, CIOs now need to be able to rollout technology capable of collating, analysing and extracting value from big data. “The days of the CIO being solely responsible for deploying technology to improve processes or streamline operations are [...] coming to an end,” the organisation explained.

Thirty-one per cent of CIOs expect to become the main strategists in the areas of big data analysis and advanced analytics three years from now. However, Robert Comeau, a principal with Deloitte Consulting LLP, claims currently many companies “treat data as something that a data warehouse spits out now and then”(18). What’s more, 45 per cent of mid-market companies are currently making decisions based on inadequate data, according to Aberdeen Group’s ‘Analytics for the mid-market’ report(19). “The challenge for mid-market companies is that more raw data is flowing into these organisations every day, bringing more opportunities to make effective data-driven decisions, but many don’t have the right capabilities to transform data into insight,” the paper explained. Indeed, 29 per cent of midmarket businesses believe data is too fragmented and siloed to develop a clear picture of the business.

This means businesses and CIOs are missing out on opportunities. “CIOs should consider introducing technologies that can help manage data more strategically.

For example, advanced analytics and data management tools can often improve data quality and mining capabilities,” Mr Comeau explained.

By conceptualising data in a more strategic way - aka, as the ingredients of long-term growth strategies - CIOs can better demonstrate their value.

“CIOs need to start approaching data in a new way,” Stuart Lynn said. “They need to recognise that their data is unique and contains invaluable insights into how a company is performing and how they could be performing. This applies to all data, no matter what department it’s coming from. Information then needs to be analysed across an entire company and used to answer key questions, such as what are our strongest markets? Do we have the capacity to take on more business and at what point will we need to upscale? These are all the sorts of things that can help a company plan its growth trajectory.”

Nevertheless, to use data strategically, CIOs need to improve collation, management and analysis capabilities. ERP systems facilitate the collection of real-time data, run company information through one platform, and generate reports using robust analytic solutions. This information and analysis can then be directly embedded into business applications.

5. Win three: Think about the customer

According to IMB, an increasing number of CIOs are realising they need to listen to their organisations’ customers more than any other influencing force(20). Peter Korsten, global leader, IBM Institute for Business Value, said: “The quality and nature of the front-end experience has become the point of entry to the most valuable information any enterprise can possess -- information about its customers, employees, or any other relevant constituent group.”

For CEOs, the emphasis is certainly on the customer too. Fifty-one per cent of CEOs told PwC in the ‘Dealing with disruption: Adapting to survive and thrive’ report that the customer will be in their top three investment priorities for the coming year(21). This explains why 60 per cent of CIOs claimed that explaining how technology can address customer or partner problems was the best way to articulate technology investment to the board, according to the Economist Intelligence Unit.

While the CIO has traditionally been separate from the customer, if they want to drive growth this needs to be a thing of the past. Indeed, it’s not enough to simply find ways to trim costs using technology; now technology has to work outwards to serve customers better and earn repeat business.

ERP systems can help CIOs add value for the customer when integrated with the front-office. They enable fast, simple and seamless access to data, which increases insight into the company capacity to quickly accommodate complex customer demands. Responsive and flexible systems also enable extensive workflow automation, while alerts to changing circumstances reduce response times.

What’s more, an ERP solution can support customers when placing orders, viewing stock, managing accounts, tracking orders, raising issues and updating information online. Quotes can also be created on mobile devices.

Meanwhile, with an ERP system it is easier to receive and understand inbound customer communications by routing this through the business. Consequently, relationship management is improved. Additionally, using an ERP, CIOs can report on data they don’t own, such as social media, and gain insight into consumer opinion.

6. Win four: Take a collaborative approach

Information and analysis needs to run seamlessly across an organisation, no matter how complex its structures, to ensure productivity, compliance and alignment with purpose. What’s more, departments cannot exist in isolation and need to be able to work together in order to drive growth.

To do this in an age where teams may be located around the globe, businesses need to be able to collaborate with ease. For CIOs, this means ensuring collaborative platforms can be supported. This in turn prevents information silos and people working outside of the system.

The emphasis on collaboration is not a new phenomenon. A 2006 article by McKinsey explained that the rise of globalisation and the “increasing specialisation of knowledgebased work” makes collaboration “more important than ever”(22).

A 2012 study by Clinked also found that 75 per cent of businesses considered online collaboration tools to be important or somewhat important to their company going into 2013(23). This figure increases to 86 per cent when looking at a three-year forecast. What’s more, 96 per cent blame workplace failures on a lack of collaboration or ineffective communication.

7. Win five: Take a collaborative approach

CIOs looking for a quick way to drive growth strategies should look to automation - a proven method for saving time and money that can then be redistributed to valueadding areas. What’s more, by automating processes through ERP, it’s possible to improve compliance, as complicated measurements and checks can be programmed into a system and reported on.

However, currently between 38 and 59 per cent of businesses are still carrying out repetitive tasks, according to the Independent Oracle User Group(24).

“CIOs can instantly free up resources that can then be pointed towards new revenue streams simply by automating,” Stuart Lynn said. “The business case has long existed for getting rid of manual processes and CIOs thinking about making long-term savings have to explore the opportunities automation can offer.”

The All Party Parliamentary Manufacturing Group is just one body propounding the benefits of automation.

“Introducing a new generation of automation raises our productivity and improves our competitiveness,” it said at the ‘Automation: Increasing Competitiveness and Employment in UK Manufacturing’ panel(25).

“It would unleash a new wave of creativity, allowing processes to take place with precision that was hitherto impossible. A big prize from increasing automation could be the acceleration of the reshoring of manufacturing. If part of the rationale for taking things offshore is to benefit from low-cost labour, the automation of those processes could provide a compelling argument for bringing manufacturing back home.”

8. Conclusion

Taking on a more strategic role is not an easy task for CIOs. To do it successfully, professionals will need to change their way of thinking and find a means to add value beyond operational necessity.

The challenge is balancing the need to innovate and create growth with more traditional CIO responsibilities. High impact strategies that make the role of the CIO easier, as well as delivering businesses benefits, will be key. This is where the five quick wins come in, allowing professionals to prove their value as drivers of growth and strategy. Most of the changes spring from getting the right IT infrastructure in place, enabling CIOs to quickly adapt the way the business views and uses data, interacts with customers, works with others and performs tasks. By doing this, IT suddenly becomes a strategic issue and CIOs will find themselves increasingly being part of decision making.

Tony Bailey from Vodafone explained in Your Better Business: “Underlying technological shifts, an increase in disruptive startups wanting a piece of your market share and the cost of data breaches are all compelling reasons for the CIO to take their rightful seat at the top table of executive management. In the age of the new IT crowd, CIOs are increasingly realising they are boardroom leaders – it’s a change that requires new relationships, new ways of thinking and improved collaboration.”

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