CIO’s First 100 Days – Creating Value in IT Supply Chain
Author: John Fisher
You are a new CIO, it could be your first CIO job or you may have been in that seat before. Whatever your situation, you are now in a new job and you need to make an impact on your new organization. The saying, “you only have one chance to make a first impression” certainly applies to your situation. Without a doubt, your organization will be looking for you to build value and whatever you do, you will make a first impression (either positive or negative). Here are some tips from the trenches to help you make that first impression a positive one.
While there is always a “honeymoon” period for a new CIO, it doesn’t last long and in almost all cases you have been brought into the organization to address one or more pressing problems, so taking positive action to create real strategic value for your company is the first order of business for a new CIO. The specific pressing problems can be many, and varied. You may have a failing infrastructure from years of under spending, your IT group may have trust issues with the other departments within your business, and you may have both issues and possibly more. The one thing that is certain for a new CIO, your CEO and CFO are either asking or thinking, “Why are we spending all this money on technology? And what are we getting in return?”
Whatever the problems or issues you have inherited from the past, you need to move forward and by focusing on three key areas, you can be sure to create a positive first impression. It would be nice if you could focus on one at a time, but in reality you need to address all three areas in your first 100 days on the job. The three key areas are:
1. Helping the organization make better strategic decisions
2. Improving the business processes
3. Add strategic value to the organization
Oh, yes, and in the meantime you need to fix any and all technical problems, but in almost all cases the issues are related to people and relationships rather than technology. While I’m certain you are the smartest guy in the room, you can’t fix all the problems yourself. You will most definitely need to bring in some experts, either internal or external, to help you and your business make progress. For example, if you don’t have a technology troubleshooter, hire one to focus on making your infrastructure bullet proof because you won’t have enough time or energy to fix the technical problems and address the business/people/relationship problems.
Make Better Strategic Decisions:
We would all like to think we make good decisions, but NET(net) conducted research with 504 client opportunities between January 2010 and June 2012 and it shows that the Strategic IT Supply Chain is sub-optimized 96% of the time. What? You are not in manufacturing so you don’t think you have an IT Supply Chain? Think again. You are a critical part of the IT Supply Chain for your organization. You outsource some part of your IT function to another organization, you provide products and services to your business that were created and supported by a third-party supplier, and you map the needs of your organization to your technology capabilities. You are managing a huge strategic supply chain for your business, and it you are not thinking of your IT function as part of the supply chain you need to think again.
The decisions you make about technology products and services have a significant impact on your business and improving the way your organization makes strategic decisions can move you from being a CIO who is viewed as “the IT guy” to one who is a partner with the business. As the new CIO, you need to adopt a policy of “ask don’t tell”. While I’m sure you have the answers to all the problems of your new organization, you will be much better served by asking your business leaders what they need rather than telling them you have the answer. Making strategic decisions doesn’t mean you make quick decisions or that you have all the answers, it means that you have taken the time listen to your business leaders, mend any broken relationships and work with them to build the future IT capability. You will, of course, need to assess your current IT capability. You need to know what are you spending money on, who are your strategic suppliers and who are your suppliers that are focused on taking money out of your pocket. This leads us to the second key focus area, improving the business process.
Improve Business Processes:
Most organizations have broken business processes. Your job as the new CIO is to find those broken processes and provide solutions. And by business processes we don’t mean just the processes in your business areas, we also mean your IT processes. It is certain that as a new CIO your IT processes are broken, and the best way to approach mending those processes is to view IT as a business. I know you have heard this before, but treating your IT function as a business is critical to gaining credibility with your business leaders.
Obviously there are also broken processes in the business areas, but if your own department is not functioning well, your suggestions on how to improve other areas will not be well received. Look at each of your critical processes and based on the idea that IT provides products and services that should meet the business needs and improve the Strategic IT Supply Chain. Measure each of the processes against the Key Performance Indicators (KPIs) of the business and how that process improves those KPIs. If the process doesn’t improve any KPIs then it will need to be changed or eliminated. Most organizations have “that’s the way it’s always been done” processes which had little value to the organization and increase the cost of doing business. Find the non-value process and eliminate or alter them in your own area before going to your business leaders, who will be much more receptive to your ideas because you have already proven you can improve your own business.
Add Strategic Value to the Organization:
Helping your organization make better strategic decisions and running your IT function as a business will both add strategic value to your organization, but you can’t stop there. Running your IT function as a business doesn’t mean that you have to make a profit, but it does mean that every process and decision you make must advance the business forward which is what the leaders of every business function strive to accomplish.
All CIOs have been under pressure to reduce costs over the past few years, and many have found ways to improve their IT business model by eliminating unnecessary costs. The NET(net) market research mentioned earlier not only showed a sub-optimized IT supply chain, it also indicates that on average –85% of the value which can be obtained by optimizing your IT spend is what we call Latent Value. That means it is not recognized as an expense that can be optimized. This is analogous to the “it’s always been done that way” syndrome. What applies to non-value add processes also applies to the way CIOs manage their strategic IT suppliers, and the value this brings to most organizations can be substantial.
One side benefit to optimizing your Latent Value is that you can free up funds which can be applied to projects which move the business forward. It is like finding money you didn’t know you had, and nothing improves the alignment between IT and the business like providing services the business did not expect could be done within the current budget.
Being a new CIO is a challenge which can be incredibly rewarding both for the new CIO and for their business. Focusing your initial efforts on the three key areas (making better strategic decisions, improving the business processes and adding strategic value to the organization) will ensure that the first impression you make is a positive and impactful one.
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