I was reading a blog from a while back on the HBR Blog Network called “The Four Personas of the Next-Generation CIO.” It was amazing to stop and think about how much has changed since the blog was written a few years ago. While the issues for the CIO remain basically the same as in the blog, what the CIO role looks like today and where it’s headed appear to me to be very different.
The blog looks at four CIO personas where the “I” stands for infrastructure, integration, intelligence and innovation. Author Ray Wang says his research firm at the time was seeing different approaches one of which was the CIO updating their skillset so they could fill all roles. That’s what I see happening today. We’re starting to see businesses recognize that IT is one of their largest investments so the CIO is actually a chief “Investment” officer who needs to understand that the mechanical method of selecting and managing investments is not appropriate for today’s digital environment.
In this digitalized world, the environment is interconnected and agile so the business needs full visibility and financial intelligence across portfolios so that smarter investment decisions can be made in a shorter period of time. The CIO who is able to embrace digitalization and effectively manage the investments will have a strong future.
Of course, there are challenges. While business growth rests on its ability to invest, organizations simply don’t have the needed capacity – it’s being eroded by rising operational costs. CIOs are then asked to do more with less and they can’t do that with yesterday’s methods of managing IT.
In working with UMT360 customers, I find that organizations need the right tools to manage their investments. The tools must cover the entire lifecycle including opportunity generation, prioritization, resource optimization and tracking. They must be designed for today’s networked organizations moving at high speeds. There are 5 factors that the business can look at to see how well they’ll be able to manage their IT investments.
- Integrated Investment System – Organizations cannot afford to make decisions in a silo-mode any more. You must understand the benefits of integrating all business and IT investment and operational aspects within one decision model.
- Financial Maturity – The business must have financial intelligence to make decisions. Inaccurate and stale financial information violates the integrity of the investments and impacts the ability to know the total cost of ownership and understand what drives the cost of IT.
- Agile Resource Allocation – The business and technology environment is constantly changing and gone are the days when looking at investments once a year is enough. Successful businesses are able to address changes and dynamically re-allocate resources to ensure stronger ROI.
- Enterprise-wide Transformation Roadmap – Failure to have an enterprise-wide transformation view not only violates the time integrity of the investment decisions but eliminates the ability to readjust the plans when things don’t go as expected. Lack of synchronization leads to disjointed investments that ignore the common time element.
- Product-based Management – Businesses need to look at projects not as discrete investments but releases that are part of a free flow of investments that improve the firm’s capabilities.
The CIO who has embraced digitalization and the opportunities it provides will be able to lead their organization’s digital revolution. This CIO, a Chief Investment Officer, is the driving force behind today’s new Enterprise Portfolio Management which meets the strategy imperative that all IT investments are systematized and integrated with the business.
How do you build a winning IT Investment Portfolio? Click here to view a recent complimentary UMT360 webinar which included steps CIO’s can take to do just that.