Thursday, July 03, 2008

Best Practice: 5 things that the CIO should focus on

Following are the 5 things that the CIO should focus on in the current environment.

1. Focus on the Demand Side of business
As per my earlier Video Blog on the Changing Role of C-level executives - CIO need to focus on the two sides of the business - the demand and the supply side of busienss. Today most of the CIOs are focusing on the supply side, i.e. helping reduce cost, timely delivery of projects, outsourcing and off-shoring and so on. Yes! COIs do also focus on the Demand side - but not necessarily the primary focus for majority of the CIOs.

The demand side basically means focus on the business demands for new or modified solutions and widely known as Business Agility (read my take on Defining and Measuring Business Agility). CIOs would do well to establish the Business Architecture discipline within the Enterprise Architecture team to help understand and prioritize the demand side of the business.

2. Establish a strong centralized function
Agreed that the LOB-IT is essential to provide adequate services at the business level, there is also a need for a strong centralized function. The two primary centralized functions would be:

Program Management Office: The leadership of the PMO should be close (preferably at the same location) to the CIO and the the others close (at the same location) of the LOB-IT. I have seen multiple examples of remote and distributed PMO organizations which has not worked very well. It not because of individual capability - in my opinion, there needs to a face to face discussions between the PMO, LOB-IT leadership team and LOB - Business Operations teams. The PMO should work in partnership with Enterprise Architecture team to help prioritize and optimize the enterprise (instead of at LOB level).

Enterprise Architecture: This is a key function and once again like the PMO - the EA team, especially the Business Architecture team members need to be close to the business. One more point to note - this is the only team in IT that is paid and expected to look at the long-term picture (not just of the current FY or quarter) as well as influence the optimization of the Enterprise.

Other centralized functions would be IT Operations, Application Development (works for some organizations) and QA/RM teams.

3. Outsourcing
As Ashok pointed out in is blog on SOA and Outsourcing - Despite many of its shortcomings, outsourcing is here to stay. Sometimes, due to resistance from direct reports and other organizations dynamics - CIO may sometimes differ outsourcing (and off-shoring) some of the non-core functions such as Data Center Management, Help Desk and Application Support.

I agree that outsourcing is a difficult decision but a required one. Make sure that you have adequate controls and process in place and one key learning (based on my experience) - the first few months the service may deteriorate or take longer - until the outsources/off-shore team comes up to speed.

4. Enable Innovation
This is a key ingredient for success - not just within IT but also within Business. One of my observations is that some/most IT organizations have a tendency to throw cold water on solutions put together by tech savy business folks. The typical push back from IT are statements like:
  • we were not involved so we cannot support this
  • we have no idea what it does and it's impact in the data center - so we cannot take ownership of this
  • we can redo the entire solutions the right way and it would cost $$$$
  • ....
The CIO needs to step in and make sure that IT organizations do accept and support business solutions - even if they were build by tech savy business folks.

5. People
The key primary assets for any organizations are it's people. The CIO needs to cearly define and communicate the IT principles, identify primary and secondary (that could potentially be outsourced) organizations as well as provide adequate training.

These are the 5 things that the CIO should focus on for establishing a Strategic IT.

As always, your comments are welcome and please feel free drop me a line.

Yogish Pai
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