The concept of business-IT alignment is a top priority for most CIOs around the world. But it presents a conundrum. How can CIOs ensure that their efforts satisfy a company’s internal technology needs as well as delivering value to the most important stakeholder – the customer?
Attend any IT industry conference in this day and age, and one of the hardest-pushed topics will always be the idea of ‘business-IT alignment’. The message is clear: CIOs must ensure their technology-related initiatives are supporting the business’ needs, and driving operational efficiency and bottom line. They need to ensure their work strikes a chord with marketing and finance needs. Their initiatives needs to keep their customers – and internal users – happy. Their roadmap needs to be in line with the overall vision of the organisation. Providing the infrastructure and services needed to keep things ticking over will no longer suffice.
A large part of this stems from the drive towards digitalisation. The idea that products and services are increasingly purchased online, through a variety of channels, puts IT at the fore of this change. However, it’s all well and good talking about this ‘alignment’, but what can CIOs really do to ensure this takes place, and isn’t just another buzzword?
The first step for the CIO is being conscientious in achieving a balance between strong technical competencies and all-round business and vertical-focused acumen. Deciding which should come first is a conundrum for any IT decision-maker. Christian Bartosch, Associate Director, Boston Consulting Group Middle East, appreciates that it is a tough call, but one facet ultimately takes precedence. “If there needs to be a trade-off between in-depth knowledge of technology trends and a comprehensive understanding of key business verticals, then vertical expertise should be given higher priority,” he says. “Vertical knowledge prowess is an essential requirement today, as most businesses are shifting to digital platforms. The CIO must play a key role in this process, act as a trusted adviser, and spearhead the business’ digital transformation.”
Mubarik Hussain, Director of IT, Petroserv, is in agreement. “My view is that although advanced and up-to-date technical acumen is important, a more effective CIO is one who has stronger knowledge of their specific vertical or business,” he says. “As a CIO, time will be spent discussing strategy and business with the CEO, CFO and business unit heads so understanding the business model and how to enhance it will make the CIO’s contribution more valuable to the business leaders and increase engagement with them.”
Although the majority of CIOs find themselves in a daily struggle to find an equilibrium between ‘keeping the lights on’ and growth projects, sage financial planning is needed to ensure business goals are satisfied. In order to achieve this, interdepartmental collaboration is needed, says Biswajeet Mahapatra, Research Director, Gartner. “Methods for capturing business needs early in the cycle include having business involved in the IT budget approval process along with the CFO, and the building of joint teams, which helps identify new business processes and maps technologies to enable them,” he says. “CIOs who create and champion business capability models – the ways in which enterprises combine resources, competencies, information, processes and their environments to deliver consistent value to customers – can improve their interactions with stakeholders and provide the clarity and insight that senior leaders need to produce fact-based strategic plans.”
Against this backdrop, it is essential for the CIO to play to their strengths. While issues such as IT security can easily act as a hindrance in terms of business innovation, it is important not to lose sight of the innate advantages that IT leaders hold. “CIOs have a unique vantage point,” Mahapatra says. “They have all the resources to see how business is being conducted, which function is doing what kind of jobs, how the different functions interact with each other and how customers interact with the organisation. CIO’s can easily use all this information to suggest many changes to all functions to make the entire system more efficient. They have the power to become the eyes and ears of the business, which is a huge responsibility.”
The concept of aligning IT’s initiatives with the business’ strategic objectives requires frequent and concise communication with the right partners across the organisation. These relationships and interactions are pivotal in achieving objectives. Hussain believes the foremost stakeholder who must be consulted is the most senior figure in the organisation. “The CEO is most important in terms of consultation, as he or she is the one who has the strongest business knowledge and vision for enhancing the business,” he says.
Dr. Jassim Haji, Director of IT, Gulf Air, believes the CIO’s executive peers have the power to best advise on effective decision-making, and provide broad and comprehensive perspectives on the business’ needs. “The COO, CMO and CFO are the most important stakeholders in delivering true business-IT alignment,” Haji says. “The COO can provide insights on how to improve operational efficiency, increase productivity and achieve cost reductions. The CMO can give insights on how technology can help in designing the best service or products for the customer to achieve economies of scale or scope, which will strengthen the companies’ market offering. The CFO, meanwhile, tracks and measures the return on investment and financial benefits that companies can achieve, which can lower financial risk, and help companies to obtain more attractive borrowing rates to fund future projects.”
Bartosch believes the head of the finance function constitutes the CIO’s most important ally. “Due to the capital-intensive nature of most industries, a close relationship with the CFO is necessary to make the right investment decisions – and ensure that they are based on well-substantiated business cases,” he says. “Strategic business unit leaders make up the second most important stakeholder group. Third in line is the CEO, a key stakeholder and one that requires full transparency when it comes to how well IT solutions support the business.”
In order for the region’s CIOs to fully satisfy the mandate of true business-IT alignment, it is undoubtedly useful to assess other markets in terms of their progress on this issue. While agile and scalable IT infrastructures develop in the Middle East, it is only natural that IT leaders in this part of the world experience some growing pains in fully satisfying customers. Just how far along is the Middle East on its journey to pleasing all parties?
Haji draws on his international experience to place the Middle East in a wider context. “CIOs in the Middle East are partially in-tune with business needs but there is still more to be desired,” he says. “Technology events targeted at the CIO’s level in this region show that the focus has started to shift, but these events are not truly lined up with the different business areas or domains like you see in the U.S or Europe. In these markets, focused events for one specific business domain – such as banking or aviation – take place between the CIOs and their counterpart executives.”
Mahapatra, meanwhile, acknowledges a widespread need for improvement, but realises that the current transitional phase is promising. “Like in any market, we have both kinds of CIO in the Middle East,” he says. “Some are very much in-tune with their business while some are very operational and tactical. If you look at the maturity of organisations in the Middle East, they are a little bit lower than the global level as IT departments have remained either as back offices or the data centre in the corner of the building. However, changes are happening, and will happen at a faster pace as organisations adopt digital and smart technologies. So, in a nutshell, the majority of CIOs in the Middle East are not in-tune with business but that is rapidly changing.”