A great discussion full of good analysis and some great examples from the real world and two great suggestions for new readings. Those of you who work, please continue to bring such good examples to each of our discussions. You illustrate the learnings for all of us since we each have a different point of view. I will give you my experiences, but that’s only one person who worked primarily for one companies. The more views we have the better.
IT organizations are usually the largest administrative expense in a company. In manufacturing companies, they may be only 1% or 2% of revenue but still be the most expensive support service. In banks and trading companies IT can get to 50% of revenue. For this reason the IT organization is always a target for cost cutting. It must be incredibly well run with all of its administrative processes very tight or it will constantly be second guessed.
Some CIO’s and business writers lament that CIO’s should have a greater say in the strategy of the company. While IT may be a strong strategic enabler, CIO’s need to prove themselves first to the business. If IT’s budgeting, procurement or HR practices are a mess why should senior management trust the CIO’s opinion about strategic business matters? It really goes beyond this. If IT’s projects are not being done on time, on budget and producing significant business value for the corporation, why trust IT? It may be unfair, but by being big and expensive IT puts a spot light on itself and needs to act accordingly.
Running an administratively strong organization are the table stakes for playing in the game of business leadership.
Rich
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