In tough times like these, CIOs need to do a number of things to be successful.
A key tactic is to be as proactive as possible about integrating IT into the business. That means getting your staff out of the IT dungeon to interface with business teams and clients. This type of initiative shows you are interested in partnering--not power and fiefdoms.
The key here is to create and hone an agile IT organization--one that doesn't necessarily own the resources the business requires. Instead, CIOs should work with the business units in need and teach them how to manage the IT, not create controls that keep the business from getting things done. In the end, it's a lot more powerful when you're influencing rather than controlling.
But how do we do it? How do we really integrate IT and decide what operations should be considered for decentralization? This relates to my concept of "drivers" and "supporters."
Drivers are IT operations that help change the relationship between the IT shop and its clients. Drivers are more daring operations and either directly or indirectly can be credited with some form of revenue generation. IT projects in the driver category are likely to be less stable because the market generating the requirements is less defined and subject to change.
Supporters are commodity IT functions--back-end processing, network operations, help desk operations--that are less subject to market fluctuations.
Decentralization and integration are more important in driver operations than in supporter departments, simply because they need to be more directly involved with the dynamic aspects of market requirements. Thus, driver IT functions are the candidates to integrate.
Here's how to make it work.
As a first step, move driver personnel to the locations of those operations. This will allow those IT staffers to get a better understanding of what the business unit is about, what its challenges are and what the customer needs. This relocation will also allow the business unit staff to understand more about what IT needs to be successful--in effect, you are building a more organic relationship and aiding the creation of new cultures among multiple staffs.
Second, have the relocated IT staff report directly or indirectly to the business unit. This can be accomplished in a number of ways; for example, having IT staff evaluated by the business or having dotted-line reporting structures with the business. The boldest, of course, is to have your personnel report directly, with you being in a leadership role, providing guidance and support with your counterparts. That creates real value.
Third, be careful with budgets, and do not confuse IT budgets with limits on spending--they are two very different things. In driver operations, budgets will not likely mean very much because the market can be very unpredictable, so you need to be very agile with available resources. Having a fixed budget for driver projects typically results in cost overruns because of user changes, so you need to work very closely with the business managers. You also need to have resources available when needed; telling business units that you can't support their initiatives is not a winning hand. My point here is that decentralization helps combat misalignments of business requirements and IT resource planning.
A number of CIOs have told me that they have tried forms of decentralization. However, after careful examination of the details, I found that the management and controls were still fostered by IT. You must let go--managing without controlling results is something we call leadership.
Think about it: You won't disenfranchise IT--rather, you'll strengthen the importance of technology and your importance as a business leader.
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