Unprecedented new governmental regulations, such as the Sarbanes-Oxley Act, increased global threats and a higher degree of vulnerability and risk have magnified the importance of information technology in growing and protecting shareholder value.
Chief information officers, the traditional stewards of IT, are at the very epicenter of business transformation-either enabling or inhibiting change. The challenges they face are of concern to all members of the corporate executive suite.
"CIO 2.0: The Changing Role of the Chief Information Officer," a new report from Deloitte Consulting's CIO Advisory Services practice, identifies the ten biggest opportunities and challenges in information technology, and outlines the essential capabilities that are required to master them.
"Today's CIOs are being asked to transform companies through information technology, a transformation that requires breaking old habits, learning new ways to do business and developing an unwavering focus on growing and preserving shareholder value," said Ann Senn, Principal, U.S. Leader of CIO Services, and Global Leader of Deloitte Consulting's CIO Advisory Services practice. "This is a challenging time for CIOs, but it is equally important that other C-suite executives focus on this transformation to ensure that IT is in alignment with the business strategy."
While the report outlines ten of the greatest opportunities and challenges in information and technology today, Deloitte Consulting views the following four issues as the most pressing for IT:
- IT and the Law: With increasingly complex regulations emerging, CIOs need to design and build business processes, systems and organizational structures that are not only compliant with today's rules, but also anticipate the direction of future regulations.
- Security and Risk: The leadership team needs to work together to identify threats; balance risk and cost; and test vulnerabilities, plans and assumptions to ensure the safety of goods, people, information and facilities.
- Business Integration: Information and technology are levers for trimming and simplifying business processes and organizations and building stronger, more effective partnerships and supplier relationships. CIOs need to work with fellow business leaders to identify the possibilities and the obstacles.
- Value: CIOs must work with their fellow business leaders shift projects and assets to areas most likely to generate returns, and shedding/streamlining assets and operations that are destroying value.
Additional opportunities and challenges include:
- Alignment = Collaboration: IT must be included at the business table to ensure that IT's role is clear and that spending ties back to business goals.
- Governance and Funding: It is critical to adopt a simple governance model that produces timely decisions, responsible actions, and reasonable results.
- IT Sourcing: Business leaders should develop a sourcing strategy based on fact-based assessments of cost and quality, core competency and effective management/control structures. Outsourcing a "problem" is may result in even more trouble.
- Performance Measures: CXOs should regularly assess and "benchmark" performance to validate internal improvement targets and identify stellar performance. Balanced scorecards are useful in balancing critical performance measures such as cost, value, quality, risk, customer satisfaction and alignment with strategy.
- Growing Talent: Senior management should make more effective use of current talent by realigning the work to match people's interest and skills. Opportunities should be created for people to learn and apprentice into specialist or master roles.
- Beyond Customer Service: As a "scarce resource", IT simply cannot satisfy every customer demand. Taking a lesson from customer segmentation and performing a critical assessment of customer IT needs, cost to deliver, and value to the company provides a mechanism for managing demand as well as supply. In addition, when customers are more aware of volumes and costs, the more responsible of those customers will meter their own demands.
"Information technology has the power to disrupt industries and transform how business is done, and many leading companies are tapping to into this power. As information assets become mission critical, the importance of collaboration between business leaders in all functions is heightened." Senn added.
A complete copy of "CIO 2.0: The Changing Role of the Chief Information Officer," is available at our Web site.