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The role of IT in strengthening the modern corporate enterprise

By Perry Rotella, CIO at Verisk Analytics., special to Network World
August 31, 2010 03:58 PM ET
This vendor-written tech primer has been edited by Network World to eliminate product promotion, but readers should note it will likely favor the submitter's approach.

Network World - IT in the modern enterprise has evolved from a back-office component to a core operational constituent that can improve business performance and increase shareholder value. CIOs now have an opportunity to demonstrate a truly executive level leadership role in defining their enterprises.

By implementing an agile development approach, for example, IT can improve time to market for products, thereby realizing business value earlier than traditional approaches. IT also plays a central role in data management and the delivery of advanced analytics, both of which enhance competitive advantage and profitability. IT can also improve customer service excellence by implementing solutions that improve the ease of doing business. And centralizing functions such as infrastructure or procurement to optimize economies of scale not only enables more effective expense management, but frees up senior management to focus on surpassing the competition.

Today, IT is as important a discipline to the enterprise as finance, marketing and sales. In fact, IT is central to an organization's success by providing critical day-to-day operational support and enabling enterprisewide business change.

The role of the CIO, however, has not evolved to the same level in the organization. This was noted recently in The Wall Street Journal by Peter S. DeLisi, Dennis Moberg and Ronald Danielson in their article titled "Why CIOs Are Last Among Equals." The article discusses CIO shortcomings and how they can be overcome.

To truly gain peer status in the C-suite and maximize IT value, CIOs need to establish themselves as legitimate business executives. CIOs must focus on three areas to accomplish this:

1. Demonstrate executive-level leadership by taking a business-first approach to managing the technology function.

2. Balance strategic thinking and long-term planning with sound operational execution.

3. Run IT as a business within a business, taking a service-oriented approach that empowers business associates to drive their own IT agenda.

Executive-level leadership

Just as a firm's CFO uses financial expertise to drive enterprise strategy, the CIO can leverage technical expertise. A CIO who leads from a business perspective gains credibility from C-suite peers and from the CEO. A CIO who leads from a technology perspective is relegated to the secondary role of the "T guy."

How? The CIO must understand the business -- and demonstrate the ability to make difficult business decisions -- as well as anyone else in the organization. This means the CIO must know the company's products and services, profit drivers, competition and organizational dynamics. The CIO needs to develop a technology vision based on the company's business vision. Applying clear metrics to the vision makes it real and provides direction to the IT organization.

Strategy and execution

An IT strategy is not the same as data center consolidation or some other technology-based plan. An IT strategy is about enabling top-line revenue generation, margin improvement and customer service excellence. Data center consolidation can be a component of the strategy but not the driver.

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