One of John Furlong’s pet peeves is IT employees who don’t dress like their clients.
Furlong says a key to making sure IT and business groups understand each other is rotating IT people in and out of the business groups. He cites his own experience of working in jobs on both sides of the fence during his 25 years in the financial-services industry (for example, he worked for IBM for 12 years and also headed technology development at Paine Webber).
“Cross-function job rotations are critical,” Furlong says. “Make sure that your [high-potential] people are developing a sense of different parts of the business. . . . You wind up having a whole cadre of middle-level executives who know the IT organization and are able to discern strategy.”
IT groups that don’t brainstorm and work closely with the business side run the risk of simply becoming order takers, Furlong says.
Cathy Ellwood, who runs a job-rotation program at Nationwide Financial Services, says putting such a system in place isn’t for “the faint of heart.” It can take years to get such a program really up and running, she says, as you need to do everything from defining what you want employees to get experience in, to putting an infrastructure in place to make sure your day-to-day IT operations don’t collapse when good employees rotate out. She cites an example of taking one of the insurance company’s CFO potentials and putting him over the IT procurement area, which includes handling vendor contracts and driving costs out of IT infrastructure.
“It wasn’t necessarily something that he aspired to do,” she says. “On the other hand, he’s going to bring a lot of discipline and training to that organization.”
One dicey issue with job rotations is salary. Moving from IT to another group might ordinarily mean an increase or cut in pay to align with others in the group. That can be an issue with both the employee and the department, which might not want to pay the salary and benefits, says Ellwood, who reports to the CFO. “We made a decision that each business area or IT organization where people go will cover the expense,” she says. “It’s an investment in our future.”
Putting on your marketing hat
Fred Danback, CIO for Integro Insurance Brokers, gave a presentation at the event advising his peers on how to market their services.
For one thing, IT organizations should make sure to have their facts straight, Danback says. That is, you need to know how much it costs to provide assorted services, such as e-mail, so that if an internal client wants to know what they’re actually getting for their money, you can tell them, he says.
“Chargebacks are definitely a catalyst for that,” Danback says.
It’s also important to quantify how much it costs to provide services so that your organization can charge different levels of users different amounts. Further, it can aid your IT organization in determining whether certain jobs should be outsourced, Danback says.
But marketing your IT group “is not having a communications manager telling the whole company that these are the things we’re working on.”
Danback says it has more to do with concentrating on the four Ps of business-class fame, which he listed as product, price, placement (just because you have offices all over the world doesn’t mean you need to roll out the same services everywhere) and promotion:
To market your product, you need to understand what sort of company yours really is. Danback asks: Is your company most focused on customer intimacy, operational excellence or product leadership? If your organization, like Integro, is focused most on customer intimacy, your IT emphasis will be on systems, such as CRM, he says. But other organizations, such as a financial-services company Danback used to work for, have lines of business that might fall into each of these categories.
At that company Danback says he brought in a consulting company to give his team rolling out an identity-management system a crash course on how to market it. The IT team needed to cater to the different business segments in how it marketed its offering (auditors wanted better accountability, the insurance business wanted authentication for the extranet and reinsurance group needed to exploit the network directory for single-signon).
Expanding the CIO’s role
One sure way to raise IT’s profile is by getting the CIO a seat at the table more frequently with other C-level executives, but doing so is easier said than done. Recent research shows that most CIOs haven’t been in their jobs for more than three years and that, more often than not, CEOs aren’t too satisfied with them, says Jim Court, CIO for First American Property & Casualty.
“This is not conducive to partnering with the business side or expanding the role of the CIO,” says Court, who documented during a presentation an eight-year effort on his part to take IT from being a necessary evil to being a critical part of the organization. The fact that he recently was asked to put together the company’s three-year strategic plan is a sign that the effort is paying dividends, he says.
Making headway involves first understanding the environment you’re in, he says. CIOs increasingly are reporting to COOs and CEOs rather than CFOs, which Court says is a good thing, though the real issue is whether the person you report to values technology. You need to ask questions about your organization -- such as whether risk is rewarded -- and determine whether you can really influence product development and other business decisions.
Court says that when he started at his company, all the homeowners insurance it sold was customized by state. Coming from the manufacturing industry, where product standardization is important, Court wondered why standardization couldn’t be applied more to homeowners insurance. He met with the company’s marketing people and worked to standardize the product, a change that would enable the company to roll out new offerings in closer to 30 days rather than 90, as had been the case.
“The business side immediately signed up for that . . . that’s what they understand,” Court says. “They don’t understand that we’re using Linux with Java, all the technology stuff, they don’t care. They want business value.”
Who needs alignment?
Raymond Dury, executive vice president and CIO for Fifth Third Bank, concurred that IT should be driving such efforts and not simply aligning with business on its projects.
“I hate the word ‘alignment.’ You’ll never hear me using it except to say I hate it,” Dury says.
CIOs need to be all about business when interacting with other C-level executives. “Picture yourself as being the CEO of a company that runs technology for your organization. What decisions would you make? It’s your money . . . .”
Rather than talking about how much a new service or data center is going to cost the company, talk about it more in terms of how the company will make a return on the investment or how it will provide the company with insurance, Dury says.
“Every one of my guys knows how much they have to save on their expenses or how much additional profit they have to generate for the business to get a penny a share of earnings,” Dury says. “And if you don’t think a penny a share is important, think again.”
One way for IT leaders to get heard more clearly by non-IT executives is to ditch the tech jargon, Dury says. “If you’re putting in a new MPLS network, go back to business and say, ‘Hey, good news, business video is coming.’ Don’t even give them the initials. Don’t give them the satisfaction that you’re the techie guy,” says Dury, noting that Fifth Third Bank’s IT group is self-funding a big branch-network upgrade that will support video, voice and other applications.