By Steve Ranger, 17 October 2005 14:20
NEWS The CIO must act as the link between IT and the wider strategy of the business, and not get too bogged down in technology alone.
Speaking today at the Financial Services IT Summit in London, a panel of experts warned that CIOs need to know at least as much about their business and the market it operates in as they do about technology.
Gary Price, CIO at online bank Egg, said he saw his role as translating between business and IT: "I'm an executive who happens to run IT. [My CTO] can look at the technology risks and opportunities and I look at the business side."
The perspective of the CIO has to be different to that of the IT organisation, he said: "I ask a completely different set of questions to the questions that technology people ask about technology that's emerging.
"The thing I look for is to really understand - in a way that I can explain to the board - why this technology is what the organisation should spend its money on."
Daniel Benton, partner at consultancy Accenture, said in many organisations the role of the CIO has been elevated from reporting to the CFO to being on the executive committee.
And executives from a broader business background are increasingly being appointed CIO as well as people from the IT organisation, he said. The key skill is to be able to connect technology spend to business strategy, he said: "You need someone who is the bridge between. The people that have succeeded are the people that have combined the two."
And while outsourcing is often seen as a way of better aligning IT spending with strategy, if done wrong it can open up a gap between business and IT, warned David Lester, CIO at the London Stock Exchange (LSE).
In 1992 the exchange outsourced IT and it created a gap between business and IT. "There was nothing left internally for eight years which was the wrong thing to do," said Lester. "I inherited 10 Lotus Notes programmers - and that was it. There was no connect between the business strategy and the IT strategy."
Since then the LSE has build up a team of about 20 top technology experts that act as an interface, he said.
"My IT department sits between the business and our outsourcing partner," said Lester. "The one fundamental thing we did wrong was outsource too much. Try and keep a team in house."
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1. Richard Sarson
Gosh, the penny has dropped at last, at least in financial services. That IT people should understand the business, and that outsourcing is the refuge for lazy and luddite managers.
I do wish that this message could spread further, into the Public Sector and NHS, for example, where IT remains in the old 1960's techie ghetto. What worries me is that the inmates of these ghettos seem happy with the status quo, and too idle or too arrogant to learn about the businesses they are serving.