By Andy McCue, 20 October 2005 14:50
NEWS Businesses are putting their balance sheet and strategic direction at risk by failing to involve IT executives in boardroom strategy discussions, according to leading UK IT chiefs.
Research out this week shows that just one in 14 of Europe's biggest companies has a CIO or equivalent position on the board, and IT bosses say this is symptomatic of the view of the IT function as a cost centre rather than something that can provide competitive advantage.
silicon.com's 12-strong CIO Jury IT director user panel voted almost unanimously in favour of the CIO having a seat in the boardroom and being involved in high-level business strategy discussions. Just one disagreed.
Frank Coyle, IT director at John Menzies Distribution, said making key decisions in the boardroom without vital input from IT is evidence of a disconnect between the business and IT and one of the main reasons for the failure of wider strategic business initiatives.
Coyle said: "Ensuring that they connect immediately and successfully drive these initiatives begins in the boardroom. Trying to stitch IT on later is simply too late."
Having a CIO on the board of directors is the only way to ensure the IT function is fully engaged in business strategy, according to Phil Young, head of IT at Amtrak Express Parcels.
He said: "I have found from past and present experience that the IT function either delivers key business objectives or is an integral part in defining them. A company's strategic direction and balance sheet can be made or broken by poor IT engagement."
Luke Mellors, IT director at The Dorchester Hotel, said businesses will find it difficult to get value from their IT without CIO representation on the board.
He said: "Business today must start looking at IT as more then a cost centre if they are to compete and this current pervasive attitude is why so much money is wasted on misguided IT projects and initiatives that do not deliver.
"And that is the bottom line start driving the value of IT or it will cost you."
But Les Boggia, head of IT at insurance firm Carole Nash, said the issue is not so much about having a seat on the board as having influence and allies at board level.
"In my case," he said, "I report to the CFO who has a good appreciation and understanding of what IT is doing, although little technical knowledge himself, and can therefore accurately represent IT at the board.
"It is important, though, that the 'voice' is truly representative and understands the CIO issues, otherwise promises will be made which may not be able to be supported."
Ken Davis, head of IT at TV channel Five, agreed. "The discussion about whether or not CIOs should be on the board distracts from the real issue. It's not necessary to be on the board but it is important to be engaged with the business."
And one IT chief, who asked not to be named, questioned whether CIOs have the necessary skills and business acumen to warrant a seat at the top table and whether they are up to handling that kind of responsibility.
He said: "In my experience few are. Many senior IT executives never fully grasp the business aspect of their job and are more accurately described as administrators, not strategists. However companies need someone in the boardroom who has a good grasp of the company's mission and can contribute to its delivery through well thought out, strategic application of technology."
Today's CIO Jury was
Neil Bath, IT director, Brewin Dolphin Securities
Les Boggia, head of IT, Carole Nash Insurance
Stuart Brough, director of IT services, University of Strathclyde
Linda Chandler, head of IT, London Development Agency
Frank Coyle, IT director, John Menzies Distribution
Ken Davis, head of IT, Five
Tony Johnson, IT director, Virgin Megastores
Christopher Linfoot, IT director, LDV Vans
Luke Mellors, IT director, The Dorchester Hotel
Steve Noyes, CTO, the Met Office
Ted Woodhouse, director of IT strategy, Leeds Teaching Hospitals NHS Trust
Phil Young, head of IT, Amtrak Express Parcels
If you are a CIO, IT director or equivalent at a large or small company in the private or public sector and you want to be part of silicon.com's CIO Jury pool, or you know an IT chief who should be, then drop us a line at editorial@silicon.com
Comments
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1. Chris Elmes
Our group promoted ICT to the board earlier this year in recognition of its importance and contribution to our business. There is now a closer connection between ICT strategy and business goals: the potential & impact of ICT is always considered as part of business strategy and ICT investment must always demonstrate tangible business benefit before being made - just because IT can do something does not automatically mean that is should be done or that it is the most effective solution!