CIOs need to do more to ensure that IT plays a role in business transformation in an environment where 70 percent of CEOs believe that business change and entrepreneurialism will increase in the next five years, according to Gartner, Inc.
“When organizations have to navigate a business transformation, the IT organization is usually in the middle of it in some way, either as a key enabler or a key constraint,” said Jorge Lopez, vice president and distinguished analyst at Gartner. “CIOs rarely have a leadership position in a change of this scale, and they need to prepare more vigorously to ensure that IT does its job to advance strategic change.”
Gartner has identified 10 questions for CIOs to ask when they are in the midst of a transformation in which a focus on strategic change could help:
1. What type of change is happening? CIOs must begin by planning ahead for the contingency that a strategic change effort is or will be under way. Likely causes of a strategic change might include the creation of new ventures, dealing with innovation and change, managing mergers and acquisitions and addressing new competitive pressures.
CIO Action:Write down the top three most likely major changes ahead in your business and industry and lay out all the different areas of the IT organization and of the business that would be affected and require IT action in order to succeed. Take the list and prioritize it according to the impact it could have on the business.
2. Who is driving the change? The preferred sponsors of a major change would be the CEO and, alternatively, an executive who is on the top management team, including the COO and the CFO. If the change is restricted to a particular business unit, the top manager in that unit is the preferred sponsor.
CIO Action:Identify the top-level sponsor for the strategic change. If you don't report to the top-level sponsor and have difficulty gaining access, concentrate on the circle of trusted advisers around the sponsor. Use the connection with this group to develop a line of communication that will be helpful in times of stress during a strategic change.
3. What is the deadline for the change? In most cases of strategic change, there is a “window” for execution for the achievement of the goal. This can be impacted by a number of factors including public pronouncements of the CEO to investors, board of director expectations set by the CEO, letters and announcements made to shareholders, information gained from competitive intelligence, as well as public competitor announcements and analytical conclusions drawn by financial analysts covering the
company. CIO Action: Keep up to dateof viewpoints both inside and outside of the company as it can be useful to have alternative scenarios at hand should conditions shift.
4. What are the constraints to the change? In the midst of any new idea, the forces against the successful execution of the strategic change are always in place. Gartner advises CIOs to ensure they are a part of the coalition driving the change and work to expand it further to improve the chances of success.
CIO Action:As you arrive at a list of the key tasks for the IT organization in a strategic change, look to the different constraints within your organization. Line up actions in your project plan to eliminate the constraints.
5. How complex is your infrastructure? One of the greatest issues in managing strategic change is the complexity of the IT infrastructure from applications to the distributed systems supporting business units. CIO Action: Take inventory of how many different applications and technology platform stacks you have in your organization. Map how many of the applications actually have large redundancy of capabilities that can be consolidated, and calculate the cost savings and other benefits to enhance future change.
6. Where are your people? One of the most difficult skills for IT leaders is the ability to discern how their people feel about an upcoming change. CIOs need to focus on the process by which people actively take on a change to the environment to which they have become accustomed. In any given organization, approximately 10 percent normally reach out for change, while another 10 percent fully reject any change.
CIO Action:Identify the top 10 percent change seekers in your organization and put them into roles where they can have considerable influence in effecting future strategic change.
7. What is the impact on stakeholders? During a strategic change, many stakeholders are affected - from the executives who support the change, to the knowledge workers who must shift to a new way of doing things. Identifying these stakeholders is crucial to understanding how to move the strategic change forward. Once the stakeholders are identified, the impact of the change on each of them must be understood in very personal terms.
CIO Action:Build a formal view of the organizational structure that should exist after the change, so you can get a clear picture of the individual fates of the stakeholders moving forward.
8. How are decisions made during a strategic change? The decision-making process is different during a strategic change, as governance structures made prior to the change are redesigned and rebuilt to reflect the future realities. An example is the temporary team built to assist in the integration of two companies during a merger.
CIO Action:To have some influence on a decision, take a look at the decisions to be made and list all the stakeholders who either will find themselves impacted, or have information, perspective or expertise about the decision. Reach out directly to those who are in that circle, and make it clear that you want to know which way the decision appears to be heading and what you can do to either accelerate its outcome or help revive the initiative if it is rejected.
9. What is the impact on key and mission-critical processes? Clearly the impact to mission-critical processes must be taken into account for the change to succeed. Among those processes are change processes, such as identifying, designing, and implementing new systems, plus processes associated with sales, service and support.
CIO Action:Identify the mission-critical processes most likely to be affected by the change, and redesign them as required by the business and other external requirements. Ensure that you are plugged into the committee that controls decision-making on process redesign.
10. What are the mind-sets of the organization, and what do they need to be? One of the difficulties in strategic change is the resistance of some managers to the idea that cultural mind-sets are to be taken seriously, and yet it is the management of this that most determines the success or failure of a strategic change.
CIO Action:When thinking of mind-sets, make sure that the new mind-set is materially different from the one you want to displace.
Additional information is available in the report ‘CIO Advisory: Top 10 Questions You Need to Ask When You Are in the Midst of a Strategic Change’. The report is available on Gartner's website at http://www.gartner.com/resId=1445323.
Gartner Says it's Time for CIOs to Play a Bigger Role in Business Transformation
October 27, 2010