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By Mark Livingston, Cognizant Business Consulting
Faced with globalization, mergers, competition, new markets and new technologies, CIOs are becoming something akin to turnaround experts. That is, they are transforming the nature of the IT function within their organizations by improving business processes to adapt to market conditions and enable a higher degree of agility and competitiveness.
This transformation is captured well by Geoffrey Moore, author of "Dealing with Darwin and Crossing the Chasm" and managing director of TCG Advisors, who agrees there is a fundamental change IT organizations must face to be financially and operationally successful in today's business climate. To be innovative, CIOs must move from deploying mere transactional processing systems to deploying interactive processing systems that enable communication and collaboration. "To achieve breakaway innovation requires a highly coordinated effort across the entire enterprise," Moore writes in "Dealing with Darwin."
The Business-Minded IT Organization
It is clear that IT is being driven to be more strategically involved in the business side of the house. As with any evolution, this shift poses some new challenges -- not the least of which is finding business-minded or business-savvy IT staff who understand the new demands of transformational IT.
Some CIOs are requiring their staff to become an integral part of the business organization by getting involved in decision-making. Interacting with internal customers also allows IT staff to increase their business knowledge and prove their standing as a partner in transforming the business.
Transformational CIOs are making their mark on the business as a whole, rather than operating in an IT silo. In an informal survey recently conducted by Cognizant among nearly 100 clients and prospects, nearly two-thirds of the respondents reported that the global economic reset has created a subtle shift in their business model and caused them to adopt more modern and adaptive platforms to support new business initiatives and opportunities. Whether it's making subtle shifts to their company's fundamental business model or forcing a radical overhaul of their core business and IT platforms, CIOs realize they must have a seat at the table to discuss larger business issues.
Challenging the CIO
Even after a company aligns business and IT agendas, there are significant challenges -- particularly when it comes to measuring the business value of IT services. Providing business with the tools and insights it needs is what makes a CIO transformative and, therefore, what makes them invaluable to the enterprise.
How can CIOs overcome challenges while becoming a more strategic partner to the business, and helping to improve business processes? The answer is that they can't do it alone.
A trusted, global services provider plays a vital role here, in part by helping an organization locate talent around the world, and infusing new ways of thinking to develop and deliver systems and services more cost-effectively and efficiently. Further, because of their accumulated domain knowledge and best-practices discipline, global service providers help instill operational flexibility into a virtually distributed enterprise.
No discussion of CIO challenges would be complete without mention of the IT skills shortage, particularly specialized skills. In the U.S., this challenge is becoming acute. Executives are looking overseas, but a global talent search has its own challenges, such as where to look and how best to tap into the region.
That's where global services providers can come in to help CIOs overcome a skills shortage by leveraging the best talent possible, wherever it may be, to achieve results previously unattainable.
Partnering for Business Innovation
The alignment of business and IT goals and agendas is still a work in progress at many companies. That highlights another IT challenge: being empowered to help bring business innovation to the enterprise.
The amount of discretionary budget CIOs will allocate towards innovation projects that deliver new business capabilities and utilize alternative delivery vehicles like virtualization is still limited, according to the Cognizant survey. Nearly 75% of respondents said that less than a quarter of their 2010 IT budget will go toward these projects. This response further supports the importance of partnering with a global services provider that can help reduce IT spend, so that CIOs can leverage the savings to reinvest in their business with innovative technologies.
While the reasons are varied, the trend is clear. Global outsourcing is now a crucial element of corporate IT strategy. CIOs turn to outsourcers to contend with budget cuts, IT talent shortages, and the need for domain-specific or technical expertise, freeing them to pursue a truly transformational IT agenda.
Mark Livingston is senior vice president at Cognizant Business Consulting.
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