Traditionally, IT has been a backroom function. By this I mean that IT has typically been a behind-the-scenes function of corporate America (and the world). IT achieved center-stage status for only a very brief period of time: the late 1990s. Those years were an era of technology for technology's sake, and we saw dot-coms spring up all over the map. Regardless of their revenues and/or customers, these dot-coms had sky-high valuations that were impossible to explain or even comprehend. However, there's a key distinction between IT the way we've known it for decades - and what it's returned to today - versus the late '90s dot-coms: The dot-coms were about the T in IT (technology, that is) and not about the I (information). The purpose of this article is to suggest that we need to do two things: move past the stigma associated with the '90s definition of IT and take the real IT from its traditional place in the backroom to its well-deserved, modern-day place in the boardroom. Changing View of IT There is a recognized need that IT no longer be just an afterthought (or a neverthought!) in business today. Businesses are highly dependent upon IT, not just for efficiency and productivity but also to compete and be viable. Today's business strategy must include aspects from IT including, but not limited to:
The Traditional Role of IT Let's briefly revisit the role that IT has traditionally played in the backroom. There, IT serves a valuable purpose: to make business more efficient and productive. However, in this role, we often find that the chief information officer and/or the chief technical officer are primarily responsible for implementing IT strategies that are handed down to them from the business and process owners, including the chief financial officer, the chief operating officer and even the chief legal officer or chief communications officer. While there's nothing inherently wrong with this traditional IT role, businesses face some challenges, including:
The Strategic Role of IT As IT makes its way into the boardroom, however, it can serve a more valuable purpose within the organization. Specifically, IT can help the organization better integrate as a whole, align its various parts and proactively compete in an ever-changing and more aggressive competitive landscape. IT and can even drive corporate strategy in technology-dependent companies and industries. Industries that have benefited most from recent advances in information technology and its ability to provide competitive differentiation include financial services (banking, insurance, mortgage), healthcare, pharmaceuticals and retail (online and offline). It's critical that boardrooms adopt and adapt to IT's new strategic role as follows: 1. Recognize the strategic role that IT plays within and for the organization 2. Incorporate the IT function as a board-level function 3. Gain a better and broader understanding of IT among both IT and IT board members 4. Provide IT with the business information it needs to be more effective at serving business needs In other words, take IT from a servitude mindset to a partner mindset by establishing the tone from the top, where actions speak louder than words. When board members realize and recognize the value of IT, the rest of the organization is more likely to follow. Roles and Responsibilities I've outlined thus far how IT can help the business by growing beyond its traditional role of just serving the business to being a partner, and in some cases even a driving force. With this power comes great responsibility. Specifically, expectations of IT will transform, and it's for IT to step up to the plate to enable business functions including, but not limited to, governance, risk management and compliance:
While a comprehensive list of IT-specific regulations is neither feasible nor required, here are some sample regulations that have a significant implicit reliance on IT:
IT Governance, Risk Management and Compliance IT Governance is the enablement of corporate strategy by ensuring alignment between corporate goals and objectives, and those of the IT organization. IT alignment refers to the ability of the business to integrate its wants and needs with the capabilities of IT, and to create a gestalt between the two. IT risk management embodies two concepts: one, managing and mitigating risk within and impacting the organization using IT as an enabler of better risk management techniques including automated internal controls (e.g. workflow) and competitive business strategies (e.g. Web-enabled). And two, managing and mitigating risk inherent in IT itself using, for example, risk management and mitigation strategies and frameworks like the Committee of Sponsoring Organizations of the Treadway Commission, the National Institute of Standards and Technology and 8015. IT compliance also takes on two forms: one, assisting and enabling regulatory compliance by providing tools, technologies, standards and frameworks for the organization to adhere to regulatory requirements, including records retention and document management. And two, IT itself adhering to regulatory requirements and industry best practices including, for example, disaster recovery and business continuity. These, in turn, enable better risk management as well. Integrating IT Into the Boardroom So how do we go about accomplishing the potentially daunting task of integrating IT into the boardroom so the board and the executives are able to set the example and lead the way in recognizing the importance and value of IT throughout the organization? Here are a few suggestions:
Ultimately the success of companies today lies in their ability to seamlessly integrate the various business functions. Viewed that way, IT should be treated no differently from the rest of the organization and should have its place at every rung of the corporate hierarchy, from the backroom to the boardroom. [WEBINAR: Taking IT from the Backroom to the Boardroom!] |
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