Is it time to change the title “Chief Information Officer”? It is not the title but the arcane thought behind it. More importantly, the thought process it drives. If an IT organization is going to be an “internal business”, then the CIO must become CEO of that business. However, a better title would be “Product Manager”. Let me explain why.
IT is an internal business
The advent of information technology into businesses was to crunch numbers – the first computer was a calculator. A little maturity later, IT became “Management Information Systems” or MIS – the department people looked towards to generate reports for them. Businesses came to realize the importance of “information” and consequently, the value of information technology in generating “management reports”.
It would be an understatement to say that we have moved a great distance from that point. Information Technology is intertwined with the business now. It is no longer a “nice to have” but a ubiquitous “necessity”. However, unlike office furniture, this necessity is a strategic weapon. This is the one thing that can fundamentally change every aspect of a business model – the DNA on which businesses run and, more importantly, succeed!
In this backdrop, the title CIO does not do justice to the role of “Head of IT”. The responsibility is no longer for just “information”. It is way beyond that. More importantly, its focus and emphasis has changed from just delivering “information” to delivering “business value”.
This business’ product is applications
Not information, not infrastructure, but Applications. Applications run on infrastructure and consume, create and move information. However, they bring together all these underlying elements to create business value.
By definition, a “product” or “offering” is something that one can “sell” for a “price” i.e. the idea of value creation is intrinsic to a product. It is not that manufacturing or customer contact centers are not important to a business. However, value creation and exchange comes from a “product” or “offering” – everything else contributes to it!
Consequently, IT’s product is its applications. This is what it “sells” to its customer, the business.
Success comes from creating profitable products
A business succeeds or fails by virtue of its ability to create products its customers want. To be accurate, “want to pay for”!
This requires understanding your environment – customer needs and wants, competitors, partners, etc. – and your core competencies – what is it that we do the best? What is it that we lack capability in? Profitable products result when businesses wed the two i.e. leverage their core competency to address a need in the environment.
Hence, the key to IT’s success is in identifying which applications create the most value for the business and deliver them – on time and budget.
The CIO’s responsibility is not to buy servers and databases or to keep the infrastructure up. Their responsibility is to envision, create, deploy and maintain applications that create value for the business. The latter requires the former but often the focus is forgotten. That is when we get “IT for IT’s sake”!
Does this make a CIO a CEO?
IT is an internal business but not a Profit and Loss or P/L center. Its market is the business. Its profitability is buried in the books of the business. What is a CEO without P/L?
Hence a CIO, the head of an internal business without P/L, cannot be called a CEO.
However, a CIO is an IT Product Manager. The job responsibility of an IT Product Manager is to:
- Identify and select market opportunity. That is what an IT Strategy does for a CIO.
- Build and deploy profitable products and manage their lifecycle. That is what applications development and maintenance does for a CIO
The title conveys a subtle but meaningful change in the expectations of this role. It now demands that the focus shift from “delivering information systems” to “creating business value”.
It is clear that the time has come to take a fundamental look at the role IT plays in an organization – arguably, this ball is already in play at many innovative organizations. The search for a new paradigm must also include a recognition that roles and responsibilities, and associated job titles, must also change. Job titles make a difference because they create a sense of purpose to their holder and, convey the roles and responsibilities to the audience.
Will a CIO who is called Chief IT Product Manager be more successful? Probably not. However, one who understands the difference in responsibilities of the two will be.
About the Author:
Sourabh Hajela is a management consultant and trainer with over 18 years of experience creating shareholder value for his Fortune 50 clients. His consulting practice is focused on IT strategy, alignment and ROI. For more information, please visit http://www.startsmarts.com/. Or feel free to contact Sourabh at Sourabh.Hajela@StartSmartS.com .