In the past, the prevailing profile for successful CIOs and their staff revolved around technical expertise. Not much time or effort was spent developing soft skills and business acumen.
In retrospect, it is not hard to understand why some CEO/CIO relationships floundered or broke. Expectations were misaligned, primarily because IT professionals did not respond to the changing marketplace. Simply put, IT roles and accountabilities were too narrowly defined to meet present business needs.
Today, IT leaders and teams face a completely different set of expectations and challenges. A November 2004 CIO update from Gartner Research found that nearly two-thirds of CEOs and CFOs believe the most critical skills for IT management success are:
- Strategic thinking and planning
- Understanding business operations
- Ability to articulate the value of IT as related to business objectives
No mention of technology. So what are business leaders really looking for? IT professionals who can align solutions with business needs.
The right skills
Due to this changing marketplace, many companies are shifting IT hiring criteria toward the following soft skills and interpersonal competencies.
- Business acumen
- Change management
- Emotional intelligence
- Process understanding
- Negotiating and communications
These business management skills are so essential that many companies have placed a business leader in the top IT position to speed the transformation from technology-oriented to business-oriented decision-making.
Ideally, IT should be viewed as essential to achieving strategic business goals. Securing the right people for the job is the first step.
Reviewing behavior of the IT organization is also critical. Behaviors of the past are not the behaviors that will enhance IT contributions to business objectives today.
C-level executives might consider the following.
- Executive relationships -- Does your CIO have a healthy relationship with your CEO? Is there a spirit of collaboration among executives? Is someone in a position of authority within the business a sponsor of IT?
- Business planning -- Is IT included in business planning? Participation is essential to help IT understand business initiatives that may benefit from IT solutions. If IT is an afterthought in business planning, opportunities for creative IT solutions will be missed.
- Change management -- What role does IT play in leading organizational and/or business process change? Are senior IT leaders accountable for change management successes or failures?
Business-minded IT executives -- working closely with operational executives -- are critical to improving overall business results through effective change management.
- IT accountability -- When delivering solutions, does IT only answer to IT? If so, how does the business participate in the IT solution delivery process?
Ensure that both business and IT are held mutually accountable for success.
- IT portfolio management -- Who decides which IT projects to perform, and in what sequence? Simply put, project selection is critical and must be adaptive to ongoing business changes. Cross-functional executive collaboration and quarterly reprioritization are recommended.
- Communication -- How do you inform employees about IT contributions and corresponding business impacts? Employees need to know how their contributions improve the business. Business units need to hear what IT is doing and why.
- Defining success -- How does IT define success? Do they think, speak and measure IT achievement in business terms? If your data center manager is talking to the CFO, does he say, "We just successfully installed a Cray super-computer"?
Or does he say, "We now have the processing power to complete the monthly accounting close process three days earlier"?
These subtle behaviors are difficult to instill, but they are powerful strategies for aligning and demonstrating IT's business value on a daily basis.
Bill Hazelton is vice president and area director for CIBER in Michigan and Wisconsin, and can be reached at (248) 352-8650 or at firstname.lastname@example.org. CIBER Inc., founded in Detroit, is a global IT consulting firm which builds, integrates and supports critical business applications in custom and enterprise resource planning (ERP) environments. Visit the company's Web site at www.ciber.com.
The case for the offshore outsourcing of IT services can be compelling when you look at labor rates alone. Organizations do have an obligation to shareholders, customers and employees to survive and remain competitive, even if this means reducing costs by outsourcing.
The question, then, is not “Should U.S. businesses take advantage of lower costs?” Instead, the question must be, “Can IT services provided by U.S.-based technology professionals be competitive?”
The answer is yes.
Many firms jumped on the outsourcing bandwagon after hearing tales of miraculous cost savings. Work that would cost $100 an hour in the U.S. could be done for $20 an hour in India. For some firms, offshore outsourcing did work and did reduce costs. However, for many others, offshore outsourcing held unforeseen costs.
When we look closely at offshoring, we find that it is not an apples-to-apples wage comparison. There are many hidden costs to consider. Cultural factors such as language barriers, time zone differences and cultural misunderstandings are the most obvious problems. Political factors, such as military tensions, infrastructure failures, geopolitical risks and issues with foreign legal systems also make offshoring less appealing. Other factors, such as quality control, compliance, institutional knowledge gaps and loss of control can further lessen offshoring’s appeal.
Organizational incompatibility causes problems as well. Many offshore IT vendors possess level 5 SEI Capability Maturity Model (CMM) certification. However, a procuring organization certified at CMM level 3 must consider whether its own internal processes are mature enough to stand up to the demands of a level 5 supplier.
Don’t forget the costs of data communication and travel expenses. And, finally, add in the fact that demand for labor in India where 90 percent of offshore IT work is done has increased dramatically, causing double-digit wage increases and high employee turnover.
All of these costs increase that low initial billing rate, reducing potential savings significantly. Clearly, there is a strong case for using offshore services for those firms that have worked out the kinks. However, for firms which have had a bad experience with offshoring, who face public backlash because of offshoring or who cannot use offshore resources because of intellectual property concerns, there is another alternative: low-cost domestic outsourcing centers.
Low-cost domestic outsourcing centers offer a compelling alternative to offshore outsourcing. There are many places in the U.S. with a cost of living that is below average and that is significantly lower than the high-tech centers of Boston and San Francisco. Often these areas are populated with ex-military personnel, retirees and students who not only have the same technical education as overseas IT workers, but have more professional experience. This U.S. work force is diverse, well-educated, experienced and competitive.
In addition, strong relationships with local universities and vendor partners help keep costs low. And since services are provided domestically, clients can rest assured that deliverables are fully secure and compliant with U.S. regulations, business laws and practices.
The cost of labor is only one factor in the cost of production. It is critical that decision-makers consider all of the factors that go into making up that advantage. With the development of a cost-effective solution for IT services that is based in the U.S., the comparative advantage may well reside on our own shores.
Bill Hazelton is vice president and regional director for CIBER in the Michigan and Wisconsin markets. Reach him at (303) 220-0100 or at email@example.com. CIBER Inc. is a global IT consulting firm which builds, integrates, and supports critical business applications in custom and enterprise resource planning (ERP) environments. CIBER’s Detroit office is one of 60 offices in the U.S. and one of 80 worldwide. Visit http://www.ciber.com