Highly successful IT organisations follow a remarkably similar path to creating and communicating business value, of which risk and return are inseparable elements, according to Gartner, Inc. As the IT profession matures, the pattern for success is being increasingly refined and demands communication of both risk and return in business terms.
In the recently released book "The Real Business of IT: How CIOs Create and Communicate Value," published by Harvard Business School Press, Richard Hunter, group vice president and Gartner fellow and George Westerman, research scientist at MIT Sloan's School of Management's Center for Information Systems Research (MIT CISR), examine how businesses can increase the business value of IT by communicating more effectively about IT value.
Mr Hunter highlights key findings from the book at Gartner Symposium/ITxpo 2009, being held here through 5 November.
"If the economic meltdown of 2008 shows us anything, it's that you can't talk about return without talking about risk," said Mr Hunter. "Over five years of joint research have shown us three things: firstly, companies that communicate effectively about IT value create more value; secondly, companies that communicate effectively about IT risk reduce business risks; and thirdly, CIOs who communicate about risk and return in terms of business outcomes and performance find it easier to achieve an effective balance."
Mr Westerman said that IT professionals are often unaware how deeply IT is embedded in their thoughts and words, but said that many are now finding that colleagues respond far better when ideas are framed in terms of business performance.
"Many general managers and CFOs believe that their organisations spend too much on IT or wish that they could get better returns from their IT investments," he explained. "However this 'cost-mind-set' results, at least in part, from an inability by IT and business leaders to communicate in a common language about IT value and risk."
The research shows that IT leaders can turn this situation around. The CIO and IT team can use information technology to create three forms of value that are vitally important to leaders throughout their organisation:
- Value for money when the IT department operates efficiently and effectively
- An investment in business performance evidenced when IT helps divisions, units and departments boost profitability through a virtuous cycle of IT value.
- Personal value of CIOs as leaders whose organisations ask them to take on responsibilities well beyond IT.
CIOs need to more effectively communicate these forms of value with non-IT leaders. In this way, peer executives have a better grasp of how their organisation is benefiting from IT.
The book's authors have devised four next steps, designed to set CIOs on the path to value by enabling them to communicate both risk and return in business terms:
- Monday Morning: Begin training yourself and the rest of the IT organisation to communicate risks and returns in terms of business outcomes and business performance.
- Next Week: Examine the value for money provided by the IT organisation. Identify opportunities to improve risks and returns alike by improving the foundation: infrastructure, applications, skills and IT management processes.
- Next Month: Assess your ability to execute the steps of the virtuous cycle. Focus on those parts of the cycle that are least capable in order to improve solutions.
- Next Year: Take advantage of high-risk, high-return opportunities that your highly capable organisation can handle, and competitors can't.
Copies of the book "The Real Business of IT: How CIOs Create and Communicate Value" are available at Gartner Symposium/ITxpo at the Gartner Bookstore on the ITxpo show floor. The book can also be purchased online at http://www.amazon.com/.... Additional information about the book is available at http://www.gartner.com/...
Additional comments from Mr Hunter are also available on the Gartner YouTube channel at http://www.youtube.com/... and http://www.youtube.com/.... A digital file of the book cover is available at: http://www.gartner.com/....
About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo is the industry's largest and most important annual gathering of CIOs and senior IT executives. This event delivers independent and objective content with the authority and weight of the world's leading IT research and advisory organization, and provides access to the latest solutions from key technology providers. Gartner's annual Symposium/ITxpo events are key components of attendees' annual planning efforts. They rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use IT to address business challenges and improve operational efficiency.
Follow Gartner
Follow news, photos and video coming from Gartner Symposium/ITxpo on Facebook at http://www.facebook.com/.... FriendFeed at http://friendfeed.com/..., on Twitter at http://twitter.com/... using #Gartnersym, on Flickr at http://www.flickr.com/...@N07/ and on YouTube at http://www.youtube.com/....
In the recently released book "The Real Business of IT: How CIOs Create and Communicate Value," published by Harvard Business School Press, Richard Hunter, group vice president and Gartner fellow and George Westerman, research scientist at MIT Sloan's School of Management's Center for Information Systems Research (MIT CISR), examine how businesses can increase the business value of IT by communicating more effectively about IT value.
Mr Hunter highlights key findings from the book at Gartner Symposium/ITxpo 2009, being held here through 5 November.
"If the economic meltdown of 2008 shows us anything, it's that you can't talk about return without talking about risk," said Mr Hunter. "Over five years of joint research have shown us three things: firstly, companies that communicate effectively about IT value create more value; secondly, companies that communicate effectively about IT risk reduce business risks; and thirdly, CIOs who communicate about risk and return in terms of business outcomes and performance find it easier to achieve an effective balance."
Mr Westerman said that IT professionals are often unaware how deeply IT is embedded in their thoughts and words, but said that many are now finding that colleagues respond far better when ideas are framed in terms of business performance.
"Many general managers and CFOs believe that their organisations spend too much on IT or wish that they could get better returns from their IT investments," he explained. "However this 'cost-mind-set' results, at least in part, from an inability by IT and business leaders to communicate in a common language about IT value and risk."
The research shows that IT leaders can turn this situation around. The CIO and IT team can use information technology to create three forms of value that are vitally important to leaders throughout their organisation:
- Value for money when the IT department operates efficiently and effectively
- An investment in business performance evidenced when IT helps divisions, units and departments boost profitability through a virtuous cycle of IT value.
- Personal value of CIOs as leaders whose organisations ask them to take on responsibilities well beyond IT.
CIOs need to more effectively communicate these forms of value with non-IT leaders. In this way, peer executives have a better grasp of how their organisation is benefiting from IT.
The book's authors have devised four next steps, designed to set CIOs on the path to value by enabling them to communicate both risk and return in business terms:
- Monday Morning: Begin training yourself and the rest of the IT organisation to communicate risks and returns in terms of business outcomes and business performance.
- Next Week: Examine the value for money provided by the IT organisation. Identify opportunities to improve risks and returns alike by improving the foundation: infrastructure, applications, skills and IT management processes.
- Next Month: Assess your ability to execute the steps of the virtuous cycle. Focus on those parts of the cycle that are least capable in order to improve solutions.
- Next Year: Take advantage of high-risk, high-return opportunities that your highly capable organisation can handle, and competitors can't.
Copies of the book "The Real Business of IT: How CIOs Create and Communicate Value" are available at Gartner Symposium/ITxpo at the Gartner Bookstore on the ITxpo show floor. The book can also be purchased online at http://www.amazon.com/.... Additional information about the book is available at http://www.gartner.com/...
Additional comments from Mr Hunter are also available on the Gartner YouTube channel at http://www.youtube.com/... and http://www.youtube.com/.... A digital file of the book cover is available at: http://www.gartner.com/....
About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo is the industry's largest and most important annual gathering of CIOs and senior IT executives. This event delivers independent and objective content with the authority and weight of the world's leading IT research and advisory organization, and provides access to the latest solutions from key technology providers. Gartner's annual Symposium/ITxpo events are key components of attendees' annual planning efforts. They rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use IT to address business challenges and improve operational efficiency.
Follow Gartner
Follow news, photos and video coming from Gartner Symposium/ITxpo on Facebook at http://www.facebook.com/.... FriendFeed at http://friendfeed.com/..., on Twitter at http://twitter.com/... using #Gartnersym, on Flickr at http://www.flickr.com/...@N07/ and on YouTube at http://www.youtube.com/....
