Is transformational IT still locked out of the board room?

Is transformational IT still locked out of the board room?

August 06, 2008 0 Comments

I recently took part in a roundtable discussion in London. Other participants included John Murdoch, Head of Consultancy from BT Global Services, a Progress Software customer and partner, Ruediger Spies, Independent Vice President Enterprise Applications from IDC, and members of the media.

The topic of discussion was a recent research project commissioned by Progress Software, which surveyed Chief Information Officers (CIOs) and heads of business across 500 European enterprises, with the purpose of examining the requirement and delivery of information in large and complex businesses. A lot of questions were asked in the research but the area we concentrated our discussion on was the role of the CIO. Here are a few of the more surprising results. The research found that in only 13% of cases are CIOs required to sign-off on a new business strategy. CIOs predict their budgets will increase less than eurozone inflation over the next few years whilst they are still expected to deliver more. Finally, only 51% of CIOs sit on the board of their companies.

All this paints a picture of IT being under pressure, having to respond to business strategies where it has no major influence in defining them and not being strategically valued in the way that one imagines IT should be.

Taking a closer look, there are some variations around Europe and between vertical sectors. In France, 69% of CIOs are at board level, whereas the UK only has 48%. This perhaps reflects France's increased faith in technology and the more sceptical attitude of the UK.  Telecommunications leads the way as a vertical with 64% of CIOs at board level. Manufacturing comes in last with just 42% in that position. Perhaps surprisingly, in financial services, a sector with IT very much at its heart, only has 49% of CIOs on the board.

But enough of statistics. The conclusion from the discussion was that many organisations risk missing out on opportunities if they underestimate the importance of IT to business strategy (anyone who doubts this only has to look at the way the Internet has influenced businesses in every vertical industry). In some industries, it is certainly more central than others - it's not easy to imagine how a telco operator would exist without IT for example - but it is always dangerous to simply view IT as providing efficiency gains and support to the business without looking for strategic opportunities to transform the way that the organisation works.

It seems that CIOs have work to do to prove their strategic impact and to better communicate the transformational value of technology. Likewise boards need to wise up. If IT isn't central to their business thinking, they risk being leapfrogged by more innovative competitors.

Giles Nelson

View all posts from Giles Nelson on the Progress blog. Connect with us about all things application development and deployment, data integration and digital business.

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