Four Key Principles For A New CIO Manifesto

As organisations grapple with continued global economic turbulence, CIOs need to uncouple from past processes and beliefs and embrace a new manifesto, according to Gartner, Inc.

Gartner analysts have identified four key principles for a new CIO Manifesto that they said will not just change CIOs and their departments for the better, but benefit entire enterprises as well.

“Executives in India and around the world, even in the face of global economic uncertainty, have identified increasing economic and business growth as their highest priority,” said Partha Iyengar, vice president and distinguished analyst at Gartner. “Since this will demand more from IT organisations than just cutting costs, it is clearly time for CIOs to embrace a new CIO manifesto that will declare how generating revenue must become a new and central component of their IT organisation’s mission for the rest of this decade and beyond,” said Iyengar.

The four key principles of the CIO manifesto include:

Principle No. 1: Information is just as important, if not more important than information technology

Information is the oil of the 21st century. Enterprises are generating an unprecedented amount of information of enormous variety and complexity. The need to leverage this data for greater business value is leading to a change in data management strategies known as “big data”. This creates what we call a Pattern-Based Strategy architecture. An architecture that seeks signals in the information, models them for their impact, and then adapts to the business process of the organisation.

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Principle No. 2: By 2016 more than 50 percent of annual CIO project spending will be directed toward measurably improving the financial conditions of an enterprise

All too often CIOs and IT practitioners simply cannot quantify the business value that information and IT delivers to an enterprise. It is doubtful that the financial benefits of a large percentage of new IT projects could be audited and measured for the financial benefit they have brought to an enterprise. Project sponsors incapable of predicting where the financial benefits will appear but who receive project approval will have their projects so designated.

Principle No. 3: By 2020 more than 50 percent of all enterprise information and IT spending will directly support revenue-generating rather than expense-related business processes.

Most IT applications for the past few decades have primarily supported business processes related to the expense side of an income statement. CEO survey results point to the high priority of organic business growth. CIOs must lead their staffs to identify how information and IT can foster organic revenue growth of existing and/or new products and services.

Principle No. 4: The incentive portion of CIO compensation will be derived from the amount of money created by the efforts of CIOs and their staffs.

CIOs who want a permanent place at strategic planning tables must be willing to take on the same types of risk-reward compensation scenarios crafted for the CEO, head of sales and other senior executives. CIOs who can convert information into new savings and new revenue and IT into cost savings will have little difficulty with such a compensation scenario.

“The time really has come to challenge some of the most commonly held IT organisation, operations and leadership beliefs. Becoming a ‘money-making CIO’ requires challenging the efficacy of all current IT business practices, and CIOs really need to take control of the purse strings. For the next two years, business-initiated requests for new IT projects should only be undertaken if they yield measurable and auditable financial benefits for the enterprise,” said Iyengar.