Is your IT team strategic or operational?

"Do not expect value from a CIO with an operational profile" proclaims KPMG in their report "Cost to Value 2010 Global Survey on the CIO Agenda", but how do you determine what "operational" is?

Last week I provided a simple survey to determine if your IT team has a primarily operational or strategic focus. Of the 15 criteria listed there are 5 criteria that have stood out in my research to-date as being diagnostic, that is companies with a strategic focus almost always have these traits and those that are operational almost never do. The 5 criteria are:

1. Who does the CIO report to?: CIO's that have a reporting line into the CEO or top executives are 70% likely to be strategically orientated. CIO's who report to the CFO or COO are never strategically orientated. This makes sense, if IT is strategic to the business then the CEO wants to be involved, if it is something that should be neither seen nor hear (nor ever break) then it goes to the CFO. Many CIO's seem to forget this and think they can be strategic for behind the CFO, the results suggest otherwise.

2. Are portfolio management techniques used to manage IT investment?: This one surprised me. In 99% of companies with a strategic orientation portfolio management was in use, in operationally focused IT teams it was 11%.

3. When IT investments are being considered what are the key criteria for approval?: 98% of companies with a strategic IT orientation focus on strategic fit, while only 23% for companies with a operational focus.

4. Are IT benefits managed?: For companies with a strategic IT focus 70% actively manage benefits, for operational IT that percentage drops to 0%!

5. Is the CIO focused on value delivery or cost cutting?: 85% of strategically focused CIOs focus on value while only 22% of operational focused companies do.

So what does this all mean? Well, it has significant influence on what the CIO can achieve in a organisation and it also provides a guide as to what the CIO should be focusing on to align with how IT is truly viewed by the executives.

There will be no blog next week, back on the 21st of November.