Like legacy technology systems, agency chief information officers are struggling to modernize their own roles.
Federal technology executives and their private sector counterparts still face an uphill battle to shed the long-held viewpoint that they are back-office, cost centers.
A new survey of public and private sector CIOs indicated the modernization of their role isn’t happening as fast as many would expect, and technology executives feel the way others judge their value remains stuck in the 1990s.
“Even as we recognize the role is shifting and recognition of business IT is becoming more predominant, 67% of CIOs still felt the top factor of their performance was their ability to cut costs,” said LaVerne Council, the national managing principal for enterprise technology strategy and innovation practice at Grant Thornton, on Ask the CIO. “That is so interesting given the center stage of technology. This out-ranked successful execution, improving projects and services delivery, and even their ability to thwart cyber threats. That’s very telling.”
For more than a decade, CIOs have been moving out of the server room and into the board room by proving time and again their value to the entire business line, not just the technology side. But even today, Congress needs to remind certain agencies of the importance of giving their CIOs a bigger seat at the management table.
Council, who is a former CIO at the Department of Veterans Affairs, said respondents who believe their fellow executives are measuring their value by how they can cut costs may be taking too shallow of a perspective. She said the CIO’s value comes from knowing the technology assets their organization is using and how they efficiently manage those systems, networks and data.
That concepts of managing costs, knowing what you have and using that data to strategically plan for the future was at the heart of the Grant Thornton and the Technology Business Management (TBM) Council survey. The two organizations conducted the survey in the fall of 2018 over a one-month period talking to 75 CIOs and other IT executives from five sectors, including public, financial and technology.
“The challenges most cited by CIOs are inherent in running the business of IT, and aligning the organization with the business and its goals. These challenges are amplified by the divide between how CIOs want to be measured and how they are measured by their business partners,” the survey found. “If a CIO’s success is measured by their ability to reduce costs, they will have a difficult time articulating the value of IT spend unless they demonstrate that value in the same terms measured by their business partners.”
CIOs as more than just cost centers
Council said for federal agency CIOs, this challenge is even greater because of administration turnover, whether that happens every four years or more often.
“CIOs are dealing with changes daily that they don’t even know are coming. What you have to do is take small bites,” she said. “The best thing you can do is understand what your key priorities are and what the mission is, and ensure you are making progress toward achieving that mission on a daily basis, but you also want to make sure you are chunking it out in a way that you can successfully make it work.”
Council said this way the CIO can finally achieve the long-desired move to becoming a trusted partner and not just a cost center.
“Ultimately, it’s about communicating with all your stakeholders so that they can support you and understand what you are trying to achieve,” she said. “There’s always a lot of big problems so you have to prioritize them and then you have to be willing to break them down into bit size pieces so you can set up goals and explain how you will achieve them.”
The survey respondents said they were focused on building trust across their organizations in four main areas: Technology, customers, internal processes and employees.
“In the public sector, from the CIOs that lead many of the agencies, their number one challenge was really they don’t have a lot of time to think strategically and they are caught in a tactical malaise of just getting done what they can,” she said. “They understand the need to be able to think about technology in a strategic manner will give them a better long-term outcome.”
Todd Tucker, the general manager and vice president of the TBM Council, said one way CIOs can build trust is by demonstrating how to make the best out of technology and budget the agency has.
“Being able to show that financial management maturity for a lot of organization is food and shelter for CIOs. They have to be able to show that and have conversations about value,” he said. “That provides them the foundation for showing what IT is doing that aligns to those outcomes. Without having that foundation, it’s very difficult to show that we are spending money and quite frankly precious talent and resources on the right things.”
TBM standards impacting all sectors
The survey also measured the impact and use of TBM standards among all sectors. The Trump administration has mandated agencies implement TBM standards are part of their fiscal 2021 IT budget request.
While the survey didn’t say how many CIOs are using TBM, respondents said they do expect to see benefits from the standards, especially as they relate to driving value and creating that trust.
“Over two-thirds of respondents to our survey identified the following benefits of TBM as being most important to them: The ability to shift spending to innovation or growth, cost reduction or optimization, and improving conversations with business partners,” the survey states.
Tucker said in the federal sector, agencies such as the Education Department are using TBM standards to consolidate, rationalize and modernize business processes and the corresponding technology.
“One of the key challenges we see related to TBM, and it relates to so much else that CIOs are doing, is that there is this perception that it’s about compliance. But the really savvy CIOs that we work with while there is a perceived mandate, it’s more about the value they can create and how they can use TBM to accelerate these other priorities,” he said. “The transparency that you are really seeking with TBM or any methodology is used to make decisions, not about reporting to OMB or the annual budget submissions. If you talk to those who have had success and are still on this journey, don’t see it as a reporting tool for OMB or for their budget, but they see it as a way to make better decisions. And by looking at it that way, they can start to be more strategic because they can make decisions faster, align their priorities with other agency specific priorities that serve the mission.”