What business executives don’t understand about IT

When I graduated from college, I worked as an assembler language programmer for Sears. At that time, Sears was the world’s largest retailer and it was just beginning to use the new System 360 from IBM. IT was looked upon as a group of techies that performed some unexplainable job that was supposed to revolutionize the business. Beyond that, the senior executives across the business knew little of us nor did they want to know.

Ever since then, IT has been accused of being too technology-oriented. But much has changed. We have seen more CIOs being recruited from outside of IT to inject business knowledge into IT, and many IT leaders themselves have pursued MBAs for the same reason. Despite this, many non-IT executives still don’t understand how to work effectively with IT, nor do they believe doing so is part of their job. It is up to CIOs to change this narrative so that companies can maximize the value of IT.

To do my part in helping convince business leaders they must play a role in IT, I stepped directly into the business executive pipeline, volunteering to guest lecture in the MBA program at a local large university. The title of my presentation has been “Digital Transformation Strategy,” subtitled “How to effectively exploit the IT resource to gain sustained competitive advantage.”

When I present to future MBAs, I focus on four central issues that business executives most often get wrong about IT.

Where IT should report

The initial point of discussing organizational structure is to educate those most likely to be aspiring for corner offices that the CIO needs to report to the CEO or COO. To often CEOs have positioned IT to report to some other executive, oftentimes the CFO, and according to CIO.com’s State of the CIO survey, 18% still do. This decision is often made because IT is viewed as a cost center. Putting IT under the CFO, the company will likely have financially sound systems but perhaps not the ones the company strategically needs.

When the CEO doesn’t think IT is important enough to get top-level attention, that message filters down to the rest of the corporation. IT is not viewed to be as important as Sales, Finance, Manufacturing, Operations, or Marketing — dangerous in a highly competitive environment where efficient or innovative systems can spell the difference between the corporation’s success or failure.