Business Transformers: Ten quick questions

MUMBAI, INDIA: In an environment where 70 per cent of CEOs believe that business change and entrepreneurialism will increase in the next five years, CIOs need to do more to ensure that IT plays a positive role in business transformation in 2011 and beyond.

When organisations have to navigate change, the IT organisation is usually in the middle of it in some way, either as an enabler or a constraint. CIOs rarely have a leadership position in business transformation of this scale and they need to prepare more vigorously to ensure that IT does its job to advance the organisation to the new state.

Often, CIOs and IT organisations have difficulty identifying that they are in the midst of a transformation. This is not helpful at a time when an environment for more large-scale change exists. For example, this year we've seen many CIOs still focused on efficiencies when their CEO is focused on growth. This is especially a problem in our region where business optimism and growth expectations are higher. A focus on strategic change could help turn this around.

One challenge is that CIOs often come from information systems backgrounds, yet the ability to manage large scale change requires different skills. As our recent CEO survey showed, more than 60 percent of CEOs identify their information systems as a critical constraint to change – second only to corporate culture. This is not good news for the CIO. But what if a transformation requires a cultural change, as well as a change in information systems? This makes the transformation even more difficult.

Gartner has identified ten questions to help CIOs focus on strategic change rather than systems when they are in the midst of a transformation.

1. What type of change is happening?

CIOs must begin by planning ahead for the contingency that a strategic change effort is or will be under way. Likely causes might include the creation of new ventures, dealing with innovation and change, managing mergers and acquisitions and addressing new competitive pressures.

2. Who is driving the change?

The preferred sponsors of a major change would be the CEO and, alternatively, an executive who is on the top management team (COO and CFO). If change is restricted to a particular business unit, the top manager in that unit is the preferred sponsor. CIOs need to develop a line of communication with this group that will be helpful in times of stress during a strategic change.

3. What is the deadline for the change?

In most cases of strategic change, there is a "window" for achieving the goal. This can be impacted by a number of factors including public pronouncements by the CEO to investors or shareholders, board of director expectations set by the CEO, information gained from competitive intelligence, as well as competitor announcements and conclusions drawn by financial analysts covering the company.

4. What are the constraints to the change?

In the midst of any new idea, there are forces against the successful execution of change. We advise that CIOs are part of the coalition driving the change and work to expand it further to improve the chances of success.

5. How complex is your infrastructure?

One of the greatest issues in managing strategic change is the complexity of the IT infrastructure from applications to systems supporting business units. 

6. Where are your people?

One of the most difficult skills for IT leaders is the ability to discern how their people feel about an upcoming change. CIOs need to focus on the process by which people actively take on a change to the environment to which they have become accustomed. In any organisation, approximately 10 percent normally reach out for change, while another 10 percent fully reject any change.

7. What is the impact on stakeholders?

During a strategic change, many stakeholders are affected – from executives who support the change, to knowledge workers who must shift to a new way of doing things. Identifying these stakeholders is crucial, and the impact of change on each of them must be understood in very personal terms.

8. How are decisions made during a strategic change?

The decision making process is different during a strategic change, as governance structures made prior to the change are redesigned and rebuilt to reflect the future realities. CIOs are usually attuned to decisions that are being made, but may not have much influence other than being a "general contractor."

9. What is the impact on key and mission-critical processes?

Clearly the impact to mission-critical processes must be taken into account for the change to succeed. Among those processes are change processes, such as identifying, designing, and implementing new systems, plus processes associated with sales, service and support.

10. What are the mind-sets of the organisation, and what do they need to be?

One of the difficulties in strategic change is the resistance of some managers to the idea that cultural mind-sets are to be taken seriously, and yet the management of this most determines the success or failure of strategic change.

The bottom line is that under most conditions, a CIO armed with the answers to these questions substantially lowers the risk of failure due to a strategic change. All of us can expect to be involved in business transformation to some degree over the next few years and we need to be prepared.

(Linda Price is group vice-president of executive programs, Gartner. The ideas and views expressed in this article are those of the author and do not necessarily represent the views of CyberMedia)