An article in The Wall Street Journal this week highlights how one CEO learned the hard way to take IT more seriously.
Before Hyundai Capital chief executive Ted Chung got word early this spring that a hacker was holding his company's confidential data for ransom, he didn't think the IT department was any more important than other corporate functions. The South Korean consumer finance firm's leader told the WSJ that he kept IT at arm's length, only realizing after the hack that he needed to be directly involved in its policies and procedures.
Chang has joined a growing trend of CEOs grasping the importance of being committed to IT, 110 percent.
"No CEO is that stupid not to pay attention [to IT]," Chung told the paper. "But maybe they paid the same attention I did, which is increasing the budget, giving encouragement but then saying, What the hell do I know about programming? That's the wrong support... Spend your time to understand IT..."
Now, Chung's IT department reports directly to him, and he's involved in setting policies that help it run more effectively -- such as agreeing to lengthen response time on a company Website if that's what's required for better security, or reconsidering the need for a new Website that may expose the company to a fresh vulnerability.
Chung's story is not unique. A recent IBM survey report on CIOs notes the growing importance of enterprise technology leadership, as embodied in the role of the CIO: "CIOs are moving closer to the locus of power in their
organizations. Therefore, it should not come as a surprise that there is a stronger alignment in the thinking of CEOs and CIOs."
In its report on a survey of over 3,000 CIOs worldwide, IBM refers to the CEO/CIO relationship as one of "shared executive agendas."
Nothing new here; for years, analysts have stressed the importance of aligning IT with the most vital organizational strategies. They've railed about the risks of not doing this. And much space has been devoted to educating CIOs and other tech leaders about how to communicate with the top brass.
Yet apparently, a gap remains between CEOs and IT that can lead to problems. Sometimes, it's only after a crisis occurs, as it did at Hyundai Capital, that consciousness is raised and priorities adjusted.
Organizational experts continue to work at closing the CEO/IT gap, especially as the importance of "big data" and online activity grows. In a column in The Wall Street Journal in April 2011, Jeanne W. Ross and Peter Weill of the MIT Sloan Center for Information Systems Research asserted the importance of a closer bond between IT and top management:
In a digital economy, IT is the foundation for doing business... companies of all types are discovering that how they manage IT is crucial to their competitiveness... This doesn't mean that top executives should review every IT investment proposal and decision. But it does mean that senior management must define how the company as a whole will do business in a digital economy. It means they must lead the IT initiatives that cut across all business lines. And it means they must resolve issues that local interests cannot resolve—like what data and processes will be standardized companywide.
Unfortunately, too many CEOs and other top executives often don't even know where to begin when it comes to managing IT.
If you're concerned about closing the gap between CEOs and IT, join us here for a live chat about this topic on Monday, June 27, at 1:00 p.m. ET.
If IT does not have satisfied customers, the use and value will not be seen and the demand will not grow. IT cannot create its own market.
It can use technology and design the systems, software, and use the applications that deliver value to the end user. That uses technology to solve their problems and the value becomes obvious. Smart IT is providing technology solutions to users.
Great point that a CIO could be the crucial liaison between IT and the CEO. Still, unless the CEO understands that IT is a priority and has an open and mutually supportive relationship with the CIO, the gap can persist.
Ha ha, Abdlah-- interesting analogy. It seems that a disconnect between management (reflecting policies set by the CEO) can cause a lot of trouble. Just note this report on Sony firing some security folk prior to the company's infamous recent hack.
Do you think this problem will be solved if CEO's have IT background?
I don't think the CEO needs to have an IT background. That's what his CIO and technical managers are there for. It's there jobs to handle the technical know-how of day-to-day operations. The CEO's job, on the other hand is to create the vision and direction or the company. So he does not necessarily need to get along with the tech folks nor know anything tech. CEO-wise, I draw out the vision, then you implement the solutions and platforms necessary to get the work done.
Yet apparently, a gap remains between CEOs and IT that can lead to problems.
Mary,
Do you think this problem will be solved if CEO's have IT background? Why can't we make the IT exposure compulsory for anyone who is aspiring to become CEO?
D.H.="There was also a report that came out this week, sorry I do not recall the reference, that identified that most CFO's do not have confidence in their CIO's and IT Dept. This definitely suggests a critical communication gap." this one ?
Nicole ponders "Wither IEv" as of this morning and asks us to contribute ideas. That is excellent on her part and working from this thread we might explore the question:
i agree with the title reference here but what can be done? what are the root causes?
a couple starting thoughts,--
in our rush to sell HARDWARE we have trivialized the effort required to produce software. Gates&Allen recognized this problem and used that recognition to create MSFT
in our rush to write software we have trivialized the value of customer experience as input. the best programs available today are those built from customer inputs.
~~
Professional Grade Software:
is Feature Rich: the authors have talked to the customers. the features needed by the customer have been incorporated into the product
intutive interface
Finished and Polished: product not only looks good: everything works and performance is good.
I hope that CEO will learn that sweeping them under the carpet may nessitate an urgent treatment of the carpet and whatever is on it and thus they would take a more proactive approact to IT in their organizations.
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