14 Apr Business knowledge has become a CIO's most important skill
Milwaukee, Wis. – Business and information technology alignment is not a luxury when it comes to designing an IT implementation, and neither is business knowledge.
IT experts from academic institutions to research organizations note that today’s chief executives expect a strong business case, including opportunities for business process improvements, for any IT project. Not coincidentally, they expect their chief information officer – and increasingly the CIO’s staffs – to have enough business acumen to drive strategy and improve a project’s chances for success.
CIOs that don’t possess a strong understanding of their own business and industry will have to obtain it or face career erosion in an era where business knowledge is a key element in building credibility in the boardroom.
There are some impediments, however. A recent CIO survey by Wisconsin Technology Network indicates that most chief technology officers still spend more time on tactics, not strategy. The survey indicated that most CIOs, 53 percent of respondents, devote most of their time to operations and functionality, while only 22 percent spend most of their time on business strategy.
Yet the business-focused message from CEOs has been delivered with some clarity, an indication that CIOs would like to reverse those numbers. Betsy Burton, vice president and distinguished analyst for Gartner, said CIOs are most concerned with enabling growth, linking IT to business strategy, and delivering business value.
“IT governance is a hot issue for CIOs,” Burton said, “and one of things that’s important is that we aren’t seeing a wholehearted shift away from a technology focus. CIOs are trying to figure out how to integrate and link IT and business efforts much more closely.”
Case study: Fiserv
Scott Converse, director of technology programs for the University of Wisconsin-Madison School of Business, said business analytical skills are in high demand. When he talks to business leaders, they say it’s not difficult to find technology workers who are familiar with server administration or network security, the problem is how to train a capable IT worker to be an equally capable business analyst.
According to Converse, their $64,000 question is: “How do you make them a more well-rounded business analyst and somebody that can work more closely with different functional groups?”
The Brookfield-based Fiserv, a developer of financial services software, might have the answer. Paula Harvie, senior vice president of human resources for Fiserv’s Item Processing Group, is involved with the development and continuous improvement of one of the firm’s key business-training programs.
Harvie’s training effort is a small piece of the overall business training conducted at Fiserv. Each group president is responsible for his or her unit’s training initiatives, so she’s involved in a subset of the company’s training.
Fiserv employs 23,000 people and reported $4.41 billion in revenue in 2006. It has grown in spectacular fashion since its founding in 1984, and it now is No. 1 on American Banker’s FinTech 100, making it the top supplier of information technology to the U.S. financial services industry.
Of those 23,000 employees, about 5,750 work in Fiserv’s Item Processing Group (FIG). Harvie supports nearly 2,900 of them, including 208 people focused on technology services or support.
One of FIG’s key business training programs, designed in conjunction with UW-Madison, is called Item Processing University. The curriculum is open to management employees, and it has attracted employees making $60,000 a year and more.
Employees become immersed in five modules over a six-month period, with each module covering key aspects of business training. Modules one and two serve up a steady diet of management leadership and Six Sigma, and subsequent modules delve into everything from ethics to process management.
Overall, the program is sequenced so that a business sponsor, such as the chief operations officer or regional president, invites employees to take the course. The business sponsor will support learning throughout the life of the course, including a project assignment as part of module five.
“We give them academic skills so they can transfer those skills to conduct project management on an ongoing basis,” Harvie said. “We give them the process skills and other skills to support the project.”
In one technology related project, a trainee was assigned by the department president to plan the relocation of an Atlanta computer utility to Norcross, Ga., and relocate the company’s disaster recovery site to midtown Atlanta. Defining the scope of the project was more complex than its sounds; among other tasks, it involved the moving of two host computers with 130 terabytes of disc storage, two tape silos, and numerous rack-mounted servers in a way that minimized business disruption.
After absorbing the finer points of project management life cycles, they preside over a project status meeting near the end of the course. As part of that exercise, they provide an update on the status of the project, their recommendations, a list of things they would do differently, and an assessment of the course.
Harvie and a UW-Madison professor evaluate all assignment work, and there is a post-implementation review.
In the relocation project, where the key tools were process transformation and project management, the company was supposed to save $6,000. However, it far exceeded that objective by producing total savings of $94,000, a figure that was validated by a chief financial officer.
“This was a real process,” Harvie said. “Although there is an academic aspect to the learning, there really is value from a business perspective.”
Business process transformation
One of the benefits that upper management expects to derive from greater business acumen is business process transformation, which is closely linked to analytical skills.
Converse directs a Technology Leadership Series designed for IT professionals and technical professionals like network managers, electrical engineers, and general researchers. Most are on leadership track because their respective organizations view them as integral to the company’s future ability to analyze the business, find the cause of business problems, and deliver a solution.
More often than not, that involves the mapping of existing business processes with the goal of streamlining them. “The emphasis organizations are placing on people is being able to understand day-to-day happenings in work groups from a process standpoint,” Converse said. “What are steps involved and how do you map it out? How do you streamline it to cut down on unneeded or wasteful activities?”
While businesses continue to train for team-building skills, the new emphasis on analytical skills can help determine where process bottlenecks exist and how to prioritize the removal workflow barriers.
Converse employs a Six Sigma methodology, a term that usually is associated with high levels of precision in manufacturing and tolerances for aircraft parts. He teaches how to measure services in a data-driven format and he teaches about customer metrics focused on the amount of time it takes to serve a customer.
Time can be measured in a lot of ways, with common business metrics including the time it takes to process an insurance claim, but the block of time Converse focuses on is “white space.” Instead of focusing on reducing the time it takes to process a claim from five minutes to four, professionals instead are trained to focus on eliminating idle time that causes most customer complaints.
They look at process as a system of steps, and characterize each step based on its role in the process. “The object is to reduce a four-week process to something measured in days, and then days to hours, and hours to minutes,” Converse explained. “It’s that time-based measurement of process problems that will get the greatest impact for the customer.”
People or tools?
Are there technology tools on the market to help with this type of training? According to Converse, tools that allow for analysis of data sets can be helpful – from large reporting and business intelligence add-ons, to enterprise systems, to something as accessible as Microsoft Excel. Anything that enables people to look at large data sets and categorize data is useful, but such tools do not automatically fix processes.
Organizations must have people disciplined in using those tools to drive business decisions, but many organizations are weak in this area. They have small pockets of people interested in identifying data and driving management decisions, but the organization as a whole is not built around this skill.
“Client software to analyze data or back-end systems to cluster data sets – those are great,” Converse said. “In the end, it requires people who have a systems process viewpoint to use these tools to come up with process improvements to create these results.”
Burton recommends that companies identify people who have an interest in getting to know the business side, and who have the interpersonal skills that make them outwardly focused. A skills assessment is a good place to start; people in areas like business intelligence, enterprise applications, or content management tend to have innate business skills, Burton said.
“There are a lot of assessments of where people’s interests are,” she said. “If I have a really good Unix system administrator or one that keeps an Oracle system running with little downtime, trying to train them to go out and work with business may not be good idea on either count, but identifying people to train as business analysts makes a lot of sense.”
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