Download the authoritative guide: Cloud Computing 2019: Using the Cloud for Competitive AdvantageGranted, a CIO has to have a firm understanding of what makes IT tick, but going forward, CIOs will increasingly have to have a firmer grasp of how technology helps their companies compete and succeed, than bits and bytes.
What this means, in practical terms, is CIOs have to be as much a business process managers as a technology managers. IT effects virtually every aspect of company operations today. Because of this, understanding where technology can improve a business process, streamline operations and consolidate functionality and resources across business units, or get new customers, for example, is vital.
And, in order to understand this, today's CIOs have to know where the company gets its parts and pieces, and how those things are processed into a product or service someone will buy.
"The CIO must have command of what are the basic business processes and how they map to IT," said Allan Frank, a senior Hackett Group fellow and president and CIO of AnswerThink, Hackett's parent company. "The CIO really has to take a leadership position around helping the organization optimize its business processes; leveraging technology and being both champion, visionary and a leader but that requires good alignment between the CIO and rest of the business"
This is not to say good CIOs can tell you exactly how a payment is processed and through what banks it goes and a bad CIO can't. But a good CIO should be able to tell you how many different types of payments are accepted by the company and how those payments are taken in, and, at a very high level, processed.
Or, on the supply side, an effective CIO knows his or her business well enough to know some shipments come from China via ship and are held in customs while others come from domestic suppliers and experience no such delays.
"When you talk to the service manager you need to understand that of course he has more knowledge than you have," said Jan Dressel, America's CIO for Siemens, "but, nevertheless, it is important that you can speak to him and understand exactly what he is saying."
Yet, adds Dressel, as a group, IT must have the capability on staff or close-at-hand to comprehend and obtain transaction-level detail and visibility into the business processes it is effecting or trying to effect. Otherwise, you may do more harm than good.
The important question for Craig Lawton, vice president and leader of the America's IT practice for Boston Consulting, is does "the CIO and his or her leadership team have the level of process understanding that they, as a team, can be business partners and advisors to the key business units?
The CIO has to have a enough of the level of understanding that they can sit with the CEO and the CEO's direct reports and understand where technology can create efficiency, where technology could maybe change the rules in how they're going to market, where technology has the ability to generate incremental revenue. So, the CIO needs to know enough about those businesses and their processes, at the very highest level, that he or she knows where to push this and where insert that and have somebody standing behind them that has enough depth of understanding of that that they can go and take that concept and work with the supply chain person, or whatever it is, to drive that concept down" into the business unit itself.
As technology once again take center stage in the battle for more business or more efficient operations, depending on where your company is focused at the moment, the CIO will be thrust into the limelight as never before. Therefore, understanding how your company functions will become more and more a necessity, rather than a luxury, and may well spell the difference between success and failure.
"They understand how the business works and how the business is using technology in those processes today," said Lawton. "Not, 'Which standards are we using to do that?', that could be their chief technology or infrastructure person, but that were using technology and generally this technology. That's what you would expect a really good CIO to be able to articulate and do."