Cost of IT versus Value of IT

The CFO has traditionally controlled the purse strings ensuring fiscal prudence to keep the enterprise healthy with adequate financial safety net. As a part of the management team the discussion and debate ensured that investments stayed aligned to overall company direction. With adequate risk controls, only in rarest of rare cases the CFO could overrule other CXOs. Recent times have been full of analysis and news that the CIO is no longer in control of the IT budget, now the CFO purportedly controls IT investment decisions.

The CIO being the youngest CXO not always by age but the role has evolved only in the last decade or so and having typically grown from a technology background was perceived to lack business acumen and unable to take all aspects into account. The majority migrated and matured with ease working lockstep with other CXOs to the benefit of the enterprise. Post slowdown “new normal” changed organizational risk appetite and with finances being scarce the CFO rose to prominence. Now with growth back on track, why is it that the CIO continues to stay shadowed considering s/he demonstrated higher changeability and adaptation to the environment.

IT budgets have stayed stable over the years with mature enterprises focusing on bringing down IT operating expense leaving the capital investments open for discussion. Corporate and IT governance provided the necessary checks and balances on where to invest. So what gives rise to the new paradigm ? Does it indicate breakdown of the balance or has the CIO relinquished his/her responsibility now satisfied to stay in the back office ? Has the foundation and partnership set by IT crumbled with cost remaining the residual reality with the value being discarded on the wayside ?

IT does incur cost; everyone is aware and acknowledges that a significant portion (40-90% depending on the enterprise, IT maturity, CIO, Board of Directors, etc.) of the budget is allocated to “Business as Usual”. Where the IT organization and its leader is unable to clearly communicate the benefits or have a dialogue with other CXOs as an equal, irrespective of the good work done, IT gets labelled as a cost thereby nullifying the efforts.

IT also delivers value to the enterprise, customers, employees and the shareholders. Sustained differentiation and competitive advantage in the near term are typically IT enabled innovation. Multiple industry IT and CIO awards, and case studies validate success clearly illustrating value. New disruptions created by mobile consumers, social online engagement, analytics, and many more would find it difficult to survive without a good IT platform and sustained focus. Is the balance shifting ?

I believe that recent times have accentuated the value of IT and have created a wider role for the CIO that goes beyond technology lead interventions. Outsourcing the operational activities has also given the IT team an opportunity to focus on what matters. The task of managing the budgets and reporting has become even more important thus creating a stronger bond between the CIO and CFO. With increasing financial acumen, the CIO and CFO are on the same side of the table with the CIO deferring the financial decisions to the CFO. This is rebalancing the equation and not a shift.

Is divergence the new convergence ?

“I use 7 screens to manage my work and life” proclaimed a Silicon Valley high ranking geek working for a big technology company. It amazed everyone on the table who had challenges with two phones, one personal and other company issued, and a laptop. 7 devices, portable and fixed comprised the stable of computing assets used across various operating systems, capabilities, synchronization with multiple systems, providing segmented information to cater to specific needs of this executive. Asked a CIO in the audience, “How do you remember which device to pick up for what purpose ?” Quipped the multi-device juggler, “Oh it’s easy …” and rattled off the work distribution.

When Smartphones made their mark with the ability to push email and SMS, it ensured that the corporate worker had no option to 24X7 work. The small screen however posed limitations on what one could achieve on the phone. As screens became larger the phone got bigger and bulkier redefining the shape and size of what was once a small pocket appendage. The good thing is that the phone never aspired to replace the clunky laptop.

The advent of the tablet a few years back had researchers proclaiming the imminent demise of the laptop; déjà vu when the laptop made its appearance. Executives love the soft keyboard on the tablet, plus the ability to scrawl and convert to text but slowly realized speed limits imposed by this input method. Keyboards found their way back connecting to tablets and then everyone wanted spreadsheets and word processors compatible with their other devices. Reading on the smartphone has evolved to allow all types of documents barring few exceptions; the tablet had to compete with the phone and the laptop.

Manufacturers are experimenting with different screen sizes, 5”, 7”, 9”, 10” with justifications on why their version makes sense to the users, while the phones now have crept to 4”. Each has found traction with a set of users, segmenting the market by activity or deemed convenience. While initially WIFI was acceptable communication channel, now 3G/4G is a necessity.

One more connected device, one more data plan to manage, the growing monthly expense is not a discussion, the ability to traverse across the screens is insatiable, which are evolving faster than (Charles) Darwin or (Gordon) Moore thought possible. The want rate is keeping pace with this and suddenly the hapless executive has multiple screens not wanting to discard the earlier one as quickly as s/he is acquiring newer ones.

Will the phone and the tablet converge in the future ? Many believe convergence is the way forward between the capabilities offered by the phone and the tablet with the new device offering the best of both worlds. Does it mean we will be able to make phone and video calls, surf the net, work on documents and applications, talk to the device, type on it as fast as we do on the humble laptop, and use it for entertainment; all this with clear demarcation and ability to segment usage as well as official and personal data.

Me thinks that it will take longer than we believe it will; maybe there are individuals who will happily put a 7” or bigger device to their ear or use it with a Bluetooth speaker, the majority will manage the convergence or divergence with multiple and live with its associated challenges.