Increasingly, in retail and other industries, it’s the CEO. Findings from Gartner’s annual CEO and Senior Business Executive Survey show that CEOs place technology among their very top priorities—right behind growth, cost and profits. Logic says technology is a factor affecting those top three, too.
CEOs get it: Technology is critical to the success of a retailer, and they’re keeping technology top of mind when they steer the business. CEOs may not lead the process in selecting technology for human capital management, but as Chief Executive Magazine notes, “when such decisions involve the strategic direction of the company, such as with cloud computing, mobile, data management and collaboration, increasingly, decisions come straight from the CEO.”
Gartner’s revelations square with McKinsey&Company’s survey on business and technology strategy from last year. Successful CEOs think strategically and execute on their vision. The trick is for IT to see itself as strategic, too, and support CEOs’ vision—to empower senior leadership and enable high-performing retail organizations. Yet many IT departments continue to focus on issues that today’s technologies—namely, the cloud and software-as-a-service (SaaS)—have in fact alleviated. It’s a holdover culture that causes technology-buying decisions to suffer. CEOs fail to receive the support that the company’s strategic direction needs.
IT’s Burden—Holding Back the CEO’s Vision
Notably, more and more executives see IT, too, as strategic. Respondents—all C-level—to McKinsey&Company’s survey, for instance, revealed their various IT-led priorities. Of note, 61 percent indicated “improving effectiveness of business processes,” and 47 percent pointed to “providing managers with information to support planning and decision-making.” Both, especially the latter, have strategic implications and increased in importance compared to survey results from 2012 and 2011.
However, the same McKinsey survey found respondents giving IT more negative marks on performance than they did in 2012 and 2011. What’s causing that? At issue may be how IT continues to cling to its traditional role as micromanager of the technology-buying process—even as technology no longer has the capacity, as it once did, to incapacitate IT.
With all the improvements that cloud-based technology has brought to the marketplace, it’s easy to forget the extent to which legacy technologies’ demands have limited IT’s potential. IT used to steer decisions with an eye toward minimizing the always-present burden of tending to enterprise technology, whose inefficiencies monopolized IT’s time. The nature of the burden shaped IT culture for decades. Much as it has awakened CEOs to technology’s strategic value, however, the cloud has freed IT from the shackles of these old, premise-based systems. IT departments that recognize the shift and let go of their old ways forge new alliances with senior leadership and cast themselves as a strategic asset. These IT departments improve their ability to influence CEOs’ technology-related decision-making.
Factors that Should Influence a Retail CEO’s Technology-buying Decision
This will be the topic of my next blog entry, the second in this two-part series. CIOs that succeed in transforming their IT culture will eradicate an old mentality and see a boon to their influence on the CEO. IT then becomes a partner to CEOs as they make better-informed HCM technology–buying decisions—decisions that support their strategic direction for the organization.