The CIO should be prepared with a brief summary for the board each quarter, highlighting the value IT creates for the company.
This series explores how the board of directors can help the company leverage technology to create a differentiated customer experience and sustainable competitive advantage. The CIO must approach each board meeting with that exact perspective. How is IT creating value for the business?
Preparing for the Board Meeting
The board is responsible for approving strategy and budget and maintaining good governance across the business. The CIO, working with the rest of executive leadership, needs to ensure that technology is integral to the company strategic plan and not a separate afterthought – as so often happens. The company strategy must emphasize, among other things, how technology will be applied to increase shareholder value.
That means the CIO should be reporting to the board on strategic technology initiatives and IT governance. Let’s explore how.
Strategic Technology Initiatives
First and foremost, as we’ve said many times in previous articles, IT probably does not and should not own most technology initiatives. There will be an executive sponsor for each business project, including those that are heavily dependent on technology and IT. That being said, there’s a good chance the CIO will be called upon to report on some of these projects.
Be prepared with a simple chart showing the status of critical milestones. A single-slide Gantt chart with bars colored green, yellow, or red can quickly tell an easily digested story of the project status. The CIO can add commentary during the meeting to explain risks and how they are to be mitigated – all in business language with no techno-speak.
Also show the project budget and projection for the end of the project. Are we under budget, on pace, or over budget? If under or over, explain why. Keep it brief and to the point.
And always explain whether we are likely to achieve the business value anticipated at the outset of the project.
Perhaps the most important goal the CIO should have for board meetings is to build the board’s trust, credibility, and respect for IT. This is achieved through business-oriented metrics that tell the story of how the value IT is creating for the business.
- We can measure the value of IT in five categories with the metrics listed by each:
- Customer Service: customer satisfaction should be increasing while total cost of ownership decreases.
- Infrastructure: cyber resilience should see time to detect a threat decreasing and time to remediate a threat decreasing; service availability should show improving up-time for critical services, like email, networks, and key applications.
- Software Development and Maintenance: four important measures are percent of projects completed on time, on scope, and on budget; cost per story point delivered; timing of error detection (e.g., number of errors discovered in unit testing vs user acceptance testing vs in production); and reliability of production software based, where we are looking for steadily increasing availability.
- Project ROI: return on investment for business projects supported by IT is a critical measure and it forces us to hold business sponsors accountable for the results delivered after investing IT resources.
- Budget Compliance: report on IT adherence to operating and capital budgets.
These nine metrics can be reported on one or two slides. And then keep the narrative simple. Are we trending toward continuous improvement? Are we leveled off? Are we slipping? Whatever that summary is, explain why in simple terms.
Our goal is to show continuous improvement in those areas that have a direct impact on the company’s ability to generate revenue, reduce costs, manage risk, and maintain a competitive advantage.
A business coach once told me to “give them the book report and trust that they’ll ask if they want to know more.” That guidance was particularly well suited to board meetings. Deliver the summary and prepared to go as deep into the weeds as may be necessary to answer questions, if any.
The CIO must give the board an honest snapshot of IT performance and be prepared to explain why it’s improving, diminishing, or leveled off. In return, the board will develop trust, credibility, and respect for the CIO and IT. That leads to increased willingness to invest in strategic technology initiatives that drive the company’s competitive advantage.
We’ll conclude this series with some guidance on the evolving relationship between the board and CIO.
These articles are purposefully brief and aim to provide high level guidance and trigger ideas. As always, if you want more information or don’t want to wait for all the upcoming articles, email Emily Ford at Emily@WolffStrategy.com and she’ll set up a complimentary 30-minute consultation with me.
Larry Wolff is the founder & CEO of Wolff Strategy Partners, a boutique consulting firm specializing in Enterprise Strategy Management, Digital Transformation, IT Leadership, and Executive Coaching. Larry has served as CEO, COO, CIO, Chief Digital Officer, and management consultant for public, private, international, and emerging growth companies. His specialties include corporate and IT strategic planning, technology led business transformation, business and IT turnarounds, merger integration and large-scale project rescues. His methodologies span industries and scale to companies of all sizes.
Feature image by Javier Dez Salcedo from 123rf.com.
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