CEOs and other executives must learn to manage IT as a business if they want to harness its power to create value, says author and PricewaterhouseCoopers senior practice partner Mark Lutchen.
Speaking in Sandton yesterday at the South African launch of his book, "Managing IT as a Business - A Survival Guide for CEOs", New York-based Lutchen said that even after the technology bubble burst in 2000, IT remained among the top five corporate expenditures.
In addition, IT was so intertwined with the business that it could have a disabling effect when it did not work and an enabling effect when it did. "It can affect shareholder value at the end of the day, more as it becomes integrated," he said.
Despite these facts, not enough management attention or management skill was focused on IT.
He added that most IT managers had traditionally not been trained in weighing IT business risks against costs and this affected the key IT business value levers, resulting in increased costs, higher business risks and a reduced ability to manage and leverage the investment portfolio.
This, in turn, limited the overall business value of IT.
The solution lay partly in managing IT as a business, which meant applying accepted business, fiscal, budgetary, organisational, marketing, management, investment and performance measurement disciplines within the broader IT environment of a company.
To achieve this, CEOs and CIOs must jointly enlist the support of other corporate executives, board members and - where appropriate - financial buyers.
"CIOs must be brought to the executive management table and, once there, be expected to think and function as other executives do." They should become "more well-rounded" business leaders. A CIO`s career path must include hands-on education in management, finance, organisational skills, marketing and communication - as well as technology training.
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