When defining IT strategy, CIO ought to balance Business Division requirements and Enterprise global strategy. Sometimes it fears strategic swings which may wipe out some of his achievements. He usually keeps at some distance Business units and CEO.
For divisional companies, IT Divisions use to deal separately with business divisions which support the cost of their own systems, and share the cost of a few shared systems. Each business division defines its own strategy and setup its requirements to IT Division regarding maintenance improvement and new projects. Then budget is approved by CFO and CEO.
CFO is at the crossing point of budget process control. He challenges separately IT budget and Business Division budgets. After this round budgets are ready to go through CEO approval.
This type of relationships are on the pattern supplier/customer.
IT Division is view as cost unit. As soon as operations are engaged, CFO come back to request how much he could get back from initial budget according real timetable. IT division is challenged on delivering value to Business Divisions : Quality of Service is not good enough , new projects are not delivered as quick as wished. IT is challenged as well on costs by CFO : why are you setting up this infrastructure ? why are you planning to train your staff on this new method ?
When business processes management orientation comes up, it usually brings with it, big CRM or SCM projects which are undergone as big reingineering. The result is a disruption into IT and Business units relationships. Then business takes the lead and shape the projects with external IT suppliers which appear more reliable and more competent than internal IT.
It is urgent that IT Divisions target to exit from this position and develop a true partnership with Business Divisions. Therefore, it requires big changes in processes, in competences and in mindings.
From my point of view the first point is costs transparency. Business Divisions need to understand, besides the gains they get from IT, the costs they bear. Some CIO fear costs transparency because CFO and Business may find arguments to harden budget challenging. Benchmarks with external integrators costs may also get the things worse. But, when you consider that IT Divisions main goal is to manage the rolling out of the company IT Strategy for several years, it is much different than what external integrator companies aims to, which is to provide optimal cost for given operational services. Investments in IT Divisions, help them to better support company business and also to improve their own processes which will make them better to performing their first purpose. A kind of virtuous circle !
The second point is projects timely delivered. Time to market is a fundamental requirement from Business. Usually, this point is adressed by reviewing project execution performances and pointing out IT Division weaknesses. Removing weaknesses should not be taken as a change prerequisite, but been carry on in parallel with IT and IS infrastructure improvements. IT modernisation is not only matters of practice and competences, but as well matters of technical environments. What will be automotive plants performances without robots ? This point brings back again to strategy capabilities of IT Divisions.
When IT Divisions succeed in undertaking such changes, they may develop a true partnership with business and change their position regarding CFO and CEO.