Organizations are increasingly turning to IT for revenue-generating initiatives. Here’s how IT can drive value at the intersection of company and client.
Since joining Christiana Care Health System almost a decade ago, CIO Randy Gaboriault has watched his duties evolve into more of a “CIO-plus” role. “The role of CIO has changed from strategy participant to strategy enabler — a deep influencer if not strategy shaper,” says Gaboriault, now CIO and senior vice president of innovation and strategic development.
Many CIOs share this same trajectory. As part of their strategist role, CIOs are playing a central role in creating revenue-generating initiatives, including new products and services.
1. Establish your business cred with executives and the board
Revenue-driven CIOs must first have their operational house in order. “There are no rumblings that laptops or apps aren’t working or that tech isn’t able to produce projects on budget and on time,” says Khalid Kark, U.S. CIO program research leader at Deloitte. Executives and the board must have confidence in their tech leader to drive that business change.
When meeting with executives and business leaders, CIOs should always bring new insight to the conversation. “Do they come out with Aha! moments?” Kark says. “Are you adding significant value to those conversations?”
CIOs must also ensure that they and their technology/digital teams are included and have a seat at the table during the organization’s strategy development, specifically around growth strategies and initiatives to drive revenue, says Sherif Mityas, chief experience officer at TGI Fridays. “This allows the CIO to see and have input into the objectives and potential use cases that could be enabled through technology to drive growth,” he says. “Having IT just shotgun revenue-generating ideas in the dark outside of the overall strategy and without tight integration with sales, marketing and operations is a recipe for disaster.”
The IT team at Alvarez & Marsal develops and manages technology for 19 specialized practices. Garcia relies heavily on his senior leaders to sit in with external customers to go through technical solutions, listen to concerns and suggest new technologies.
“Being able to interact directly with external clients is really table stakes for us right now,” Garcia says. “If your IT folks can’t sit in front of a client, it becomes extremely difficult to enable a revenue-generation technology culture.”
3. Focus on the customer
More than half of CIOs polled (55%) in the State of the CIO survey say they are learning about customer needs in order to deliver products and services.
At TGI Fridays, every innovation decision must first pass the threshold of “is it right for the guest?” Mityas says. Part of his role at TGI Fridays is to ensure that his team infuses guest data, feedback, insight and analytics in everything they do. That data serves as a starting point for considering new technology initiatives related to guest-facing and revenue-generating efforts.
Revenue-driven IT organizations have close relationships with vendor partners who can help them understand the innovation disruption that is going on in their industry, and work with them to enhance their products and brand.
Many CIOs turn to external startups to ensure they’re always looking at new and innovative ways to drive revenue. At Northwestern Mutual, instead of waiting for startups to come to them, Karl Gouverneur, VP, head of digital innovation and CTO, would put out a set of technology challenges beyond the company and invite startups to propose solutions.
Garcia's team worked with a security provider to enhance one of its products that the vendor later offered to other clients.
"We changed that product offering, and it is now something they sell to the world as part of their new product offering suite,” Garcia says. “While we’re not receiving any monetary benefits from the product, we are able to partner with the vendor and our internal colleagues on potential client engagements.”
5. Cultivate a mindset of technology as an investment, not an expense
In his early days as chief technology officer at insurance company National Life, Nimesh Mehta remembers IT constantly fighting for budget dollars. Now as its CIO, “others [in the business] do it for me. We’ve changed IT from an expense to an investment mindset,” he says.
Mehta promotes this mindset by focusing on how technology impacts unit cost. “When operations reduces costs, it comes out in technology. They drop $10, we add $12, but you have to look at it end to end. It’s OK for tech costs to go up if your enterprise units are going down. That’s very hard to get people to wrap their heads around.”
6. Improve IT’s flexibility and agility
Mehta’s IT team often applies new applications to existing technologies to deliver solutions to its customers, which requires some trial and error. “We believe in the concept of fail fast — trying things out, piloting before we deploy” and knowing when to move on. Lovelock says this strategy increases the likelihood of success in generating revenue.
“Dynamic organizations are more likely to outperform their peers, sometimes significantly so,” Lovelock says. They’re able to quickly change their technology, business and processes. “That’s an organizational trait,” not just IT, he says. “It’s not impossible to grow revenue with a measured approach, it’s just less likely.”
7. Invest in building and mentoring talent
CIOs of revenue-driven IT organizations invest in, support and mentor their people to build teams that can drive change within the organization, Kark says. “In today’s tight talent market, they know how to hold on to high-performing talent and constantly provide opportunities for stretching and growing that talent.”
These CIOs are also very conscious of the brand that IT has in the organization, and they curate it much more than other CIOs, he adds. “They spent a significant amount of time building their leadership team to be as good at communicating as they are,” Kark says. Inside IT, CIOs should focus on building a culture and brand for the IT organization that allows them to have conversations with business units and executives, and to communicate more effectively.
“When done correctly, there is no revenue-driving initiative that is not enabled through IT,” Mityas says, “but it starts with the connection upfront and the understanding of your strategy and purpose to remain focused and efficient with your organization’s resources and investment for the highest avenues of growth and ROI.”
Originally published in CIO.