Proving Business Value

Larry Bonfante, Founder, CIO Bench Coach | 1/28/2013 | 13 comments

Larry Bonfante
Many CIOs today are fighting a losing battle. They are trying to keep their jobs or grow their influence but their organizations simply view them as "the cable guy."

While the utility aspect of IT is important (the trains do need to run on time!) it is not enough for a CIO to truly earn her stripes as a business executive. You need to show that you are not only providing a needed service, but are also driving business value.

I learned early on at the USTA that I was working from a position of weakness. Our board certainly understood the value of investing in the US Open. After all, it is our golden goose that funds our mission. They also understood the value of investing in community tennis, which is the mission of the association. But when it came to IT, the value of investing was much more unclear and nebulous to them.

The secret of getting people to value what you do is not to try to teach them more about what you do, but rather to help them connect the dots between what you do and what they already understand and value. Let me give you a few examples.

In this post 9/11 world, it was understood that we needed to have a high level of security and access control at the US Open. When we requested funding to implement an access control solution, we not only focused on the need for physical security on the site, but we also looked at the potential revenue impact. There are public safety laws that limit the number of people we can have on our campus at any given time. One of the benefits of the new access control solution we were proposing was that since we would know how many people were on campus, it opened up the opportunity for us to sell more grounds passes to fans. This resulted in an annual seven figure increase in ticket revenue for a $50K investment. Not a bad ROI!

We recently rolled out a new point-of-sale solution for our food concessions. In addition to the usual improvements from this solution, we were also able to place a small battery-operated wireless device on our stand-alone kiosks. In the past, since these carts were not tethered to our network, we could only accept cash. Given that we could now use the full point-of-sale capability, we were also able to take credit and debit card transactions at these mobile carts. This resulted in about a 20 percent increase in revenue for these stands.

Finally, we developed a suite of online registration applications for our league and tournament players that we were able to license to another organization, creating a six-figure revenue opportunity.

The members of my board may not have understood the technology nuances and implications of these solutions, but they sure understood the revenue implications! Our job as business executives is to find ways to positively impact both top-line revenue and bottom-line results. Technology can be leveraged in innovative ways to accomplish both objectives. So at the end of the day, you need to ask yourself -- are you simply running a utility service organization or are you also impacting your company's bottom line?

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kicheko   Proving Business Value   1/29/2013 7:56:39 PM
Re: Proof
Umair, - But the reality is that IT has a directly linkable relationship with business. For example the CIO should be thinking of which ERP the business would need to enable it perform its five year plan of expanding to two new countries.
mejiac   Proving Business Value   1/29/2013 4:53:59 PM
When the rubber meets the road
"Our job as business executives is to find ways to positively impact both top-line revenue and bottom-line results."

My Program Manager is very adamant about making sure the message is clear. She sometimes becomes redundant at saying the same thing in different ways, but what she has proved is that not all teams think alike, nor talk alike...and somes are more focus on the business side, and others on the marketing/creative side.

So trying to seek concensus amoung all teams is difficult, reason why the same message is repeated over and over until everyone is on the samge page.

So I think that's the leasoned learned, to make sure the message is understood accross the board, from the geek with the pocket protector to the guy in the power suite.
impactnow   Proving Business Value   1/29/2013 10:54:39 AM
Business Value
 

I think it's critical for all of the C suite to understand at least the responsibilities and goals of their peers to effectively work together, I have seen so much useless turf battling in the C suite that wastes valuable time and energy. Aligning goals and responsibilities against the corporate wide goals is the key and everyone will understand their roll in achieving those goals, whether they are a provider, implementer or facilitator.
Larry Bonfante   Proving Business Value   1/29/2013 7:39:14 AM
Re: Proof
I would suggest that while you may  not need enough depth to take on the other C-Level roles (CFO, CMO, etc.) that at least you need a working knowledge of the issues that face these executives, the language to discuss these issues, and the awareness of how information and tecvhnology can impact these issues.
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CurtisFranklin   Proving Business Value   1/29/2013 12:56:34 AM
Re: Proof
@Larry, I appreciate this post, and it raises a question: How much depth of knowledge should the CIO have about the rest of the organization? Should he or she be able to step into any other role in the enterprise? Is a passing knowledge of the terminology and concepts enough? I'm curious, because it certainly plays with the idea of what kind of and how much education is required of the CIO.
Susan Nunziata   Proving Business Value   1/28/2013 11:47:28 PM
Well Said
The secret of getting people to value what you do is not to try to teach them more about what you do, but rather to help them connect the dots between what you do and what they already understand and value.

Larry I think you hit the nail on the head here. This is sound advice for CIOs as well as any other rmembers of the C-Suite (yes, even the CFO). IMHO, everyone in the organization should operate from this mindset and have a holistic view of how their actions effect the entire organization. It's about understanding the big picture even if your job is about focusing on the minutiae.
Pedro Gonzales   Proving Business Value   1/28/2013 6:04:27 PM
Proving business value, essential
I think you article makes sense.  If IT is aling with business and the proving business value is shown to board members or stake holders then it can be easy to demonstrate the need to provide more funding and support for IT.
Umair Ahmed   Proving Business Value   1/28/2013 4:27:51 PM
Re: Proof

@ Kicheko: The main objective of every commercial organization is to improve the top and bottom line growth. Functions like marketing and finance are considered directly linked with the top and bottom line performance, and that is why they are given too much importance. But the case with IT is different, which is considered as cost center having no direct connection with the main organizational goals and objectives. That is why, CIO and IT representation is missing in most board and business meetings. 

Umair Ahmed   Proving Business Value   1/28/2013 3:59:20 PM
Re: Proof
they need to understand the front line of the business so they can offer solutions, too. Otherwise, it seems impossible to imagine the CIO learning it all.

Excellent point, David. To perform a role of the business executive, you need to understand the business well. But the problem is that most of the times neither the organization teach IT folks the business knowledge and nor the IT folks are interested in learning it. On E2, we have discussed much on CIO-CMO relationship and cooperation. Involving IT guys with marketing folks seems a good way of teaching business knowledge to IT people and makes them think IT as profit center rather than just as a support department.

kicheko   Proving Business Value   1/28/2013 3:09:41 PM
Re: Proof
The idea is to get competitive advantage for the company via technology. Because everyone on the C-bench has a duty to bring in competitive advantage through their docket. Finance guy thinks of driving down costs, marketing guys thinks of marketing channels and target audiences, and the Tech guy has tothink of getting the best technology and optimizing it.
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