Strategy Blog

You Can Do Anything, But You Can’t Do Everything This is the final installment of a three-part series dedicated to the critical success factors for today’s CIO: financial acumen , business acumen , and technology acumen. Technology Acumen Business model changes impact momentum for an enterprise: from product and people to customers and investors. If momentum stalls, it can be difficult and sometimes impossible to regain. Technology should not be an obstacle to momentum, technology should underpin and enable an enterprise’s ability to sustain momentum. With that in mind, and the year unfolding in front of you, take the time to look back over the past two or three years and think about your top three “ No Regrets ” technology decisions. A “No Regrets” decision is one that if you had it do over, you would make the same choice again – regardless of its current state. It represents your point of view as a CIO, your decision-making, and has a lot to do with what defines you as a leader. This type of decision might be a short effort or a longer initiative. It is not judged by cost or longevity; it is judged by its importance – its impact on creating value to the business. A CIO who enables and/or leads business and technology adaptation during times of rapid growth and change will move the business forward, which is why technology acumen is the third side of the triangle for a CIO. Think about where we are now. The first quarter of the year is frequently when various projects and initiative requests get a hard look as business priorities, goals and financial considerations become clearer. This is the right time to get focused on strategic execution , here are three factors for CIOs to use: Table Stakes – Everything Can’t Be a #1 Priority – underpinning any successful technology execution you’ll find cybersecurity and operational resilience. These focus areas don’t show up on the top three list of priorities every year; that does not mean they are unimportant. It means they are assumed. They need continuous attention to create a stable environment and foundation to support everything else, particularly in high-change environments. They are cross-company, cross-functional, cross-partner, and cross-technology. If they are not kept at the right level of maturity, a CIO will be challenged to focus on other priorities. Architecture Matters. Focus on Platforms Before Products -- Looking again at Board priorities for 2022, #2 on the list is the pace of digital transformation. Technology has rapidly increased in criticality to the enterprise ability to pivot and succeed, and focus is on Customer Experience. Architecture is more critical than ever. It must be practical, implementable, focused on platforms (third-party/partner integration, data, connectivity) and create value to the business model. Look where you placed your technology bets in 2019, 2020, and 2021 -- where did architecture play into them? It is not uncommon for architecture to go by the wayside in times of cost reductions and organizational change, so be thoughtful about the practicality and what the greatest need is. Interim & Fractional Architects can be an effective solution for some environments. Architecture is both strategy and execution, and an important capability to evaluate and create technology acumen in an organization. Much Has Been Written About the “Great Resignation” -- Talent is number one on the list of 2022 Board priorities for many companies, according to an NACD Survey . Meanwhile “The Great Resignation” terminology is rapidly evolving. The Great Resignation is not a particularly insightful term. In recent conversations with clients and colleagues on this topic, three important points emerged: The focus is shifting from working for a brand to working for a leader. Think about the implications of this for a C-Suite and C-1 management team – it’s about what you and your whole management team offers. A global executive search firm has placed twice the number of positions compared to pre-COVID cadence. Many are looking for re-employment, skill, learning and career development opportunities. Recruit and re-recruit talent who are excited and want to be part of something, and spend time with them, coaching and developing. Stay on top of your organization, and understand how your people are doing, from structure and technology capability, to engagement, commitment, and aspirations. Keep your organization competitive in the talent market by having the right people in the right roles, ensuring a commitment to career and skills development opportunities, and aligning your organization and people with your technology choices. I hope you enjoyed this series on CIO Value Creation, as viewed through the lens of financial , business , and technology acumen -- all of us at StrataFusion look forward to hearing from you. If you’d like more information about StrataFusion advisory services, contact us today!

Business acumen is crucial to understanding the business and balancing priorities. For most companies, annual autumn budgeting rituals are underway right now. While this time of year is a favorite season for many, in IT it is a pressure-filled quarter: a race to the finish to deliver those commitments due, time to properly utilize approved funding before it disappears with the falling leaves, and a window of time to assess and renegotiate many technology vendor agreements - there is a lot going on. Where does this leave the CIO who is preparing for 2022? Throughout the pandemic, companies experienced (and continue to experience) the direct value of technology deployed at an impressive pace, followed by modifications through test and learn. This is all based on immediate critical business results experienced in a very unpredictable marketplace. These dynamics have forced a lot of unanticipated change in IT planning protocols, starting with prioritization of the annual “call for projects.” As companies were hit with the project choices toward the end of the 2020 first quarter when final decisions are usually made, the pandemic and business interruption meant those projects had to be whittled down to a critical few. The priority criteria had to be based on business need, organizational need and bandwidth. The companies and leaders that recognized the call-to-action early and made the hard decisions were better positioned to step up and into new opportunities than those who decided to hunker down, and hope & wait for the return of “business as usual.” The key for those CIOs and IT organizations that emerged better and stronger was astute business acumen . Their decisions were not purely technology for technology’s sake, they were based on applying extensive knowledge of the business model on the fly: the customers, the products and services, the processes, and how quickly they could effectively apply technology solutions without a lot of guidance. Second, also key was the ability to predict what was most likely to be critical in the long run -- the IT strategy components that would both sustain business throughout disruption and position it for opportunities to move forward. Know Your Business, Know Your Strategic Priorities As the budgeting process proceeds, consider the positive learnings of the past 18 months: First, treat prioritization pressure as a positive and keep the list short. This allows focus and creates space for other unplanned changes that are likely to appear. Directly deliver business value . Ask what this does to make the business better and how you can measure it. This is the business case – the value proposition, pick your highest strategic digital initiative thoughtfully. Keep the Technology prioritization list short, actionable, and impactful. Collaborate with other business unit leaders. Develop a balanced view and full understanding of the business dynamics. While the annual budget process may seem ritualistically similar across many companies, the core of what is being planned at many companies has evolved dramatically in the last year. In 2021, many organizations were in recovery mode because so many things had to be set aside to respond to the crisis at hand. Today, with leverage points and economics in the marketplace still morphing, new and existing products and services are now often operating in mix-and-match combinations. All this transition has driven massive digital adoption in a short period of time. Business acumen is crucial to identifying top technology priorities, just as financial acumen is fundamental to knowing how business value is measured. If you’d like more information about StrataFusion advisory services, contact us today! This three-part series is dedicated to three critical success factors for today’s CIO: financial acumen, business acumen, and technology acumen.

IT value means many different things to many different leaders. For some, it’s about solving a big issue -- like remote work during a pandemic. For others, it’s about eliminating outdated technology or modernizing back-office systems and process. But all CIOs need to have a well-rounded view of the business and industry landscape. This three-part series will be dedicated to the critical success factors for today’s CIO: financial acumen, business acumen, and technology acumen. Financial Acumen Our first post in this series starts by following the money: financial acumen. That’s important because IT value many times boils down to finance. Do most CIOs have that level of financial acumen? Probably not to the degree now needed. And that’s why it’s important to have at least one of three things: A great relationship with the CFO An “IT CFO” role dedicated to the IT organization A mindset of managing an IT business unit Financial acumen Is crucial to be able to follow (all) the money, follow investments, identify low-hanging fruit that impacts revenue, and identify the big opportunities. Financial acumen doesn’t mean a CIO has to navigate like a CFO, but it does mean a CIO needs enough knowledge to effectively partner with the CFO for maximum impact to help drive success. It’s important to note that the CFO’s role is also changing, focusing more than ever on AI and data. This means that the CFO/CIO relationship is not only strategically critical but also incredibly symbiotic. CIOs and CFOs have a lot to gain from each other, so remember the importance of finding and understanding all the common ground that lies between these leadership roles. Know Your Business, Know Your Numbers Financial acumen and collaboration are key to understanding common top-line key performance indicators (KPIs). It’s important to remember that KPIs measure business results, not standalone project or technological progress. It’s important to follow the money from technology efforts to revenue changes, customer experience engagement, service product or service quality and reliability. Post 2020, there is a shift in how companies realize and measure IT value, as well as how CIOs will measure success moving forward -- because it’s not about progress, it’s about results. Three steps to measuring IT value (for results) Identify and quantify the outcome (revenue, customer or market growth, employee engagement, lead conversion, etc.). Pick one as primary and one as secondary. Identify and quantify the financial spend Impact (redirected spend; capital/depreciation/opex) Obtain results in less than six months The financial and economic aspects of business can be a weak area for IT. For smaller companies and companies in transition that may not have a CIO or CTO, there is an opportunity to consider fractional CIO and fractional Office of the CIO/CTO services, which can bring deep experience to the function at a fraction of the cost. Fractional services can solve a lot of client headaches and budget woes. And we know it’s working when a client tells us “this has paid for itself four times over” in under six months, and “you’ve saved me an entire year of work” getting a handle on IT economics and understanding the spend. Always follow the money. If you want more information on fractional services , we can help! Contact Elinor MacKinnon

(hint: it’s all about building products and selling products) During the past 12 months, we’ve seen how CIOs can drive business resiliency and lead through crisis with technology solutions that improve operations, security, innovation and transformation. Beyond traditional IT hardware and software, outcome-focused CIOs are immersed in how technology can continue to amplify the business, from enabling and improving trusted remote work solutions to bringing creative ideas to sales, including improved websites, conferencing, and more. But there is much more CIOs can do to partner with and enable the work happening in the business. We’re talking about product. The things a company produces. Here are two key areas where CIOs can help drive profitability with their business partners. Building the Products and Services Think about your company’s product, whether it’s software, hardware, or services. Technology can impact how products are built by enabling engineering teams. This includes reducing friction throughout design and production and all processes in between, enabling both engineering and manufacturing. Selling the Products and Services CIOs can be surprisingly important influencers in how a company can improve its selling game. CIOs who are partnering effectively with business peers may go on sales calls to see customers (or sit in on virtual sales calls). Some CIOs may even take occasional customer support calls to better understand issues and interact directly with customers. Technology will certainly continue to be a conduit for business resiliency, and CIOs are crucial to enabling business to move much faster -- especially during times of disruption. That means expectations of IT will continue to rise. Successful technology leaders will be much more involved in supporting innovation, research and development (R&D), and securing intellectual property (IP), all of which are the lifeblood of business. This means CIOs should flex their credibility with internal business partners by taking a partnership stance to help accelerate business, from increasing innovation processes to reducing sales friction with things like virtual demos. Creating stellar experiences will be crucial – for both internal stakeholders and customers. Contact us today Let us know how we can help you and your team turn IT into a key profitability driver!

The world of M&A is complicated and nuanced. Whether a spin-off, split-off or carve-out, CIOs in particular face incredible complexity when factoring in people and culture, intellectual property, organizational process and especially IT systems and foundational digital solutions. While acquisitions have complexities in merging cultures and systems, many times breaking apart is far more challenging, especially when considering regulatory, legal, privacy and security factors. Integration provides the luxury of time to operate independently and strategically, while a divestiture is driven by the all-important TSA (transition service agreement), which impacts IT more than any other division. Regardless of the flavor of M&A, CIOs encounter some of their toughest business problems during a divestiture or a merger. Here’s the expert advice you need to know. Advice from the Trenches: Ken Crafford , SFG founding partner, says it’s crucial for CIOs to get ahead of the curve early to understand the direction needed for technology-related activity. Your first step is to work hard to understand the things you can’t manage. That may include: Security and privacy, including the impact of global privacy regulations (country-by-country) Data retention, as well as understanding where all your data sits (is it US or global, or both?) Setting up the information technology foundation of new entity, as well as the new business rules The risk levels, from every angle SFG Partner Mark Egan literally wrote the book on M&A when he contributed a chapter focused on M&A to CIO Perspectives. His advice underscores three main focus areas: A sense of urgency - Get it done in a reasonable timeframe, like 90 days Stay focused – You don’t want it to go on forever, but it will if you let it Concentrate on the people - Invest in great communications and turn up the empathy SFG Partner Lars Rabbe says to deeply understand and be true to what the main reasons for M&A action is. “Too often the fog of war distracts from this and the real benefits are never actually achieved,” he says. Be realistic about the timing and cost of achieving synergies, because it is hard work to eliminate redundant systems Understand what gives the greatest benefit, such as merging customer accounts, prioritize those integrations and don’t allow complacency When in doubt, fall forward Navigating the Challenges During times of change, the unknown is always the biggest challenge. Leaders often struggle with the age-old question: “How do you know what you don’t know?” When planning for a merger, spin-off or carve-out, having an experienced perspective can be a determining factor in success or getting mired in challenges, such as: When juggling multiple activity tracks around technology solutions and data systems during a merger or split, is all about staying on schedule. Grace periods are expensive. Understand future-state architecture as early as possible so you can set the stakes early. Personal connection is king. Cultivate and act on personal relationships, especially during stressful times. Show people you care by engaging and showing your face. You don’t have to be perfect, so don’t have that expectation of others. While the natural inclination of any strategic leader is to work from the “known,” sometimes the best guess is just as effective Get as much help as you can. External expertise from those who have traveled the path can provide a roadmap to be efficient, empathetic and strategic. The most valuable player on any deal team is someone who’s done it before, a lot. Collectively, SFG partners are the MVPs who’ve worked more than 320 deals for companies large and small. This strategic perspective of the landscape from the CIO/CISO point of view, and access to tried-and-true playbooks build on decades of experience, will help any company approach M&A with efficiency and empathy. We can help with your next deal , too.