Yesterday, I attended the Center roundtable on Customer-Centricity and the discussion about the role of the CIO in leading the organization to be externally customer-focused prompted my thinking on the role of an IT Steering Committee in connecting the CIO with his or her executive peers to ensure IT is aligned with the business and the business priorities. On the call, I mentioned the concept of creating an IT Steering Committee, and I thought I would expand on that idea a bit in a post.
I teach in an IT course in an MBA program at a local university. At the start of each class I ask the students to go back to their companies and ask four questions:
1.Does the company have an IT steering committee to prioritize projects and who serves on it?
2.What is the % of revenue of IT spend?
3.What is the % of Capex expenditures for IT?
4.Does IT chargeout their services?
Each time that I ask, I get a broad range of responses to question one. They range from the CIO gets all the requests and decides what to do; the CIO makes all the decisions; the decisions are made by a committee run by the CIO; the CEO and the CIO make all the decisions and finally, the officers of the company meet on a regular basis and decide what should be done. There are more variations but these are the major ones.
I can see the look of dismay that crosses the students’ faces when they see the myriad of approaches that are being presented by the students. After all, most of the students are non-IT’ers who are taking the course in order to learn how to work with the IT department. They are surprised at the diversity on something as fundamental as project prioritization.
Although I am not surprised by the variation, I continue to reflect on this situation. IT should have a set of basic operating principles which should be sacrosanct and universal among all IT departments. The makeup and the functioning of the IT steering committee should be one of them. In my judgment, the IT steering committee should be composed of the officers of the company and should be chaired by the CEO. Period. The only variation that I would allow would be to replace the CEO with the COO if appropriate.
Here are my reasons:
1.The officers of the company are the only people who have a complete grasp of the strategic plan for the entire corporation. They are the only ones who have the insight and the power to add projects, exchange projects or delete projects based on resources, budget and plan. Lower level executives should not be put into that position.
2.The CIO should never be put into the position of deciding priorities. If the CIO does this, then the CIO’s position is compromised relative to all the officers. In this scenario, the CIO is required to determine that one officer’s priority is not as important as another. Although the CIO may be right, it should not be the CIO’s call. The decision should be the consensus of the entire officer group based on the strategic plan. This approach is politically very dangerous for the CIO.
3.The CIO, as a member of the steering committee, is allowed to express views as to the appropriate automation agenda just like any officer may comment on their or any others requested project. Each officer should be able to defend his or her project before the committee. The CIO should bring technical expertise to the conversation to either support or discourage the discussed project. The CIO must also be in a position to defend any large technical infrastructure projects.
4.This is the only way to assure that IT is aligned to the business. We still hear stories about IT departments not working on the projects that the company wants and needs. That cannot happen when the officers all participate in deciding what is to be done.
5.This approach avoids the “squeaky wheel” approach which allows powerful executives to dominate the automation agenda while less powerful departments are ignored even though their requirements may be more strategic.
We used this approach at my company for 25 years and it was very effective. Never once did someone come to me to ask why their projects were not getting scheduled. They knew that that decision rested, not with me, but with the IT Steering Committee. CIO Members can listen to the archived recording of the Customer Centricity roundtable mentioned in this post. You can also learn more about Customer Centricity by reading the Center’s research.