Technology, or being digital, takes a front row seat in the C-Suite when a company is thinking of becoming more digital, is going through a digital transformation / adaptation or just coming out the other side. Outside of those times, Information Technologies only tend to get the attention of the CEO or CFO when a major expenditure is about to come up. This can actually be bad for the business as a whole. IT should have a consistent degree of visibility in the C-Suite on a constant basis. Why?
In one form or another, some type of information technology is used in every single aspect of a business, especially a manufacturer and even more so in a knowledge-based business. This holds true for small to medium sized (SME) businesses and to some degree, they rely on IT tools and services even more for competitive advantage or cost-effectiveness for profitability.
What I see too often, is that IT tools and services are seen as a cost-centre only and few senior executives understand well enough as to how they impact productivity and profitability. Thus, a director or VP of technology is seen as someone who “keeps the lights on” and is cornered into being a supporting role driven by keeping costs down at all, well, costs. This creates a tension between the person(s) with responsibilities for IT and the senior management.
The CEO and executive team develop and decide on the strategy for the company, steering it in, hopefully, the right direction. But when IT is seen as a cost and a secondary, necessary evil, the C-Suite may not take into account the impact of technology on strategic decisions.
For example, Acme Plastics decides it wants to launch a new product into the market in the U.S. and Canada. They consider the market size potential, ability to manufacture, sales infrastructure and some marketing to help drive those sales. In each of those elements, being digital, the better use of IT, plays a critical role. Done right, IT will help reduce costs in each area and in sales and marketing, help them be more efficient. If the company doesn’t understand or use Inbound Marketing tools and practices and the sales team isn’t complimentarily outfitted to connect with marketing’s use of digital tools, the launch will take longer and the Cost-of-Goods sold will be higher.
What usually happens is that the digital technologies that are needed come after the C-Suite has made it’s decision. Sometimes so much later that an unplanned cost is added to the product introduction, reducing profitability and creating some degree of chaos between sales, marketing and production.
To avoid this, the C-Suite needs to have “digital” at the front of their minds. When making strategic decisions, asking their senior IT person, what impact it might have on various aspects of the business. If that technology person isn’t one with strategic skill sets and is more functional in nature, it may be good to engage with a trusted advisor or fractional CIO that understands your business and the strategic roles and benefits, as well as risks, of technology.
No part of a business today isn’t touched by technology. As the world becomes ever more digital, senior management needs to keep IT and being digital at the forefront of strategic considerations as part of planning and risk mitigation.