The global financial crisis and ensuing economic uncertainty have shifted CIOs’ focus from innovation to optimization. To drive digital business discovery and growth, CIOs must establish a new relationship with financial risk and uncertainty. They must “flip” their mindset to dynamic IT financial thinking.
- Key Question
- Opportunities and Challenges
- How this report will help
- Digital leadership is tied to flipping financial thinking
- Flip from risk-based to uncertainty- and faith-based portfolios
- Flip to “every business unit is a technology startup”
- Flip prioritization to emphasize startup and venture capital funding
- Flip roles to include leading digital business investment
- Flip to “every enterprise is a technology company”
Digital leadership is tied to flipping financial thinking
- CIOs and their enterprises have forgotten how to innovate and manage finances
- CIOs must drive digital business by leading the activation of renewed innovation and increased financial maturity
- CIOs must maintain a financial response to digital business uncertainty (equally useful for other big change)
- CIOs should evaluate existing risk- and uncertainty-based business models to drive improved financial performance
Flip from risk-based to uncertainty- and faith-based portfolios
- Flip strategic spending to fear/fact/faith-based portfolios
- CIOs must not throw away ROI-based investment decisions, but recognize that all investments and value are not equal
- Understand the basic definitions of risk and uncertainty
- CIOs should lead regarding uncertainty to improve their “to be determined” future state
- CIOs should prioritize and shape risk- and uncertainty-based investments
- Flip from cost minimization to balanced portfolios
Flip to “every business unit is a technology startup”
- CIOs should no longer view shadow IT as an enemy of the enterprise
Flip prioritization to emphasize startup and venture capital funding
- CIOs must build a funding pool for startup and venture capital endeavors
- CIOs with advanced aspirations or uncertainty should consider competitor joint ventures to fund startups
- Government CIOs should consider creative venture capital funding even if it is foreign to the mission
- CIOs should experiment with startup and venture capital funding concepts to generate excitement for digital business
Flip roles to include leading digital business investment
- CIOs and stakeholders should consider creative treatment of funding and digital business leadership roles
- CIOs and stakeholders should consider adding new roles in the business and within IT to drive digital business legitimacy and commitment
- Flip the role of CIO to chief investment officer
- CIOs should combine new roles with new value metrics, to drive dynamic value communication for digital business
- CIOs should consider replacing command-and-control budgeting with new value metrics
Flip to “every enterprise is a technology company”
- CIOs and stakeholders should consider the financial issues and imperatives of technology companies
- CIOs and stakeholders can use an analyst’s view of the financial implications of becoming a technology company
Conclusion: Help manage unlimited digital business demand with better financial management
- Convert uncertainty into risk
- Use better financial acumen within the IT organization as insurance against future digital business course corrections
- Beware of the creative side of digital business, which makes every employee an eager system designer
Appendix: Case Studies
- The City of Las Vegas uses dynamic stakeholder communication to confront uncertainty and drive transformation
- Freddie Mac invests in IT transformation to enable the rest of the business
- What CIOs must know about investment uncertainty when every enterprise is a technology company
- Related content
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