Peter Sattler, vice president and chief information officer at International Flavors and Fragrances, answers ten questions you need to ask when evaluating the effectiveness of your IT function.
1. How is IT using technology to support the business?
It is important that CEOs be aware of the direction their IT organization is facing. Is it just internally facing, or is it concerned with making top- or bottom-line improvements? Sattler says understanding that will allow a CEO to gauge how involved the IT organization is with the successful transaction of business and the leveraging of technology to drive efficiency.
2. How do you reconcile key IT initiatives with the bottom line?
The CEO needs to make sure there is a business case for every project in the IT portfolio. Not every initiative will translate to improvements or bolster the business strategy, and in those situations, the CEO must be aware of the impetus and cost in order to make an executive decision on its fulfillment. “In the end,” says Sattler, “it’s all about what we’re doing to improve shareholder value.”
3. How can we best use the analytics that you provide?
CEOs need to be able to interpret analytics so that they can report in an informed manner to their board of directors. Those numbers will show them trends that they can study for correlation to the business strategy they’re driving. They will also identify where in the business they may need to intervene to improve results.
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4. What do I need to understand about the IT environment to better lead my department?
A CEO needs to understand the capabilities of IT and what it can deliver. It can improve the efficiency of the business from the inside and the quality of the product or service externally. “In a B-to-C world, IT can help drive value to the customer,” Sattler says. “Having a grasp on the department’s potential and the information it can put into a CEO’s hands helps leadership make the right decisions.”
5. How do your IT projects align with our strategy?
Asking this question will allow a CEO to gauge where resources are being directed within IT and if they are yielding worthy returns. IT’s workload will comprise new projects and ongoing support. While the perfect ratio will vary by company—Sattler says his goal is to reach a 50-50 split—both have the potential to drive down costs whose savings can be reinvested.
6. What trends does our company need to be aware of?
It’s important for CEOs to have a basic awareness of the trends in the market, especially threats within IT, so that they can plan for them in strategy sessions. Sattler says the key trends CEOs should be focusing on now are big data, the cloud, cyber security, and intellectual-property theft.
7. What major challenges do we face that IT can help us solve?
This question will allow a CEO to determine the true competitive advantage the IT function creates for the business. If the answer suggests IT isn’t helping differentiate the company from the competition, but rather is focused on the back office, that should be a red flag for leadership.
8. What is IT doing to support innovation in the company and its own organization to deliver better solutions?
Besides keeping the lights on, one of the key advantages IT brings to a company is innovation—whether through research and development to improving processes and efficiency. A CEO should be sure IT is doing more than maintaining the status quo by helping the company progress.
9. What are you doing to help control risk for the company?
With the openness of the Internet and state-sponsored hacking, Sattler says CEOs should be cognizant of what their IT organization is doing to protect the assets of the company. “Whether physical or intellectual, IT has a responsibility to the shareholders and the board to protect its property,” he says.
10. How is the IT organization managing its budget effectively?
Every business function has a fiduciary responsibility, and it is imperative for a CEO to be conscious of those areas where funds are being poorly allocated or wastefully spent. IT can be a costly operation, but Sattler stresses that aggressively managing contracts and making cost-conscious decisions—like opting for generics over name brands—can get the job done without breaking budget.