In a recent conversation with David Chou on the excellent podcast IT Visionaries, Ian distilled a key takeaway.
The CIO needs to understand what metric the CEO is using.
The IT budget at most organizations is a considerable portion of operating costs, Chou explained, and most CEOs are interested in reducing costs: “If they can shave 2%, 5% off IT costs, that’s a lot of money.”
But Chou explained that at Kansas City Children’s hospital, just by building a customer facing scheduling tool for appointments, they were able to increase the number of patients seen by 17%.
Since hospitals earn money based on how many patients they see, this was a massive improvement to the hospital’s bottom line. Chou was quick to point out to the CEO that if he could have 1/2 of that new revenue, he could do even more.
Good executives everywhere know their business. But what they know is backward facing. They know what was done. What worked in the past. Because they have never seen the kind of digital transformation occurring in what Gartner calls the “4th Industrial Revolution,” they have no frame of reference for understanding how automated technology could revolutionize what they do and how they do it.
Chou says the “I” in CIO should also stand for “Influence.” It is imperative for CIOs to think bigger, and understand that the CEO has one core metric–the bottom line.
When CIOs are busy “keeping the lights on,” it’s hard to convey just how transformative IT can be. But we are at a point where this 4th Industrial Revolution is in the process of changing things on the order of the introduction of the telephone at the end of the 19th century.