The Chief Information Officer (CIO), sometimes called Chief Technology Officer (CTO), coined in the early 1980s is a rather recent addition to the corporate governance structure. It makes sense that the position coincided with the technology explosion as companies implemented IT to gain competitive advantage. Arguably, what was once IT competitive advantage is now essential for daily operations. Even so someone has to evaluate IT investment to be sure that it serves the organization by providing benefits at an affordable cost. Without that oversight, technology projects would be rapidly become science projects that few, other than the IT department, could understand.
No disrespect to IT folks. As an engineer, I have seen this phenomenon many times. A concept to make the organization more efficient, a product more user-friendly or automate manual tasks spirals into the depths of a techno-black hole with little hope of escape. As an engineering manager, I always put two engineers on a project as a way to get a product suitable for the end-user. Often one engineer working alone would come up with solutions too complicated for the casual user. Technical elegance usually trumps corporate benefit in the technology mind. For the company to realize a return-on-investment from any technology project, someone has to watch the ROI and that’s where the CIO is essential.
The CIO doesn’t have to be a technology expert. In fact, many of today’s top CIOs don’t have a computer science, engineering or programming background, they have a business background and leadership skills. They have learned how to apply technology to solve business problems, foster change and manage the bottom line.
Although definitions will vary, here is a short list of common terms so that you can – Ay oh whey oh, Talk like a CIO.
ROI – Return on Investment is not a uniquely CIO phrase, it is spoken freely by all C-levels and is specific to the investment efficiency required by an organization. Every company defines its payback period and specifics for an acceptable ROI. Often a technology project does not generate revenue so the ROI can be tricky to quantify. Here is where the CIO can be creative and use avoided costs or cost savings to frame the ROI discussion.
Payback Period – The amount of time that it takes to make up or payback the cost of the project. Usually used for revenue projects, but the same rules as in ROI can apply.
Technology Proposal – Whether you are developing a Request for Proposal (RFP) to bid the job or completing the job in-house, you need a proposal that has a statement of need and cost-benefit justification. The CIO is critical in ensuring that the proposal meets the organizational needs and obtains budget approval.
Cost Benefit Analysis – Exactly what the name implies, to determine if the project is worth funding. In any economic analysis, do nothing is always a choice.
Bleeding Edge Technology – Technology so new that the risk and expense is high.
State of the Art, Leading Edge (or Cutting Edge) Technology – Technology that is at the pinnacle of available solutions. It may or may not provide competitive advantage. This term can be synonymous with Bleeding Edge Technology.
Buy In – The commitment of stakeholders to support the decision.
Send me your terms and definitions that help you “Talk like a CIO.”