CIOs did find that they have conflicting tasks that they need to manage, the main being exploratory [work], but there's no immediate financial benefit from that whereas with exploiting [technology], there is a financial benefit. People like exploratory work more than exploitative work because it's more challenging.
So they've got that constant tension that they need to fight. There was one CIO who had a KPI structure -- responsiveness, flexibility and one other metric. Those three metrics were competing, so he had one designer whose job it was to maximise conversation from the websites of someone who visits and buys some products.
But then they might do something unethical so you would have someone in quality assurance whose metric is "net promoter scores" fight against the other person to achieve a balance. That maintained tension within the department was something else we found interesting.
The other thing that's key is revenue focus of IT. If your IT division is a cost centre, it limits you whereas if you're tied to revenue outcomes, that's a way to enable exploration and exploitation because you are really valued by the business.
That's a big thing for online sites. One CIO said that [he ran] an online site, the revenue comes from the online site, which put him in a very strong negotiating position.
CIOs need to be accountable but also need to have autonomy from the board -- the board can't be telling them what to do but they do need to be held accountable, otherwise operational matters overwhelm the investments that you are undertaking.
CIO: How did you measure this?
Kalgovas: We found that we could conceptualise this by creating a benchmarking matrix, which enables CIOs to figure out where they sit on that matrix. The barriers are linked up so they can talk about where they are sitting on that matrix and how they can improve.
CIO: What are the two biggest takeaways from this research?
Kalgovas: Number one is [IT needs to be viewed as] a profit centre and number two is having a mature organisation. The CIOs are saying their [IT departments] are more mature than the organisation they sit in, which is contrary to what most people believe, which is that an IT department is an immature department and the business is leading the way.
In contrast they say, 'We know about strategy and processes but the average person in the business doesn't care, because they only care about my little department not the whole of the organisation.'
This is very different from the perception of IT just being backroom and they are saying, 'We are the enabler of the strategy of your business but you are keeping us just as a functional silo and you wonder why we can't perform.'
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