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Business-Driven Architect

Brenda Michelson

McKinsey Quarterly- CTO to CEO: Why we need an annual report for technology

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The McKinsey Quarterly just published a good article on how to communicate the business value of IT to the business community.  The article is a “memoâ€? from the CTO to the CEO articulating the “lack of shared understandingâ€? between business and IT, and then proposes a solution, a co-authored annual report for technology:

“The idea is quite simple: you and I would jointly issue an annual report for technology—something analogous to the annual report for investors and the broader market. This document would not only provide a candid overview of our ability to extract business value from technology but also substantiate that analysis with hard metrics. We would share perspectives on the challenges of technology, convey our ideas about its role in our company, celebrate achievements, and articulate our plans and visions for the future.

To show that we are serious about bridging the gap between technology and the business units and to discourage people from seeing the report as an attempt by IT to plead its own case, it’s important that you and I issue the report jointly.�

The report contains several sections, including an executive letter explaining the premise of the report, with summaries of the technology portfolio’s performance, contribution, financial value and future plans.

The article continues with examples of report sections, exhibits and metrics.  Respecting the premium nature of the article, I’m not clipping the text or exhibits, but the key points I gleaned are:

1. make the connections between business areas and technology visible

2. demonstrate how IT contributes to operational and strategic results (not just goals, but results!)

3. identify and quantify IT & technology portfolio capabilities

4. communicate the above in business terms, using clear graphics, metrics and real-world anecdotes.

If you struggle in communicating the value of IT to the business, I recommend reading the article. [Subscription required.]

And yes, I’m fine with paying for good content, namely The Economist, HBR, MIT Sloan, WSJ and (obviously) The McKinsey Quarterly.  Recession or not, budget line items for “brain foodâ€? are essential.

Brenda Michelson, Principal of Elemental Links, shares her view on architectural strategies, technology trends, business, and relevance.

Brenda Michelson

Brenda Michelson is the principal of Elemental Links an advisory & consulting practice focused on business-technology capabilities that increase business visibility and responsiveness. Follow Brenda on Twitter.

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