A tech leader’s role has immensely changed over the past few years, thanks to the technological advancements driving the digitization of businesses today. Now, IT leaders should not only understand how, when, where, and why information is disseminated throughout the company, but they also need to have an understanding of the business as any CEO would.
25% of CIOs will be held accountable for digital business results
A study by Gartner shows that by 2024, 25% of traditional large enterprise CIOs will be held accountable for digital business operational results, effectively becoming “COO by proxy.” It has also predicted that by last year, 100% of roles in IT will require an intermediate level of proficiency in business acumen to execute the digital business strategy effectively.
While the latter prediction didn’t fully happen, the changes in the landscape of the IT industry show that leaders in the field should have a better understanding of the business, learn how to interact with visionaries across the business, and drive a smart digital agenda. Technology will always be the foundation, but now, business should also be part of the mindset of IT leaders.
Business acumen isn't a single skill.
Instead, it is a much broader set of competencies that require understanding across multiple aspects of a business, including but not limited to financial acumen, market perspective, and business system thinking. It is basically a portfolio of skills that allow leaders to support an organization in achieving its financial and strategic goals.
So why is business acumen becoming essential for IT and tech leaders? Below are some of the reasons why.
Business acumen can help IT leaders build partnerships across the business.
For any leadership role, it is apparent that strategic partnerships are essential. However, for IT leaders, such as CIOs, partnerships are critical to helping generate business value from key digital initiatives. Tech leaders should learn how to map the digital strategy to what the other C-suite executives are doing. By collaborating with them, adapt and improve the strategy to continuously meet business goals.
For example, tech leaders should have the mindset of how technology can improve the leader’s effort to provide demonstrable benefits, including new revenue opportunities, significant operational cost savings, or competitive advantages.
Business acumen can help leaders become business advisors, not just tech advisors
The role of an IT leader is generally internally focused, advising on what technology stakeholders and employees need to be more efficient, productive, and operate a support function. As technology plays a more critical role in the success of a business, tech leaders should take on an advisory role where they’re guiding the digital transformation of the entire company.
According to a report by Wipro Digital, nearly 50% of executives believe that there is a lack of knowledge as to what the term digital transformation actually means. Only tech leaders with business acumen have the capacity to execute a digital leadership strategy that will make the business more efficient and simultaneously create new, profitable digital channels.
Business acumen can help communicate tech leaders' initiatives' impact to the broader organization.
It’s no surprise that excellent communication is not often synonymous with IT leaders compared to CEOs. However, for them to drive transformational change across the organization, they need to step outside of their comfort zone and figure out how to communicate key IT initiatives to the rest of the company.
By communicating your vision, you can shift your employees’ perceptions of IT from simply a support function to a driver of digital innovation across the enterprise and ensuring that everyone understands how it will impact them individually. Tech leaders have the power to create a new digital-first culture and frame the narrative around how these initiatives can support the overall business goals, especially if equipped with the right skills.
Traditionally, CIOs have mainly focused on honing their technical skillset. However, in today’s ever-changing digital landscape, an effective CIO with business acumen is in high demand. This is why it is imperative for IT leaders of today to build their business acumen skills to better shape the companies of tomorrow.
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