Are shareholders helping drive the CIO’s IT Strategy?

CEOs have traditionally been directly associated with shareholders. This has been and will continue to be a long-standing relationship where the CEO is held accountable by the shareholders to continue to grow the market share and value for the enterprises they lead. 

However, shareholder expectations can and should drive the IT strategy for the enterprise – or, in other words, send a clear message to the CIO.    

In this article in the HP Industry Edge Financial Services edition, Jim Scurlock discusses how the shareholders are not just focusing on the newest technology on the block or exercising control over the operational expenses. According to Scurlock,  they are focusing more on maximizing shareholder value.

He goes on to share the 4 steps that financial institutions can take to drive the conversation around IT to directly address what the shareholders are looking for. Upon a review of these steps in detail, cloud computing emerges as the most effective way to comprehensively address them – a classic instance of the shareholders indirectly impacting the IT strategy for the enterprise.

Cloud computing can best enable each of the 4 steps outlined by Scurlock via the following ways:

• Eliminate Capital Expenditures. A healthy mix of converged solutions deployed in the cloud allow for increased flexibility as and when financial institutions are required to comply with various federal mandates. Ring-fencing is just one of the cases in point. The cloud cushions the need for high-stakes capital expenditures while promoting the judicious allocation of the deployed assets on an as-needed basis.
• Reduce Operating Expenditures. The cloud environment is enabled by foundational techniques that reduce the overall operating expenditures. These include virtualization and elastic allocation of resources along with the employment of a unified set of systems management tools that can be used across physical and virtual resources to increase levels of automation.
• Release value from the Balance sheet. The modernization of legacy applications as part of the overall enterprise transformation program can release the value from the balance sheet as Scurlock points out. Such modernization is best done by architecting your enterprise for the cloud. Like any other journey, having the right transformation GPS would be a good start!
• Adopt a consumption-based model. Apportioning the appropriate charges to the consumers of the IT resources is extremely critical to manage the costs overall. A consumption-based model is one of the fundamental tenets of cloud computing.

As I think more about it, I see that there really is no other paradigm that can effectively enable all the steps that Scurlock outlines in this edition of the HP Industry Edge Financial Services.

Enterprises can employ such IT strategies to directly align with shareholder expectations – if the CIOs are paying close attention. 

How about you? What are your shareholders telling you? How is your IT strategy addressing your shareholders’ concerns?   .

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