Secrets of business-driven IT orgs

CIOs are transforming their tech organizations to deliver business value and new revenue streams by reshaping culture, processes, and team constructions — all while instilling a business-first mindset in all things IT.

At 75 years old, accounting and advisory firm Marcum LLP is far from a digital native. Yet Peter J. Scavuzzo, partner and chief information and digital officer, ensures it acts like one, with his technology team identifying and seizing on opportunities that drive company growth.

“We’re introducing technology that reinvents how we do business, and in a lot of cases, it has led us to generate revenue,” Scavuzzo explains.

As such, Scavuzzo and his team look for technologies that do way more than boost productivity or cut costs.

“It’s not about [implementing] technologies to do what we did but a little bit better or a little bit more automated,” he explains. Rather, it’s about transformation “with technology as a core component. We’re saying, ‘All this tech is available to us, and if we want to introduce some of this tech, what would it look like if we were starting from a clean slate? If we were just starting a company, and we have all this tech, what would we do?’ We paint that new picture and present it to the business, we get business buy-in, and then put the new processes in place.”

The work Scavuzzo’s IT department did to advance the firm’s service offerings speaks to this.

Companies often hire Marcum to handle all their accounting needs, and in the past Marcum used whatever software those clients had in place.

“That was the traditional way of working,” Scavuzzo says. “But we took a step back and asked, ‘What if we put in the software we think is ideal, that integrates with other systems, and then automate from beginning to end, and have reporting in real-time and predictive analytics?’”

Moreover, Scavuzzo saw an additional business benefit to such an approach, thanks to scale: Using anonymized data, Marcum could analyze and compare client performance and thereby provide better consulting advice to them.

“That allows us to help the businesses we service be more successful, more profitable. That’s how we add value rather than just performing a task for them,” he says.

Scavuzzo, who has been with Marcum for 17 years, has been reshaping the IT function and his own role for much of the decade so that his tech organization is well positioned to drive the business agenda.

He earned the confidence of his executive colleagues by delivering successes, which in turn helps him get their support for innovative ideas. He assigns technologists who have an aptitude for business and accounting to roles that enable them to identify and pursue transformation opportunities. He has divided his 170 workers into two groups, with 60% of them focused 100% on digital transformation and the remainder focused on operational IT.

Additionally, he launched Marcum Technology, which brings some of the tech products that his IT department creates for Marcum to the market. Scavuzzo is CEO of Marcum Technology, in addition to serving as Marcum’s CIDO.

These changes, he says, were an imperative.

“Our organization is depending on us to drive the business into the future,” he adds.

Heeding the call for business-driven IT

Scavuzzo is not alone in his quest to create a business-driven IT department.

The 2024 State of the CIO Report from Foundry, publisher of CIO.com, found that CIOs lean on multiple practices to create tech teams that are not merely supporting or aligning with the business but actually expanding it.

“The bottom line is that in today’s era of rapid technological innovation, IT teams are critical partners that teams all across the organization must rely on in order to meet and exceed their business goals,” says Mindy Lieberman, CIO of tech firm MongoDB. “A truly business-driven IT team shouldn’t just be aligned with business strategy, it should have a seat at the leadership table, have a hand in directing business strategy, and be brought in on any major transformational initiatives from the get-go.”

To get that hand in directing business strategy, Lieberman created a base with “the right people and the right roadmap, [as well as] the right processes and technology to ensure agility and transparency.” She views IT’s agenda and the business agenda as one and the same. She has modernized operations and internal application infrastructure to ensure her tech team can be responsive to business and customer-facing needs.

“Being a business-driven IT team means aligning the tools, processes, technology, and success metrics across an organization to ensure that we are aligned on the outcomes we are looking for and the strategy to deliver those outcomes,” Lieberman says. “The relationships and governance structure all need to support the alignment, and this planning needs to cover not only technology but also change management, end-user enablement, and management of ongoing operations and business-as-usual activities once the technology has been delivered.”

Such moves have yielded success for Lieberman and her IT department. She cites the work of the company’s IT Internal Tools team and specifically its creation of company tooling and generative AI-powered applications. She also points to the IT department’s work using MongoDB’s own Atlas Vector Search to build the Slack bot CoachGTM, which equips the company’s go-to-market teams with technical and product expertise to efficiently engage customers.

Principal Financial Group CIO Kathy Kay takes a similar approach to Lieberman’s. Like Lieberman, Kay does not distinguish between IT’s and the business’s agenda — something that has not historically happened nor is universally in place today.

“Historically business puts strategies together and the enabling functions come behind that. So IT’s work will align to that strategy and IT would show how it’s helping the business by supporting that strategy,” Kay says. “But now we’re integral to the strategy as it’s being created. There’s not a separation like there used to be. We’re having conversations together as we’re building strategy. We’re literally helping to evolve what needs to be done. We’re having those conversations all together. That’s how I think about being business-driven in IT: We’re integral to those conversations.”

Kay and the company’s four business-line CIOs fostered this tight collaboration in part because she and the other IT leaders could bring insights to the strategic planning sessions.

“We were saying, ‘Let us be part of the conversation because there is a lot that we’re seeing, there’s a lot of feedback from customers we’re getting, there’s a lot of technology capabilities we know about that can help serve [the company’s] customers,’” she says. “And we are able to say how [our ideas] will help the company drive forward, whether that is growth or improved margins.”

Case in point: IT implemented a customer data platform after seeing the need to create a more holistic customer experience.

Remaking IT culture

Other CIOs have pursued different tactics to build business-driven IT departments.

Scott Saccal, CIO of Cambrex, a contract drug manufacturing organization, has pushed his IT workers to adopt a business mindset, one that focuses on “the impact of their efforts on P&L, the customers, and ultimately the patients that benefit from the company’s work.”

To do that, Saccal has his staffers articulate the business value of their tasks during agile rituals, such as the daily scrum. “We’re constantly asking, ‘How does this benefit the business and the consumers?’ This helps focus efforts on what matters most,” he says.

Saccal reorganized the IT department to support and foster that mindset, implementing the scaled agile framework after joining the company in 2022 and structuring work around five core value streams: manufacturing, lab, commercial, quality, and enterprise systems. And he has adopted AI to help with coding so that IT workers spend less time on “the bits and bytes of coding” and more on communicating and collaborating on business challenges and opportunities.

Similarly, Ankur Anand, the London-based CIO for consultancy Nash Squared, says he has worked to shift his IT workers’ mindset and the IT departments’ culture from tech-focused to centered on business value.

To enable that shift, Anand embedded IT in the business so that staffers understand business processes and day-to-day operations, both IT and business unit employees have opportunities to share perspectives with one another, and IT is informed enough and empowered to find ways to add value to those areas and not just implement a new technology.

He adds: “It’s not about what we deliver or how we deliver; it’s about the incremental value we can create.”

CIOs take action

Mindset shifts and organizational changes are among the many strategies CIOs say they use to make their IT organizations more capable of driving the business, according to Foundry’s 2024 State of the CIO survey. In addition to cultivating automating processes, meeting more frequently with business peers, and developing an entrepreneurial mindset, some CIOs are also shifting to product-centric IT, and, like Nash Square’s Anand, embedding IT employees within business units.

Foundry / CIO.com

Although CIOs are taking action, many tech execs still say they’re not co-creating business value, according to Mikhail Papovsky, CEO and founder of Massaro Consulting.

Papovsky says a good number of CIOs remain too focused on the internal customer and don’t fully understand what their company’s customers really need and want.

He advises CIOs to join colleagues on sales calls to gain that insight. “If they do, it connects them to the business on an emotional level; it repositions how they see things,” he says. (The State of the CIO survey found only 16% of CIOs say they meet with customers.)

Papovksy likewise recommends CIOs delve deeper into their company’s operations to gain insights.

And he has seen how such moves can pay off. Papovsky cited one case, in which the CIO accompanied a sales executive to a meeting with a major client who wasn’t planning to buy a key company product. The CIO uncovered the reason for that decision, learning that the client’s data environment wasn’t mature enough to use the product. That insight created an opportunity for the CIO to find a way for his company to offer data-related services that could then lead to the sale.

CIOs have other work to do to create more business-driven IT shops, Papovsky says. They must have a strong governance model to ensure they’re prioritizing value-add initiatives and, to help with that task, they should have processes to estimate and track the value of IT initiatives, whether proposed by IT or a business unit.

Sathish Muthukrishnan, chief information, data, and digital officer at Ally Financial, has taken a multiprong approach that includes many of the strategies listed by the CIOs in the Foundry survey.

But Muthukrishnan’s showcase effort has been creating horizontal, rather than vertical, teams so that they’re better positioned to understand the whole business and the impact of their work on its success.

Instead of having an IT team dedicated to bank products, another to investment products, another to insurance customers, and others to the other various departments, Muthukrishnan created what he calls a horizontal structure. The top layer is product and experience, with a middle layer of engineering teams providing support, and then the architecture layer that includes architecture, security, networking, infrastructure, and data/analytics.

Muthukrishnan says this structure requires IT workers to understand not just a slice of the company’s business but how holistically it provides value to customers — which he considers key for any tech department looking to drive the business forward.

Furthermore, this structure has IT and business leaders working together during the investment cycle to prioritize initiatives based on expected ROIs for the company — another key component that enables tech to contribute directly to business growth.

“We look at what they will achieve for Ally as a whole, regardless of where the initiative comes from,” he adds. “So we have a single list, not a tech list, not a business list, not a business function list.”