Illuminating the black box: why CIOs should consider publishing an annual IT report

This article was co-authored by Ishan Prakash, a Manager at Metis Strategy.

The black box

For decades IT has been a black box—an obscurity of inner workings mostly just accepted by the firm. But that paradigm is changing and not least because IT itself has changed. Once relegated to a role of support, the function now can inform entire strategies as critically as it does key processes or core products. In many companies, it’s among the largest lines on the income statement. By Gartner’s estimations, overall IT spending will grow in 2024 by 8%, more than double that of 2022 and 2023—2.9% and 3.5%, respectively. No wonder so many CIOs are being directed to illuminate the black box.

Fortunately, in this directive they have a tremendous opportunity. They can flip the conversations about their function from ones of cost and skepticism to ones of value and comprehension. But how? One vehicle might be an annual report, one similar to those that have been published for years by public companies—10ks and 10qs and all those other filings by which stakeholders judge a company’s performance, posture, and potential.

Such a report has a legacy already, if only a short one. By 2015, the technical executives of at least one conglomerate, Intel, had figured they could enrich the firm’s perception of IT by showcasing how essentially that function contributes to business value. As Intel’s then-CIO, Kim Stevenson, explained in a 2015 interview with Peter High, a strategic advisor to technology executives, “Fundamentally, I believe that just like a company has to report to the SEC…that is how I view the IT report. Information technology is so fundamental for any company’s operating performance. Why would you not be as transparent with what you are doing as you are with your financial results?” Good question.

Producing an annual report affords you the chance not only to assess your department’s achievements honestly and extensively, but to craft them into a coherent and (God willing) compelling narrative. You’ll find this harder than it sounds. But if you don’t do it, your peers will craft your narrative for you. If you’d rather be the author of your own story, start here.

Principal design

Examine an IT report, by either Intel or some other company, and probably you’ll detect a few principles that guided its development, regardless of whether those principles were observed consciously by the authors.

First, the report should center on business priorities, and on the creation of business value, emphasizing those investments and initiatives that have contributed most directly. Second, it should articulate IT’s vision and its plan to achieve it while still creating measurable value in the present. And finally, it should elucidate the department’s mechanisms of governance and its processes that drive day-to-day operations. Remind yourself of these principles as you work.

In many of the most engaging IT reports, content is organized principally around the priorities of the broader firm. These might be drawn from corporate objectives, guiding principles, or even the propositions implied by a mission statement. Regardless of the source, what matters is that they’re shared by the enterprise.

Organizing your content in this way eases comprehension for the audience—typically board members and other senior leaders. It grounds them in something familiar and therefore something of interest, and it’s to this familiarity that you should connect everything you hope to convey about your technical achievements. Your team’s ISO 27001 certification means little if you omit how it protects the health and privacy of employees. Your new platform will excite no one if you don’t explain how it invigorates a tedious process, cuts emissions, or bolsters revenue.

One of the worst approaches you can take is to organize your content principally around IT projects or domains (though there is a place for that and we’ll get to it.) IT leaders, we’ve found, are especially afflicted by the curse of knowledge. They gravely overestimate what others know about their department’s activities and its configuration. So assume your audience knows nothing. And recognize their time is everything. Ensure they know where they are and why they should care from the very first sentence.

Further segmentation

With your business priorities figured, you might further segment your report by three conventional sections: digital performance, digital landscape, and digital outlook. Let’s start with Performance.

Digital Performance. Digital Performance should vivify how IT has generated value across business and technical functions alike. This is the place to showcase your projects and extol all of their virtues. Your projects (or their parent initiatives) might even be the best scheme by which to organize the rest of the section. Guide your reader through them as you would museum-goers through a series of exhibits, not only presenting them with the final product, but supplying them with the placards that carry their full import.

But beware: you are not authorized to bury your audience beneath a mudslide of jargon, buzzwords, and technicalities. Seek specificity and humanity in the stories you relay. Connect your projects to the people they help. Did you deploy AI to your customer service center? What pains did it alleviate? What time did it save? What have your people done with that time? And don’t just rattle off project metadata. Tell stories and thread them with quotes and anecdotes. And be precise.

Digital Landscape. To extend the museum analogy, if Digital Performance is a tour of the exhibits, then the Digital Landscape is an introduction of the artists behind the works and the materials used to produce them.

This section further eases your audience’s comprehension by orienting them to the IT organization, likely only a small part of which they’ll have engaged. They can better understand the value created by any one function or team if they can see how it fits within the broader apparatus. This section also puts into stark proportion the full scope of IT’s responsibilities—often a gargantuan obligation that IT leaders try in vain to communicate.

Here, too, it helps to connect characters and tools with the people they help and the outcomes they lead to. Numbers are among your mightiest instruments. Don’t say that your head of consumer operations oversees customer service. This enlightens no one. Say instead that her team of 65 fields over 50,000 requests every year across 12 countries. When describing your new platform, don’t stop at how it will “enable key processes.” Say that it will be integrated with more than 30 of the company’s platforms and that it will be wielded daily by over 400 employees to satisfy their objectives across Finance, HR, and Manufacturing.

Also consider sharing a bit about how your organization makes decisions, how it chooses work, and how much to invest and where. If your IT organization has a team dedicated to Finance, consider handing them the mic. They can speak generally about how the budget is allocated (you’d be surprised by the number of people this interests) and, if appropriate, even furnish evidence that revenues have outpaced IT’s budget—that is, they can show evidence of scale. Few metrics provide a fairer judgment of IT, given how inseparable its contributions are from the unnumbered activities of other departments. Still, even if you can’t yet show these trends, you’ll assuage many of your audience’s concerns and earn a great deal of their respect simply by showing a little transparency.

Digital Outlook

As its name suggests, the Digital Outlook should convey IT’s conception of the company’s digital future and of how that future will be brought to bear. What investments will fuel it? What projects will drive it? What technologies will define it? Here engage your audience by connecting the department’s plans to the technologies and advancements they’ve learned about at home from the news or their favorite podcast—AI or blockchain, or a new revenue model.

The Outlook also invites you to elaborate on how your teams and the company stay abreast of the latest technological advancements, and how it participates in the industry more broadly. Do you partner with VCs to scout emerging technologies? What’s that experience like? Tell your people about it. Tell them what you discovered and how you expect it will enhance their experience.

A beautiful thing about this section is that you needn’t know all the details about how a technology will be deployed or how it will contribute to your firm. You don’t even need to know whether it will work. Discuss your experiments freely, since that’s all they are: experiments. Just bring your audience along for the ride.

Finishing flourishes

By writing these sections, you’ll gather the content you need to write to others should you choose to include them.

One is a letter from the CIO, which should resemble those by CEOs in annual reports such as 10ks. It should open your report and preview the content, perhaps spotlighting the department’s most earthshaking achievements, if for no other reason than to ensure they’re relayed to those who wouldn’t read past the first page even if the report were written by Hemingway. It should also affect a voice warmer and more personal than the rest of the report, which, though clear and simple, should otherwise cede attention to its content.

The second is a glossary or an appendix. Here you can define or elaborate on terms and concepts that might otherwise disrupt your readers’ experience.

Forward looking

Aside from controlling your own narrative, there’s another reason to start publishing IT annual reports: With time, more of their content will become mandatory. Such has been the pattern of history.

Just this year the SEC announced that it would require companies to disclose through form 8-K information related to cybersecurity incidents, and to annually provide information regarding cybersecurity risk posture, strategy, and governance. (See? More people care about it than you thought.) Point is, digital reports will prove more than a fad. The black box will brighten to become a glass box. And for you, that’s an opportunity. Not only can such reports help you spread the good word about your department, they might even help you, more than anyone, learn how all those pieces you oversee add up to something more than the sum of their parts. After all, writing, they say, is refined thinking.

CIO, IT Leadership