Author: Yogi Schulz
Today, the role of the CIO is as demanding as it has ever been. The frequency of major systems initiatives, with their associated nail-biting, seems to be going down. That’s been replaced with a whole new focus on security, business continuity and disaster recovery; topics that used to be sure-fire cures for insomnia. Expectations about system availability are being ratcheted through the roof at a time of relentless cost pressure. The incompatibility of these goals appears to have escaped the notice of most senior executives. Debates about the appropriate use of outsourcing are echoing loudly in executive corridors.
In the midst of these shifting priorities, most CIO’s are leading their organization to achieve benefits from the use of information technology. The rest are engaged in determined and sometimes desperate acts of short-term self-preservation.
Given these dynamics in the business environment, here are some ideas for enhanced CIO success and reduced CIO insecurity.
Value of Information Technology
Information technology has enormous value to the business even if it’s difficult to describe and to quantify the value without challenge from other executives. For example, Canadian Tire’s successful web strategy rapidly evolved into a vital component of its overall retailing strategy. What’s that worth? Billions? I hope we’ve moved beyond the notion that successful projects are business successes and failed projects are IT failures.
The successful CIO pro-actively seeks out and communicates information technology success stories that are taken for granted until the CIO makes a point of spotlighting the story. For example, Mr. Mike Cuddy, the CIO of Toromont Industries in Ontario, video tapes executives explaining the value of specific IT initiatives. Mike plays one of these short clips at each IT strategy meeting with the executive team.
Information Technology Cost Reduction
An exclusive focus on IT cost reduction is a doomed strategy. Sometimes cost reduction is the strategy that the CFO, who should have this focus, imposes on the CIO. While every IT organization can reduce costs a little, no IT organization can continue that strategy for a few years in succession without undermining availability, service levels and functionality.
When IT eventually crumbles due to starvation, the CIO will be fired. A defense of “The CFO made me do it”, even when it’s true, rings hollow and carries no weight in this crisis.
The successful CIO is cost-conscious but continually shifts the conversation to educating the executive team about the benefits that IT is delivering for the organization. To drive the point some, it’s useful to ask the rhetorical question: “How long could we function if we lose the ERP system or the E-mail server?”
Information Technology Cost Allocation
In some organizations, IT costs are the largest single line item in the operating budget. Sometimes IT costs even exceed employee salaries. No wonder the CIO is perpetually on the hot seat to reduce costs and improve performance.
In these organizations, all costs that have anything to do with information technology are aggregated into the IT budget. Some CIO’s even promote this approach because it provides control over architecture and standards. We won’t mention that this approach also enhances the CIO’s sense of self-importance.
This dysfunctional situation, that will eventually cause the demise of the CIO, causes the executive team to focus on the apparently outrageous IT costs and forget all the benefits these costs are generating.
The successful CIO ensures that IT costs are borne as much as possible by the business departments that use the applications and receive the benefits. For example, each department forecasts how many seats it wants to pay for to use major applications like ERP and CRM. The cost of the seats includes charges such as a portion of the computing infrastructure and the DBMS license. This approach dramatically reduces the IT budget and forces individual departments to be more prudent in their consumption of IT services because the costs are a visible part of their budgets that they must defend.
It may be necessary for the CIO to say: “If no one wants to pay for the CRM system, then perhaps we should turn it off”. Such a statement, made once without sarcasm or intimidation, is often enough to cause the business to accept responsibility for the costs that are associated with the benefits they are enjoying.
Senior Executive Relationships
In some organizations, the CIO, even though he or she wears a business suit, is privately viewed as a propeller head. This label is sure to exclude the CIO from pivotal meetings where business strategy is discussed. Under these circumstances, the CIO will become the convenient scapegoat for the next problem that is presumed to be IT-related.
The successful CIO goes to great lengths to nurture a relationship with each member of the executive team. The CIO seeks to understand the business imperative that each executive is working to achieve. The CIO ensures that the IT department gives priority attention to topics that support those business imperatives. The CIO acts as a personal IT consultant to each senior executive.
The work of the successful CIO is dominated by leadership, communication and education. It’s not about technology. It’s certainly not about becoming a convenient scapegoat for the mismanagement or neglect of others.