He never saw it coming. Jim felt as thought his knees had just been knocked from under him. Five minutes ago the CEO had told him to pack his personal belongings and leave the building. He had been sacked! The stated reasons were rather vague – something to do with communications, lack of alignment, that sort of thing.
As he trudged back to his office, the “former” CIO wondered what went wrong. Luckily, it was after working hours so few staff caught a glimpse of his crestfallen face. How could he be in this position? He was technically competent, particularly adept at judging the applicability of emerging technologies to the business, and he knew the business very well. Actually, he felt he knew it better than some business leaders understood their own areas.
He also knew that sometimes he had difficulty communicating with senior management, particularly when he had a technology-based project to propose. Often, in fact, he was dismissed from the boardroom with no authorization to proceed and a list of seemingly inane questions which needed to be answered. Usually, Jim was at a loss for words when asked to justify the business merits of IT expenditures, although he could speak very well to the technical advantages.
So what advice might Jim find useful as he struggles to land on his feet in another CIO position? First, let’s take two steps back to examine the CIO role, then move on to determine what it would take for him to be a success.
Functionally, the CIO’s role is two-fold, as shown in the accompanying diagram.
Co-Leading Business Change
Using information technology as an enabler and in partnership with business leaders, the CIO should lead changes to business approaches and processes in a way that provides value to the organization. Typically, such value is realized through:
• Displacing costs – either immediate cost savings or future cost avoidance during organizational growth
• Improved productivity – for both transaction-processing personnel and knowledge workers
• Improved asset utilization – inventories, cash, equipment and plants
• Improved “outreach” to customers and suppliers – impacting marketing, distribution and supply-chain processes
• Competitive advantage – through business-process and technology innovations
• Competitive “catch up” – not the most enviable position, as an organization tries to recapture lost market share
• Strategic advantage – innovative approaches to delivering mainline products and services (or potential spin-off products and services launching new businesses)
Many CIOs have been frustrated in their attempts at fulfilling this business component of their role. Because of their unique position of being able to see beyond individual silos to a helicopter view of the organization, they have seen value in proposed process and technology innovations. Yet they have been unable to sell the concept and authorize investments.
Challenges For The CIO
Why does a CIO have difficulty in launching and co-leading business change? There are many reasons. For example, the CIO may lack credibility in the eyes of the business (they’re often viewed as techies at heart. And as such, every ‘change’ will result in some systems solution – when your only tool is a hammer, every problem looks like a nail).
Alternatively, the problem could lie in the CIO’s tendency to focus on high-leverage investment opportunities, rather than catering to vocal business units and their wish lists. In other words, there is sometimes difficulty in getting business managers to look beyond individual silos to manage IT demand based on enterprise value.
The CIO may also have difficulty judging the applicability of emerging technologies to the business – gauging when a new technology has crossed the chasm between the early adopters and the mainstream consumers. There may also be difficulty in judging the risk versus the potential business benefits of a technological investment, particularly if emerging technologies are involved.
And last, but not least, another challenge for the CIO is managing organizational change – in particular the ‘people dimension’ of changing roles, procedures, and organizational alignments.
How the CIO can overcome these obstacles and allow the value proposition offered through information technology investments is one of our key focus areas.
Managing Information Technology
The second component of the CIO’s role, managing information technology, if performed properly, keeps the organization in the ‘sweet spot’ of IT products, allowing the CIO to:
• Deliver on promised applications and services
• Offer stable day-to-day services
• Provide universality of information access, both internally and externally to the organization
• Provide currency in infrastructure ability that enhances collaboration among people throughout the organization, thus minimizing time and distance limitations in doing business
• Protect the organization from malicious or accidental intrusions into the environment
Yet the CIO faces several challenges in fulfilling this role also. Some of these are: managing the expectations of the client community – focusing on what the business really needs, not necessarily what it wants; keeping the techies disciplined – ensuring the service-delivery processes, procedures and controls are followed (particularly in change and problem/incident management); ensuring techie groups are proposing sound infrastructure investments as opposed to pursuing the latest ‘technological adventure’; managing IT architects who are out to design the perfect world, as opposed to delivering integrated solutions to address business opportunities and problems; keeping abreast of emerging technologies and judging when they have reached the right level of maturity, reliability and price/performance to benefit the organization; harnessing the user groups performing rogue development and technological implementations (usually concealing the expenditures as something else); determining whether or not to outsource some aspects of technology operations and support; and judging when the business benefits may outweigh the risk of being an early adopter of an emerging technology.
In conclusion, if the CIO roles are performed properly (co-leading business change and managing information technology) an organization can benefit, but there are several roadblocks in the way. How then can the CIO overcome these obstacles and be successful?
The answer can be found in the CIO Compass Model, wherein the CIO manages the following four quadrants: North, the domain of senior management and organizational strategy; East, the domain of the internal clients; South, the IT Department, where the work gets done; and West, the domain of the organization’s external customers and suppliers.
In the second part of this article, the CIO Compass Model will be explained in detail.
Graham J. McFarlane, P.Eng., ISP, FCMC, is a Calgary-based Director of Western Management Consultants, specializing in the management of information technology. He has worked with CIOs as a management consultant since 1978 and served for five months as interim CIO in a dynamic corporate environment. He can be reached at mcfarlane@wmc.ca.