5 TOP MOTIVATORS

• Lack of IT credibility: 58%
• Operational ineffectiveness: 55%
• Overwhelming backlog and demand for IT services: 53%
• Inconsistent IT quality: 50%
• Mandate from the CIO: 45%

8 MOST COMMON BENEFITS ACHIEVED

• Closer alignment with the business: 82%
• Increased IT credibility with the business: 77%
• Improved customer service/loyalty: 64%
• IT quality improvements: 55%
• Increased IT staff productivity: 54%
• Expense reduction: 47%
• Better ability to make IT staffing and outsourcing decisions: 46%
• Transparency of costs and benefits of IT: 43%

(Based on selections of 103 respondents to CIO's survey.)

5 MOST COMMON BARRIERS

• Lack of resources and time
• Lack of business skills within the IT department
• IT staff resistance
• End-user resistance
• Lack of corporate backing / commitment

(Respondents were asked to rank their answers.)

5 MOST COMMON PERFORMANCE METRICS

• Internal customer satisfaction scores: 73%
• Performance reviews: 69%
• Industry benchmarks: 55%
• Performance against service-level agreements: 51%
• Formal department financial audits: 27%

(Based on selections of 103 respondents to CIO's survey.)

Out of Business?

Paul Strassmann warns that CIOs who overemphasize running IT like a business could be at greater risk of technology failure

"CIOs are missing the boat if they think running IT like a business will solve all their problems," says Paul Strassmann, a 42-year veteran of corporate and government IT and author of The Squandered Computer.

That's not to say that Strassmann doesn't believe in the benefits of running IT like a business. After all, he did just that at Xerox, where he ran the company's information services function as an operating division from 1971 till 1994. When he was appointed to an external task force by the US secretary of defence in 1991 to evaluate the Department of Defence's IT organization, Strassmann recommended recasting the Defence Information Services Agency as a business.

Issuing P&L statements, benchmarking unit costs and offering incentives for meeting performance goals, says Strassmann, can be critical steps in achieving IT efficiency. And that's what CIOs must do if they plan to compete with external services providers. However, he cautions, "you can be efficient - but what happens if you're doing all the wrong things efficiently? That can happen very easily."

An obsession with running IT like a business could distract CIOs from technical operations, to their peril, Strassmann says. CIOs must focus on technical operations and "keep their nose to the grindstone. All the [business discipline] in the world won't go far if the executive floor doesn't get their paycheques [because of an IT mistake] or if the e-mail system goes down." Success depends on maintaining a balance between the technical and the strategic.

In the end, it's likely CIOs will continue to struggle, whether or not they run IT like a business, Strassmann concludes. CIO turnover was just as bad last year as it was in 1995, according to his research, and he doesn't think businesslike IT will do much to increase CIO tenure. "The life expectancy of a CIO is still about 30 months. Everyone is struggling, without exception. The turmoil has not changed," says Strassmann. "Sometimes the changes you make in the IT organization will work. And sometimes they won't. There is no magic."