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A Quality of Quantities

A Quality of Quantities

Since its inception, the role of chief information officer has survived, but many incumbents have not. Five years ago, I compared the attributes and experiences of 10 CIOs who survived with 10 who did not, studying them in matched pairs by industry sector. More recently, I have studied the current challenges facing IT departments in the United States, Europe and Asia and examined some that have gone through a transformation. This tells us even more about what the CIO of today and tomorrow needs to succeed.

Five years ago, the model CIO possessed four significant qualities. The first sounds like a cliché: the CIO needed to be a vision builder, someone who could work with executive teams to build a vision of how IT could make a competitive difference to the business.

That required the will to discover not only the company's strategic thrusts but how IT can add value. As one of the survivor CIOs put it: "The day you stop working on and maintaining support for the shared vision, you're gone." In contrast, many non survivors were "visionaries" and proud of it, but the business often disowned the vision when it was not shared. Said one non survivor CIO: "The vision was mine and mine alone." Survivor CIOs also were very good at relationship building with peers and superiors, and especially with the CEO. Often the CEO had to support or drive the vision in the end; more important, perhaps, the CEO hired and fired the CIO. Non survivors were not necessarily bad at building relationships; they just didn't do it or they concentrated on relationships within the IT function.

Quite often, CIO casualties were worshipped by their IT staff but barely known by senior executives. Survivors, on the other hand, would get to know their peers and superiors and build trust by satisfying their IT needs and engaging them in mutual learning exercises.

But those first two survival factors alone were insufficient. Sensitivity, or tactical judgement, was essential. CIOs couldn't be too far ahead of the rest of their organisations in their ambitions and actions in IT. Also, the CIOs had to detect when a change in organisational direction would have consequences for IT. This is about distinguishing clear messages from flavours of the month, about detecting sea changes from passing squalls.

Those failing the sensitivity test included the CIO who resisted taking his share of budget cuts during a recession and the CIO who resisted decentralising the IT function when the rest of the organisation was being broken into smaller units.

So far, the prescription for the model CIO of five years ago resembles that for any other senior executive. But CIOs always have had to obey one other imperative: they must be deliverers. The CIO who neither delivers what is promised nor complies with financial expectations is dead for two reasons.

First, IT projects and operations are very visible, especially failed ones. And second, many business managers are concerned about IT expenditures, and overruns magnify their worst fears.

The CIO as vision builder, relationship builder, tactician and deliverer may seem a tall order, but in the last five years another four requirements have been added, mirroring the continuing transformation in both IT and the business at large.

The New Order

First, the era of information superhighways and electronic commerce has changed the business perception of the importance of IT. Some executives see in it both business threats and opportunities, so IT strategy has to define what systems are needed to support business strategy and how IT might change it.

At forums for CIOs held in 1996 by CSC Index (now called Computer Sciences Corp), I asked CIOs if they were participating in business strategy discussions and events for the first time; about 30 per cent said they were. Increasingly, then, CIOs are being asked to be strategists. This is akin to vision building, but it is also something more. CIOs must understand new and emerging technologies and their availability, reliability, use and impact. They also explain the business implications, threats and opportunities that follow the introduction of new technology. This is where business and technological know-how intersect.

The last decade's explosion of technologies - and with it, vendors - has many profound implications for the CIO. But above all, CIOs must address the concept of architecture. Planning robust architectures in the midst of so much technological uncertainty is difficult, but the imperatives of interoperability, integrity and economics require some control of technologies.

CIOs know deep down that if they ignore architecture, their organisations risk falling behind their competitors. As new technologies and vendors continue to emerge, and end users and IT specialists embrace them, the central role of the IT function becomes planning infrastructure. In this respect, therefore, the CIO is an architect as well as a deliverer.

The most direct and dramatic recent change for many CIOs has been the transformation agenda within the IT department itself. The challenge has been to achieve radical performance improvements in cost structure, quality management and time-to-market. In other words, the CIO has become a reformer.

BP Exploration, for example, between 1990 and 1993 reduced its IS budget by 65 per cent and its IS head count by 80 per cent. In addition to what it achieved by combining data centres, BP aggressively outsourced and to some degree centralised its IS resources. And Motorola Inc introduced total quality management in pursuit of Six Sigma levels of performance in IT operations and development. In a sense, IT adopted tactics for achieving highest-quality standards in Motorola's chip production.

Several companies have been galvanised by the pace of business change and new product development to speed systems development. Where IT applications are on the critical path of product launch programs or business change projects, they can no longer be the roadblock. Many organisations today, for example, will not tolerate IT projects that last longer than nine months from the decision to proceed through the implementation phase. Often, packages are preferred to products developed in-house, although they do not guarantee speedy implementation. IT departments also favour rapid application development techniques and prototyping. And software products such as Lotus Notes are being adapted as application development shells. I even heard of a purchasing system that was developed in four weeks using browser software.

Finally, the most profound challenge for the CIO is to be an alliance manager.

As well as building relationships with peers and superiors, the CIO has two sets of alliances to manage, one outside the organisation and one inside. The trend towards outsourcing means that IT departments depend on vendors in the marketplace. Some vendors are small and in start-up mode; some are large and powerful. Different partnerships are required to solve different IT problems; some are contractual, some are risk sharing and some are exploratory. But whatever the context, the CIO must collaborate with vendors' top managers to create an understanding of and commitment to the alliance being constructed.

Meanwhile, inside the organisation, we see the rapid emergence of "power users". These end users are more proficient in using new technologies than are traditional IT professionals. They may bring in new applications and technologies when they join the company and can satisfy many of their own needs. They are not keen on architecture or standards, so they can leave a mess when they move on. And yet they bring at least as much good as bad to the organisation. Somehow the CIO and his or her team have to work with the power users to understand what is happening, agree on boundaries of responsibility and encourage a constructive but disciplined manner.

CIOs must remember and internalise the four eternal principles from the past, and they also must embrace the four new imperatives that have emerged in the latter part of the decade. The role of the CIO is nothing if not exacting and demanding. Perhaps the appropriate interpretation of CIO actually is "Challenge Isn't Optional".

Michael J Earl is a professor of information management at the London Business School. He can be reached at mearl@lbs.lon.ac.uk

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