A Letter to CXOs

A Letter to CXOs

You have the IT capability you deserve

Usually I address CIOs in this column, but this time I draw on my experiences as a CIO, CFO and executive vice president to address CXOs.

I believe that every organisation has the IT capability it deserves. If it's great, that means the CXOs have IT on their radar screen. If the capability is poor, blame everybody - starting with the CEO. I have heard many executives grumble about IT. The funny thing is that many of the problems are self-inflicted. Often there is a boom-and-bust approach to "fixing" IT, characterised by a period of overinvesting followed by a period of underinvesting. That bipolar approach to IT management delays the development of disciplined IT management practices and the steady delivery of IT capability and value.

See if this sounds familiar. Some cranky general managers (perhaps you're among them) start grumbling about the lack of IT delivery. Others jump on board and determine that the current CIO is genetically flawed and must be replaced. After a lengthy search and hefty retainer, the new CIO comes in - a talented, experienced IT executive with a mandate for change. Big expectations are backed up with big budgets, and a bunch of big development initiatives are launched. A few years later, expectations collide with the realities. Delivery is behind schedule, projects are over budget, and the cumulative support costs associated with these initiatives start mounting.

Again, the cranky general managers start grumbling, this time about the high cost of IT relative to value realised. Others jump on board, the IT budgets are cut back, the CIO leaves (to join another company facing the start of its boom cycle), and a "custodial" CIO is hired to oversee the bust cycle, characterised by cost cutting and strict controls. Again, after a few years, some cranky general managers start grumbling about poor IT delivery, and the cycle continues.

This cycle of underinvesting and overinvesting is classic, but not transparent to most because it requires a 10-year perspective - typically longer than average executive tenure. If you are starting to hear yourself and other CXOs grumbling in the hallways, you have an opportunity to redirect this energy to introduce a more disciplined approach to IT management. Disciplined IT management is characterised by a focused IT agenda, steady IT investments, value accountability and monitoring, short-cycle delivery and strong IT leadership - from within and beyond the IT department. You can help break the IT boom-and-bust cycle by doing the following.

STOP THE BLEEDING. Halt projects that are clearly in trouble, and don't approve new projects, additional spending or more staff. You won't have the information yet that you need to make changes, but you can make sure things don't get worse.

REDEFINE ACCOUNTABILITIES. Understand that everybody is on the hook for fixing the problem. The era of the IT valet is over - business executives can no longer drop off their IT wish, go do their "real job" and then expect the solution to be waiting at the kerb when they are ready for it. CIOs are not accountable for realising value because they don't own the three Ps: the business P&L, people and processes. General managers are responsible for the what of IT, while IT managers are responsible for the how.

Your tasks include figuring out where IT should be invested, outlining the investment justification, managing the change program, redesigning the business processes and upgrading the skills of the frontline performers. The CIO's responsibility includes defining and facilitating the IT governance process, delivering projects on time and on budget, provisioning basic services (such as help desk, operations and networking), and monitoring performance. CIOs must also define standards and processes around project management and methods, human resources, security, architecture and procurement.

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