Ex-interim CIO and consultant Tony Treccapelli, who concentrates on infrastructure optimization, IT planning and program management, tackles CIO's questions about their most pressing topics and offers advice on how to handle them.
What do you see as the biggest issue facing IT departments?
The business' perception of IT as a cost centre, especially in the SMB arena, is the biggest issue. IT should be viewed as an enabler and cost-reduction department. Otherwise, it is likely that budgets will become starved to a point that innovation is unlikely. This negative cycle then causes the IT department to become outdated, have less of an impact and lack executives with the ability to engage the business while implementing IT successfully. A CIO who can engage the business will be able to change these perceptions.
How do you see the role of CIO changing in terms of responsibilities and required skills?
CIOs need to know their customers, employees and shareholders as well as they understand the firewalls, servers and databases they manage. The CIO needs to understand the business goals and drivers that improve the bottom line first, and then assess and manage what IT tools make the requirements come to fruition.
In addition, as the trend toward sourcing IT services from vendors continues, vendor management, and in particular, vendor negotiation skills, continues to become more critical to the success of the CIO.
To what extent do you see the outsourcing trend in IT changing?
I see it increasing. Non-IT companies are not in the business of building and maintaining technology, so to ensure that the IT department has not burned the business with large under performing capital investments, they need to shift focus on listening to and understanding the voice of their customer.
Once the focus is shifted, IT departments will find it more efficient to outsource the execution tasks of delivering the IT. Having IT departments addressing building better requirements will naturally force them to utilize other resources. Since IT is becoming more commoditized, we can deduce that outsourcing will only increase.
How much of an annual IT budget is spent on "maintenance" (keeping the status quo operating) versus "development" (adding truly new business capability)?
Truly estimating the cost of maintaining IT is difficult because the technology is continually changing (a great example is the virtual server). But to get an idea one would need to ask the following questions:
If the business makes the same product, in the same location, and had a fixed customer base as of five years ago, there is a preventive maintenance metric that can be set at 20 per cent, but if you are a growing company with burgeoning concepts and products, the answer varies greatly.