October 20, 2003

The Year of the Incredibly Shrinking CIO

CIO.com has this disturbing analysis of how the CIO position is being diluted and dumbed down in corporate America. In terms of corporate reporting, CIO reports "The percentage of CIOs reporting to CFOs doubled this year from last year [22% vs. 11%], according to CIO's "The State of the CIO 2003" survey. Reporting to the CFO rather than the CEO or COO is almost always a sign of diminished clout." This also sets up an inherent shortfall in vision, resulting in conflicting and counterproductive goals, as a sidebar points out: "CFOs think in terms of quarterly earnings. IT is best managed as a long-term investment."

Some CIOs are being kicked out of the boardroom level. According to the aforementioned survey, 84 percent of CIOs said their IT function is currently being budgeted as a cost center that generates expenses rather than an investment center that generates new business capabilities. The article goes on to say many CIOs are just holding on for dear life, and being in survival mode means taking less chances and doing what they're told to do, and reporting to whom they're told to report.

One former CIO heard the same story over and over during interviews: "We're looking for a new CIO because IT projects never deliver on time and they cost more than we expect and they don't deliver what we want. All our systems need to be replaced. Oh, and we're reducing the amount of money we're allocating for IT."

But all is not lost. The article provides a number of very good suggestions for CIO's to improve their chances for redemption. Be proactive, run IT like any other business unit, put fiscal controls in place, etc. However, the "social engineering" and relationship-building aspects mentioned are just as important. Get out of your office, work the relationships both horizontally across departments and vertically with the CxOs to regain credibility, and then argue against the weakening of the CIO role from a position of strength and successes.

The linked article, "The Six Best Practices: What Leading CIOs Do", summed this up very succinctly:

  1. You must be on the executive team.
  2. You have to engage senior business managers in IT projects.
  3. You must also include users in the same projects.
  4. You need a high-level group to make IT decisions.
  5. You must communicate regularly with end users.
  6. You have to assign IT staff as liaisons to business units.
Just think of this as the CIO's version of Covey's "Seven Habits of Highly Effective People".

As I posted a few days ago, the successful CIOs will be the ones who effectively partner with management and aren't afraid to bring new ideas to the table. But even good ideas aren't enough anymore. In the current climate, firms want to see their IT solutions directly benefit the bottom line in one form or another. The good ideas ultimately have to turn into timely and cost-effective business drivers, without the bloat. As in golf, taking a good swing at the ball requires an equally good follow-through.

Topic(s):   Law Practice Management
Posted by Jeff Beard
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