CIO: What are your observations on the changes in CIO roles, particularly in New Zealand?
The true CIO is a strategic thinker focused on business issues and needs, and does not have a lot to do with day to day IT operational tasks, and sure as hell doesn’t dive down to deep technical levels. He is not focused on that. He would have a strong infrastructure team that will take care of the delivery of IT services to the business.
The true CIO will use IT as a change enabler. Sometimes, allowing business process reengineering to happen under the pretence of an IT project. I think it is quite smart if done correctly.
Where my concern comes from is I do believe these people that are operationally focused have been given CIO titles, but they are normally an IT manager who has operational experience more than anything.
So what happens when they don’t do a great job? They continue to maintain the status quo and make decisions on expenditure based on technology, not business requirements. The CEO will often put IT at this stage under the wings of the CFO so that he can control the costs, which he believes are spiralling out of control. The CEO will frequently do this because he doesn’t understand what the technologist is talking about nor has good visibility of what’s happening in his IT department. The CIO does not present IT from a business perspective showing KPIs [key performance indicators] that show the CEO that IT is supporting the business as it should.
All CFOs for some reason, that is completely unknown to me, believe they can run IT. Now I personally find that to be quite an insult to my chosen career. I don’t wake up tomorrow morning and believe I can run the accounting division of a company. Yet they [the CFOs] believe they can run an IT operation. The only reason they are put in that position is because the board or the CEO wants to see control or a reduction in the costs.
What then, constitutes a ‘real’ CIO?
If you are a technologist and a propeller head you can’t be an effective CIO, because 80 per cent of the job is engaging with the business. A true CIO can basically interpret a proposed technology to a present business
requirement, so that the business head understands what he is proposing. It is not IT for the sake of IT or a project for the sake of IT. It is a project designed to fix or better an existing business issue.
Effective CIOs contribute at the management table with innovative, cost-effective and customer-focused technology solutions that help solve current business issues or deliver new technologies that help create competitive advantage for the business. They are also more than capable fiscally to manage costs to a budget.
Some businesses do not believe IT is mission critical. If it is not mission critical, then you don’t need a CIO — you need an effective service delivery manager. By all means give him [the title of] general manager of IT or IT manager.
Companies that believe they can use IT to develop business processes and competitive advantage by the use of IT, or use IT as a business process reengineering lever or catalyst, need a CIO. The CIO will focus on business requirements and strategy. He will treat any other form of technology as a commodity item, whereas an operational focused person in IT tends to be passionate and opinionated about a particular product. A true CIO has the inherent skills and experience to run a business unit tomorrow morning.
Does this mean not all organisations need a CIO? Or there could be a period when a company may not need a CIO?
I don’t believe they do, especially in New Zealand. For example, the first question companies need to ask themselves is, do they need a strategic technology vision? If the answer is no, they either outsource their IT or they get an IT manager to run the current operations, who then reports to the CFO to make sure the costs are aligned with what the business is prepared to spend.
Imagine this: If I were to tell all the business users that we are going to change the current model of that department tomorrow, then deliver the new organisation chart showing the new business processes with the new paperwork — most people will freak out. People generally don’t handle change well.
If I were to turn up saying we are replacing a core operating system that is now not supportable and as part of the upgrade and replacement we have to go through some business process re-engineering to make sure the new system matches the business requirements, everybody is happier with the thought of an IT project.
That is why I make a reference [to IT] being used as a business enabler by itself, because everybody believes the business process reengineering you are about to undergo is being undertaken for the benefit of the business. That is how I believe you can make IT work very strategically for you — this is providing you have a CIO who is able to interpret the business requirements and make sure they dovetail well into the IT project.
I believe the true CIO, because he is 75 per cent strategically focused, should be able to see that there is nothing innovative or strategic happening in the business in the near future. He is going to be redundant pretty soon unless he is happy to sit down and manage the costs associated with running the business of IT. This is why CIO is sometimes facetiously ascribed the acronym of ‘career is over’.
If you are a CIO in New Zealand and your company is headquartered in Australia, would you be a real CIO?
It all depends on the reporting lines. If the CIO in New Zealand reports to the CIO in Australia, then the answer is ‘no’. If the CIO is part of the executive team of the business in New Zealand, and the CIO in Australia is a peer, then the answer is ‘yes’.
Quite frankly I see this happening a lot. People approach me and say we have got a CIO position that might interest you. My first question always is, ‘Who does it report to?’ They say it reports to the CFO. My answer is that it is not really a CIO position.
What is the ideal reporting line for the CIO?
It does not necessarily have to be to the CEO, but the role must be a member of the executive team. You are a direct report to the CEO because the CEO believes IT is important to the strategic direction. Or you are a direct report to the operations manager who reports to the CEO, but the CIO position is part of the company’s executive team. But if the CFO is the person you report to, then that to me sends a clear signal that they consider the IT department to be nothing other than a cost centre. So how can you possibly think that you are a CIO? In New Zealand we still haven’t matured to the fact that a CIO is very much a chosen profession.
This means some businesses are using it as a review reward, so they give them a new title instead of new money. It happens a lot so they give them the top IT title [in the] hope that will keep them. It is disappointing too, because that person has always been an IT manager so when that person messes up, then what does the industry see? The industry sees another CIO getting executed. And I believe that it is seriously tarring the reputation of the role of CIO and I believe it is because of the way we are pitching what the role of the CIO is.
All you need do is compare what I have said to what Wikipedia has to say:
“The chief information officer or CIO is a job title for the head of the information technology group within an organisation. The CIO typically reports to the chief executive officer. In military organisations, they report to the commanding officer or commanding general of the organisation.
“The prominence of this position has risen greatly as information technology has become a more important part of business. The CIO may be a member of the executive board of the organisation, but this is dependent on the type of organisation.”
What then, is the next step for the CIO?
In America, in Europe and the UK a lot of CIOs move to the head of a business unit of the same business. They move horizontally and it is not uncommon for the CIO to be a CEO. But in New Zealand it is very rare to see, when in fact a true CIO is more than capable of doing that. You know it is pretty brave thing to say that you know a lot of the business, there is a strong misconception from your peers as to how much you truly know about the business. This general perception, I believe, has been jaded and seriously damaged by IT managers holding the title of CIO and then continue to act like operational IT managers.
The interesting thing is most CIOs who step out of the business end up consulting to the same type of people as their peers on short-term assignments. Because people see the need for an IT component that is strategic to their business requirement, they are happy to pay for the CIO consultant to come and help them do the job. But when the job is done they also want to say ‘tata’ and then the IT manager, who is operationally focused, will continue to run the operational components of IT.
Generally speaking, the IT enablement is fairly constant. What you need to understand are the business drivers. So when I go to a business head, the first thing I am looking for is, how does the business make money? How do they continue to develop and grow there business and maintain a competitive advantage? Once you understand those components, you can make IT solutions that fit these requirements.
I am beginning to think maybe the CIO is an engaged role — when you finish with your engagement, he or she moves on. It could be within the company or to a new project. I have seriously thought of setting up a business of renting a CIO to the business when they have got a project on the table. ‘Rent a CIO’. That is a good idea. A ‘CIO in a can’. There’s nothing to say it couldn’t be a successful business.
What I would like to see in the New Zealand market, is for people to take the CIO role seriously for what it is supposed to be.
I believe a lot of people are given titles well beyond their capability. That is certainly not going to win me a lot of friends, but somebody has got to say it. We continually see disestablished CIO roles. It just tells me that what I am saying is true. It is very controversial, but at least it should be acknowledged and people should at least take notice.
Fairfax Business Media
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