Twilight of the CIO
October 04, 2007
"The CIO doesn't matter," writes vnunet's Silicon Valley Sleuth. "In [the new] reality, the average firm doesn't need a CIO – or at least doesn't need one as part of the management team. Such a role warrants an IT organization that is constantly raising the bar on its vendors and software. Companies like Google, Merrill Lynch or Wal Mart need a CIO. But for the majority of the economy, a CIO demonstrates a desperate attempt to appear innovative."
The Sleuth's comments come in the wake of a new survey of UK CIOs that reveals "a 15 per cent drop in the number who believe that their boards see IT as a key strategic function." Concerned that "the strategic influence of CIOs has eroded in recent years" nearly 60% of the surveyed execs "are planning to move jobs in the next two years."
In a post titled "The Ultimate Demise of the CIO" on the CIO Weblog, Scott Wilson writes:
I believe it's simply the ultimate destination of most technological endeavors - a complete assimilation into the fabric of the organization, as the technology becomes better adapted and easier to use than the pioneering iterations of it (which are what we have seen over the past forty years or so) ... After all, if it were so clear that technology is and is going to be complex, at least from a technical standpoint, who would be seriously worried (as many CIOs are) about users bypassing them and usurping their role of the IT department as solution provider? And if this is the case, then really, why SHOULD there be a CIO position in the organization?
InformationWeek's Bob Evans, as staunch an advocate for the IT function as you'll find, recently examined the web sites of a dozen large, respected companies and found that most made no mention of their CIO: "Go to the sites for CocaCola, eBay, Genetech, Goldman Sachs, Google, Walgreens, and Yahoo and just try to find a listing for that company's CIO. CocaCola listed 15 execs, but no CIO; Google showcased 45 execs, but no CIO; Goldman Sachs 10; eBay 11; Walgreens 16; Yahoo 20; and Genentech 7 -- and not a single CIO among them."
Are CIOs disappearing? Evans wondered. He later answered his own question:
Until recently, I believed that as long as ... IT continues to be increasingly indispensable in all types of industries[,] then the role of the CIO would endure as the steward of business technology strategy, purchasing, and deployment. Sure, the priorities for CIOs would change over time, and the centralized/decentralized pendulum would swing back and forth eternally, and there'd always be some low-level chatter about fighting for "a seat at the table," and many CIOs would chant the sacred mantra of "we need to align the technology with the business," and so forth. But all that aside, I was just dead certain that the use of technology in businesses absolutely mandated the coexistence of a CIO to strategically oversee all that stuff and use it to drive business value.
Boy, was I wrong.
Because we have hit a tipping point in the evolution of the CIO. Until recently, that evolutionary path was pretty much linear -- DP manager to MIS director to VP of IS to CIO -- with little or no question about what the ultimate expression or end-state of that position would be: the CIO. But the new evolutionary track branches off into many directions as traditional line-of-business managers become far more sophisticated about technology, as more IT processes and services are outsourced, as companies integrate IT into global logistics and operations -- and as some companies begin to doubt the ability of a centralized IT czar to drive the level of business- and customer-driven change required to compete in this 21st-century economy.
We've entered the long twilight of the CIO position, a sign that information technology is finally maturing. Technical expertise is becoming centralized in the supply industry, freeing workers and managers to concentrate on the manipulation and sharing of information. It will be a slow transition - CIOs will continue to play critical roles in many firms for many years - but we're at last catching up with the vision expressed back in 1990 by the legendary CIO Max Hopper, who predicted that IT would come to “be thought of more like electricity or the telephone network than as a decisive source of organizational advantage. In this world, a company trumpeting the appointment of a new chief information officer will seem as anachronistic as a company today naming a new vice president for water and gas. People like me will have succeeded when we have worked ourselves out of our jobs. Only then will our organizations be capable of embracing the true promise of information technology.”
I don't think the most accomplished CIOs will shed many tears over the fading of the CIO post. Careerwise, it's been as much an anchor as a sail. Titles come and go. It's talent that matters.
Having a CIO is primarily a matter of size and status. Certainly large franchises, banks, hospitals, financial institutions and any other large business that deals with a large number of customer accounts or confidential information needs a CIO.
Moderately successful software companies of about 100 employees (the kinds I have worked for) may only require a Director of IT to manage a few Managers in IT and their underlings. A commonly cited ratio is 1 IT person for 10 employees if Engineering has no input into how IT is run. Often, the CIO/Director answers to the CFO or CEO. So sometimes it is just a matter of how many "Chief" company officers the Board of Directors want, the rest being Vice Presidents. In an hierarchical org chart for 1000 employees, you sometimes need to make up new titles just to have more layers of rank between the CEO and the individual contributor. Companies with an engineering department should probably have a CTO. If you have a COO and a CMO and then the Board will probably just throw in a CIO as well if they can afford one. In a downturn, the CIO can get easily get laid off as being "obsolete" if nothing else. It is akin to how many expensive options you can afford on your new car purchase.
Is information technology is maturing? First, let's just ignore hardware like which PC brand you buy, Citrix, Sun SPARC systems and the like, save networking. For low-level solutions, it certainly already has. The obvious companies with hegemony are Microsoft, Cisco, Oracle and then the more technical and open source Linux/Apache/MySQL/Perl-or-Python (LAMP) for internal or external web sites. You might also consider Veritas and VMWare to have hegemony. Those are some of the primary training/testing certifications that you see on IT resumes. Geeky software engineers can supply themselves with open-source Eclipse, TextPad, etc. Those in techinical support might use anything from this help desk software list or other lists. If you were pinching pennies, you might tell your non-technical people to download OpenOffice rather than pay for MS Office.
What are now considered to be low-level problem have standard solutions. Those hegemonies provide an standard solution to the problem. In other words, those problems are "solved". New projects that provide new solutions have to be at a higher level and have little choice but to use the above-mentioned hegemonies as components to higher-level solutions. Whatever your company does might require specialized software that you might buy some kind of per-user or site license for or that is open-source. This application level of IT is not matured and never will because it is the users of such applications that have as much if not more input to application selection as IT does. You know what I mean: the big names might be SAP, Rational
I've have often thought of the CIO as simply a grandfatherly figure who unruffles feathers when problems like data loss, network outages or breaches in data confidentiality occur. This unruffling is more a matter of handholding and process re-vamping, maybe with some changes to the IT organization chart. I've have often thought of the CIO as, the older, more mature guy that the CFO or CEO would rather manage. If
- your IT department is properly adding/removing users from the email system, the NT Domain (or UNIX NIS or whatever)
- the other department-speific systems are working satisfactorily (departments like Engineering, Sales, Finance, Tech Support, HR)
- you are confident that the data backups are sufficient and secure
- the network is working OK
- you basically trust the IT personnel and find them to be serving your needs in a co-operative and subordinate fashion (especially your network security engineers who are, as a group, an arrogant group)
After reading page 5 of this article with its reference to Stephen Laster, CIO at Harvard Business School, and seeing that Lawrence M. Levine is associate dean and chief information officer for the Faculty of Arts and Sciences (FAS) at Harvard, I see that Harvard itself probably has too many CIOs. I went to an engineering school in New York and it just has one CIO at the level of the university's President's cabinet. In the 1990's, my alma mater won recognition as one of the most wired campuses in the USA. I think that Harvard's current president, Drew Gilpin Faust, should examine if the needs of the different Harvard schools are so very different. I expect that there is some cooperation between the CIO's, but having one CIO (whose title would probably be Vice President rather than some kind of Dean) for the whole university is clearly the way to go these days. Even if Faust makes such a change now, it might take years for the faculty and students to see the benefits but it would be a good investment in the future because the IT needs of the various schools are converging as, as you suggest, IT is maturing.
Hopper, who predicted that IT would come to be thought of more like electricity or the telephone network than as a decisive source of organizational advantage."
From a software perspective, I have my doubts that it will ever happen. The goal of IT is business process automation. But businesses processes are inherently different across businesses. For example, no two business does finance the same way. No two real estate company processes loans or property inspections the same way. Therefore, they each need their own specialized applications. However, there are some processes that are generic enough such that a commodity like IT solution will suffice. For example, asset tracking, tech support, and so on. But the applications that support those processes are hardly the "crown jewels" or the competitive edge of a company.
But the new evolutionary track branches off into many directions as traditional line-of-business managers become far more sophisticated about technology, as more IT processes and services are outsourced, as companies integrate IT into global logistics and operations
The traditional line-of-business manager can only make an IT decision up to a certain point. But that is still a long way from the decision making process of an experienced CIO. For example, an outsourcing company asks a traditional manager "We can integrate the data via webservices" . A non IT manager might say " I know what integration means, but what are web services?". While an experienced CIO might say "Give me other options besides web services. We have a large amount of data to move and that solution will not be fast enough. Our data is also in a specific format and we don't have the resources to do a conversion at this time. Plus any type of transport must be secure or encrypted."
"Go to the sites for CocaCola, eBay, Genetech, Goldman Sachs, Google, Walgreens, and Yahoo and just try to find a listing for that company's CIO. CocaCola listed 15 execs, but no CIO; Google showcased 45 execs, but no CIO; Goldman Sachs 10; eBay 11; Walgreens 16; Yahoo 20; and Genentech 7 -- and not a single CIO among them."
Ask those companies how many wasteful IT projects they have in their portfolios. How many good ideas were shot down or bad ones green lighted because of incompetence, competition, indecision, decision by committee, duplication etc. between departments. How much revenue was lost or budget wasted as a result of those inefficiencies. From Yahoo's Peanut Butter Manifesto:
We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos of our company.
• YME vs. Musicmatch
• Flickr vs. Photos
• YMG video vs. Search video
• Deli.cio.us vs. myweb
• Messenger and plug-ins vs. Sidebar and widgets
• Social media vs. 360 and Groups
• Front page vs. YMG
• Global strategy from BU'vs. Global strategy from Int'l
Would a capable CIO have agreed to all of that?
A friend of mine told me the reason of so many anacronic CIO was Microsoft, who was able to push the mantra and justify the role of such a senior person by having him something to do (with software so bloatted it can't work without someone massaging it full-time), and the cause for so little better solution implemented was that no one was here to defend them: they just ran, like water, power & gas, without anyone having to care for them. Saving the ad-companiam attack, the idea that IT cannot be self-liberating because managers need justification makes sense to me.
Posted by: Bertil at October 5, 2007 03:38 AM
DP manager to MIS director to VP of IS to CIO
Couldn't it just be that most IT managers (in the UK at least) never made it to board level? I got out of IT twelve years ago, and back then the CIO position was being talked about as something that the more go-ahead companies were starting to bring in - there was a lot more hype to it than substance, in other words. Twelve years, even with a dotcom boom in the middle of it, doesn't seem quite long enough for the CIO approach to come from nowhere, take over, become mainstream, reign unchallenged, start to fade and then die away completely. I'm reminded of a kids' conjuring trick ("and when I tap the wand again, it'll fly back across the room and reappear under the hat!")
Bertil - there's a horrible synergy between software companies' management of expectations and PC support professionals' self-interest. One of the saddest IT-related comments I ever heard was a company director telling me how they were going to ditch OS/2 (this was a year or so before IBM pulled the plug). Software they needed was starting to come out for Windows only, and some of the users didn't like the interface. And: It's very reliable, of course - it just runs and runs. But the users don't see that. Course, if they'd had Windows like the rest of us, they would have had the daily crash and the monthly helpdesk call, and they wouldn't have seen that either - it would have been just what computers are like...
In the last couple of years IBM have finally started selling mainframe & midrange servers on consolidation and reliability - as in, you can pull out twenty PC servers, put in one of these and it will just run and run. I fear it's too little, too late, though.
Once more unto the utility dream, dear friends, once more,
Or close the IT departments up with our business dead!
See what happens when utilities fail
Posted by: Gil Freund at October 5, 2007 10:11 AM
"It's talent that matters."
Nick, I an assure you that, here in London, the words talent and CIO VERY rarely occur in the same sentence.
"Such a role warrants an IT organization that is constantly raising the bar on its vendors and software."
This made me look at the role of CFO as a whole. Replace CIO through your thoughts with CFO and see how things differ? Are CFOs coming up with innovative accounting principles?
Granted I agree CIOs are disappearing; however, I don't necessarily think that's a welcome change.
Do CIOs really have to worry?
See my small cartoon.
Posted by: Oliver Widder at October 31, 2007 07:00 PM
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