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The Most Mismanaged IT Asset of All - the CIO

Feb 25, 2011
By

Matt Podowitz






Pretend for a moment that you are a CEO, and you learn that an asset that costs your company a cool quarter of a million dollars a year is chronically underutilized. Wouldn’t you want to do something about it?

Well, with the average CIO commanding $250,000 or more annually in salary and benefits, it would be reasonable to expect that the majority of their time is spent engaged in activities that create value for the enterprise. However, 90% of respondents in a recent CIO Executive Council survey indicated they spend most of their time improving IT operations and systems performance -- activities that have may help save a few bucks in the IT department but have only a limited impact (at best) on either the top or bottom lines of the company.

The reality is that many CIOs would rather spend their time focusing on more value-creating activities like meeting with stakeholders and creating quick wins for the business. Likewise, many business executives would like to direct their CIOs to stop mucking about with bits and bytes and instead focus their time on finding ways to add dollars and cents to the bottom line or help them grow the top line. Unfortunately, there are three key challenges that stand in the way of both business executives and CIOs getting what they want:


  1. CIOs often are too bogged-down in the day-to-day operations of IT to address strategic opportunities, no matter how badly they would like to do so.
  2. As many IT departments lack any significant leadership depth below the CIO level, many CIOs find themselves unable to delegate tasks that distract from their strategic focus.
  3. Even where CIOs have (or can create) capacity to address strategic issues, they lack a sufficient understanding of the company's business and market strategies and sufficient credibility with business stakeholders to actually do so.

The good news is that none of these challenges is insurmountable, and four steps can go a long way to increasing the proverbial (and actual) ROI on the CIO’s salary:

Get the CIO out of the weeds - Migrating to “management by exception” from “management of never-ending crisis” can put hours and hours back into a CIO’s work week. Whether through baby steps like standardizing and documenting IT operations procedures or more substantial measures like adopting and automating ITIL compliant processes, there will be a strong payback for making the effort both in terms of efficiency of operations as well as bandwidth for the CIO to focus on strategic issues and value creation.

CIO’s can help themselves by presenting a well-developed and costed proposal for such process improvements, and business executives can help their CIOs by considering such proposals in the same way they would proposals to improve any other crucial business process as opposed to an “IT project.”

Get the CIO out of middle management - The “Chief” in “Chief Information Officer” ultimately should be more than an honorific, and like any other “Chief” in the company the CIO should have a pool of capable leaders to rely upon. With such a pool of leadership in place, CIOs can delegate routine tasks without having to spend every minute worried about the data center imploding.

CIOs can help themselves accomplish this by cultivating any latent management talent they currently have in the department and for seeking such talent as an additional requirement for new hires. Business executives can help their CIOs by recognizing that management talent comes at a higher cost than raw technical talent and be prepared to see short-term increases in IT salaries to bring about long-term gains in the utilization of their CIOs.

Get the CIO out of the IT department -Literally. The perception of many CIOs as glorified techies often results from the fact the CIO never seems to leave the four walls of the IT department and get out into the business.

CIOs can help themselves build credibility and support by taking the time to get to know their peers in the business -- heads of operations departments, divisional executives and the rest of the C-suite -- and understanding their priorities and challenges.

Business executives can help themselves in this regard by encouraging both CIOs and those peers to spend time together and inviting the CIO into as many peer-level meetings as the CIO can cram into his or her schedule.

Measure the CIO on what matters - Many CIOs are evaluated on technical measures like “systems uptime” and “first call resolution rate” and, because of this, CIOs are forced into the weeds to make sure they still have a job come their next annual review.

CIOs can help themselves by adopting additional measures for themselves that are more closely linked to corporate priorities such as “net income contribution” and “customer retention.”

Business executives can help their CIOs by helping them link what the IT department does to those corporate priorities and accepting that performance against those technical measures may suffer short-term while IT reorganizes itself to free up the CIO to achieve more significant goals.

Yes, there may be some initial heartburn as IT leadership capacity is built and the day-to-day activities of the IT department transitioned, but chances are it will be well worth the effort. If nothing else, the business executives and CIO will learn more about each other during the process. This will lead to incremental improvements over time. Even if “big bang” improvements in the ROI of the CIO can’t be realized right away, over time, the pay off will be noticed.

Matt Podowitz is a strategic management consultant assisting entrepreneurial, middle market and Fortune 500 clients maximize returns on investment in operations and information technology and address business considerations in strategic transactions such as mergers, acquisitions and divestitures. He is a Certified Management Consultant and Certified in the Governance of Enterprise Information Technology, and specializes in leveraging business functions that historically have been viewed as cost centers to create tangible value for the business. Matt can be reached via the contact page on his personal business blog, ITValueChallenge.com.


Tags: CIO's job, IT strategy, IT/Business Alignment, IT asset management, CIO careers,
 

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