The Myth of the "Mid-Tier" CIO

By Dennis Drogseth

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While mid-tier CIOs face dramatically more resource constraints than their large-enterprise counterparts, the issues and demands they face in delivering and managing IT services are surprisingly similar. This has shown to be true based on years of quantitative data analysis, focal interviews, IT consulting engagements and just common sense. If anything, global pressures on smaller and mid-tier businesses are more acute than ever.

Without the inherent protection of regionalism and the all but unfettered competition of a “flat planet,” small and mid-tier organizations have to compete in every respect on a par equal to their larger brethren. This may range from appealing to consumers and customers, to supporting supply chains, to interacting in other B2B and B2C relationships across the Internet, or in more traditional business models.

This means that CIOs and their organizations must confront a landscape that’s radically unforgiving, on the one hand, yet more than ever open to innovation and creative approaches, on the other. As I’ve written in the past, IT services are becoming an increasingly important part of the formula for enabling and sometimes even defining that “creativity.”

So, let’s examine a few myths about mid-tier and some smaller business IT organizations. These myths exist in the minds of many management software vendors trying to sell solutions. And they are also myths reinforced by popular industry stereotypes. I suspect they get bolstered as well by surveys that reach out to random technical professionals―many of whom are still isolated from the changes that are evolving at the heart of IT organizational planning and innovation, but which, in many cases, have not yet been effectively assimilated across the full IT organization.

Myth 1 - Mid-tier and smaller businesses are primarily defined by employee size or gross revenue. While this seems like an obvious truth, seeking to manage your IT organization based on caricatures associated with company size can become a short road to perdition. My experience is that a far more telling factor is business model and level of IT sophistication. While larger enterprises may have more in common with each other based on their collective requirements for scalability, their broader resources, and their politically entrenched fiefdoms, mid-tier and smaller businesses are all over the board in how they approach IT.

If you are a mid-tier CIO, nothing could be more important than being clear about the readiness of your organization to work collectively to tackle service management as a whole. If you’re already in a service management mindset you’re among the lucky elite. You’ve got the potential to outshine larger enterprises in the speed with which you can enact change and transform your organization into a 21st Century business-enabling organism. If, on the other hand, you are still working reactively, with siloed professionals in poorly defined roles, you will need to go through some basic training before you can expect any technology adoption to work wonders for you. This leads to…

Myth 2 - ITIL is primarily for large enterprises. I will admit all my research indicates that interest in ITIL scales upwards in linear fashion with company size. This is true in 2009 and was probably even truer in past years. However, this is also a little nonsensical. Attention to process is just as important for mid-tier businesses and organizations as it is to larger enterprises, albeit across a different set of environmental conditions.

With mature process awareness, a little intelligent investment can go a long way, and do so a lot faster and more pervasively than across large enterprise fiefdoms. And yes, the IT Infrastructure Library (ITIL) can seem off-putting, convoluted and even Byzantine in their dissection of process at times; especially if you’re a small business. But ITIL itself and its more astute practitioners recognize that it’s a departure point not a religious text, or a crash course in which word-for-word recitation counts more than pragmatic application. The goal should never be to be "ITIL compliant" no matter how large or small your organization. The goal should be to leverage ITIL to transform your organization in pragmatic, tangible ways.

Myth 3 - Like ITIL, CMDBs are only for large enterprises. This is radically not true. While most market entries into the CMDB/CMS space have been targeted at high-end enterprises with brigades to throw at customization, this is gradually becoming less and less the case. And, in spite of this, Q2 EMA research into CMDB/CMS deployments showed that 33% of respondents were supporting organizations with 2,500 or fewer employees. This group got $500,000 more value out of the CMDB in the last 12 months (in operational efficiency, MTTR reductions, asset management, redundant hardware and software license management, etc.).

The percentage for companies with more than 20,000 employees getting $500,000 more in value was only 32%. I should also point out that, in all fairness, EMA research into business service management (BSM) in the same time period consistently showed less of an interest in investing in the CMDB and other enabling components among smaller and mid-tier businesses than among larger enterprises.

I view this as a mistake among mid-tier IT executive leadership. Perhaps you think cost-effective solutions in this space aren’t there for you yet and that’s a fair concern. But a few innovations are already available with more on the horizon. And that brings me to the fourth and last myth for today’s column.

Myth 4 - The industry has fundamentally failed to address mid-tier and small business IT management requirements, except by way of outsourcing. This myth was fairly true five years ago, but there are a whole host of solutions that are breaking the mold. Many of these solutions are taking advantage of new software architectures available through Web-enabled services and Web 2.0 constructs, along with other foundational advantages. The vendors are too numerous to name so I won’t even try. But I will provide a short list of types.

Here are a few useful categories:

1. SNMP network management suites at initial prices often starting in the $5K-$10K range

2. Integrated performance and change analytics targeted at mid-tier buyers with starting points at $40-$50K

3. Service desk vendors with effective integrated ITSM suites beginning in the $40K+ price range.

4. Integrated operational suites with a broad range of functionality and modular purchase options starting at $40K-$50K.

5. SaaS for everything ranging from entire suites, to service desks and CMDBs, to niche solutions, including packaging options for some of the above alternatives.

6. Open source (recommended only if it’s supported beyond sheer osmosis and the often fatal techno-fascination with tinkering).

7. Niche innovation, e.g., a CDMB solution is available that’s downloadable with initial cost point at $5K.

Here I should put in the caveat that focusing on initial software costs versus effectiveness, administrative requirements and deployment requirements can often point you in the wrong direction.

I’d like to wrap up with perhaps the single most important thing I’ve observed in nearly a decade of research and consulting: in fundamental priorities for function, integration, variables impacting strategic successes, mid-tier and larger enterprises/organizations, and even smaller businesses above, say, the 500 employee level, have more far more in common than you might think. They differ more by maturity level than size.

And they have different vices. Larger enterprises suffer from their own bad habits (excessive deliberation, a fondness for grand world-changing solutions to be delivered in a single, mammoth initiative, fragmented fiefdoms, and shifting executive priorities arising often from shifting executives).

Mid-tier vices involve taking unfortunate short cuts, ignoring process and enabling technologies, and sometimes a sheer panic that drives both executives and professionals towards siloed, recidivist, tool-set tree hugging. It’s not surprising then the best advice any consultant could give you in the mid-tier is similar to advice given to large enterprises, albeit with a different array of technology choices and different warnings targeted at a different set of bad habits.

Dennis Drogseth is VP of Boulder, Colo.-based Enterprise Management Associates, an industry research firm focused on IT management. Dennis can reached at ddrogseth@enterprisemanagement.com.