Wednesday, October 13, 2010

The Dilution of the CIO and CTO Title—part 2

Having multiple CIOs in the same company undermines the position. Of course there are exceptions but for most companies this is my assertion.

Think about the common challenges CIOs lament. How to align IT with the business? How to be seen as part of the business strategy and less as the operator of the data center and network? How to be seen/respected as an equal on the executive team? These are issues of an organization and leadership that has not found its way to being part of the business; important to the business; even essential to the business but not part of the business. Why are CIOs not seen as strategic business partners while CFOs generally are?

There are multiple CFOs in large organizations too. Believe it or not, some CFO’s struggle with how to become a strategic business partner and not just an accounting specialist. But my observation is that successful CFOs are key strategic business partners while most CIOs are not. Most CIOs know that they must have the support of the CFO for any major IT initiative. I can’t recount a single time that a CFO felt it necessary to “win over” the CIO. It works having layers of CFOs in large corporations.

Layers of CFOs are acceptable and workable while the same structure of CIOs is not because the role of the CFO is well understood and respected. In many large corporations the reporting relationship of the CFOs parallels that of the business leader with the solid line relationship to the corporate CFO and a dotted line to the business leader. Further, the financial processes and rules in companies are set and must be followed. I don’t say those rules and processes are streamlined, fair, or sensible but everyone knows how the annual budget process works, who does the work of financing the operation, and who reports the results. No department ever says, “We don’t like our budget, we are going to ignore Finance and go get some money somewhere else.”

The role and authority of the CIO beyond running the IT department is not well understood and accepted and neither are the processes for interacting with the business. In a big company how many ways do projects get assigned resources? Subverting the IT department is allowed in most companies in one way or another and is great sport in some.

My point?

Having multiple CIOs undermines the goal of the CIO as a peer member of the strategic business team. Until the highest level IT executive has similar authority, respect and impact to that of the CFO throughout the corporation there should be only one CIO. CEOs who want a CIO to function at this level should make the organizational and title changes and drive the CIO to be that person. Or get someone else.

As for all the other CIOs: make them all the proper level of vice president but for now most companies should only have one CIO, if any.

Friday, September 17, 2010

The Dilution of the CIO and CTO Title--part 1

I have been reading some resumes and bios lately and I am stunned by how far down into some corporations the title CIO and, more and more, CTO goes.  I am not referring to large corporations that have large, independent companies such as GE and FedEx.  But relatively small companies with a pretty traditional corporate structure.

The CIO title long ago came to mean "head of IT" instead, in my opinion, of someone working at the CxO level driving innovation, revenue, and customer satisfaction.  But the title has become politicized so that companies have layers and layers of CIO's even when there is a direct reporting relationship to a single CIO.  I really have heard operating company presidents say, "I want my head of IT to have a CIO title too." with no regard to what the role in that operating company actually entails.  Part of this is of course is the operating company president's own desire to build his independent organization and part of it comes from the IT organization wanting their own independence and, of course, from the career aspirations of the operating company head of IT.

But the proliferation of the CTO title is a surprise to me.  It looks like the CTO title can be given to someone with technical decision rights over some domain no matter how small.  I recently saw a bio where the CTO of a really small company wrote that this was his third CTO position and that his last two CTO positions were at (and he was specific but I won't be) large technology companies (e.g. Sun, HP, IBM, or Oracle).  But I know the CTO's at these companies and he wasn't one of them.  So I read closer.  He was the CTO of a small part of a large piece of software.  Like the CTO for the Optimizer for the Oracle database or an extension to Java--not even the CTO for the entire product.  I found that there are layers of CTO positions now with a corporate CTO, a software CTO, product CTO's, and, in this case, product extension CTOs.  Sort of like proclaiming yourself the head chef at the French Laundry in charge of cold sandwiches.

I believe this illustrates huge problems for the IT profession and its relationship to the rest of the business.  Next time let's compare the role of the CFO to the CIO.

Monday, August 23, 2010

Main Themes

The 6-28 Information Week cover story by Chris Murphy titled "Return to Growth" raised questions I have been thinking seriously about for the last year. Is IT in most companies focused on the right things? Is IT really part of the growth agenda of these companies? Or it is, and the rest of the company, more comfortable with IT in a cost-controlling/make-business-processes-more-efficient (under the leadership of the business process owner) mode.

There are three main themes I want to explore in my writings. First is this one; that IT is not a strategic resource in most companies—although it should be—and that the role of CIO has mostly failed. I believe in most companies the CIO title should be withdrawn and replaced as the senior or executive vice president of IT. And if that causes a cascade of title demotions in IT all the better.
Second, managing IT costs is far more complex that most companies admit or know. I propose that almost no company gets a good return from their total IT expenditures (not just those assets in the data center or otherwise controlled by the ”IT Department.” Further, while most CFO’s suspect they aren’t getting a good return, they don’t have any data to evaluate.

Third, executive leadership in companies and the boards of directors of those companies need to recognize that the future of their company probably depends on exploiting IT to make it part of the growth agenda, part of the customer experience, and part of the business plan versus supporting the business plan. As such, executives and board members have got to start making executive and board-level decisions about IT.

I don't expect many of my positions to be popular but after more than forty years in IT I think there are a lot things that need to be fixed and need to be said.