Posts Tagged CIO
Reports of CIO ‘Death’ Premature
CIOs Must Have the Ear of the CEO
The Chief Information Officer is not a second-rate executive position as some would claim. Also, CIO, does not, as the saying goes, stand for “Career Is Over”. And the CIO position is certainly not “dead”, contrary to rumors to the contrary. As Mark Twain once said, “rumors of my death are premature”.
There is this notion that CIOs deserve a “seat at the table”. The “table” in this sense is the CEO staff, as a peer exectuive with the CFO, COO, and assorted VPs of Operations, Sales, etc. Much is written in blogs (included my own), magazine articles and discussed in forums about the justification for this belief. The main idea is that CIOs have to be more ’strategic’. Supposedly, the mechanism for becoming more strategic is most often termed “alignment”.
Let me so bold as to suggest that things like ‘contribution’ and ‘value’ go right along with ’strategic’. There are plenty of tactical issues with managing a business. Things are dynamic, a flow, requiring a dexterity of seamlessly migrating through issues of business performance: sales, product quality, customer satisfaction, supply chain, etc. Information Technology is clearly threaded through these and other areas of the business. However, the trick is to demystify and ‘dis-abstract’ this stuff so that you are not spending half of the monthly strategy meeting talking about who should be allowed to get a Blackberry or an iPhone.
So, the big picture has something to do with not being the “moron in the room”. True executive ”peers” suffer fools badly. The thought that there is somehow a special microscope for CIOs is nonsense — unless it takes one to see the value that the CIO is delivering. It is more about culture and being in the “club”. The one thing about clubs full of highly-ambitous people is that they are territorial and very picky about letting others inside.
Prior to being hired for a CIO position a few years ago, the HR executive told me that the company was thinking about slimming down the number of direct reports to the CEO. Thus, they were considering having me report to the CFO. My response: a non-starter. If they were trying to reduce the number of CEO reports, I had just the solution: have the CFO report to me.
After an awkward chuckle or two, the HR executive was back to his senses. I wasn’t asking for a seat at the table. I expected one. It is all about grabbing a chair and acting like you belong there.
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Bottom line
quit whining. If you do not have the business-savvy to earn the respect of fellow business executives, then you deserve to be seated in the gallery.
For more on this topic: Business Solutions: Death of the CIO?, by Nadia Cameron; The Death of the CIO–Again, by Brian Watson; Is the CIO a “pinnacle” position?, by George Tomko; and
What Do CEOs Want from CIOs?, by Maryfran Johnson.
Image: Arvind Balaraman / FreeDigitalPhotos.net
©2010 George M. Tomko All Rights Reserved
Tax on Offshore Call Centers-A Bad Idea
Posted by gmtomko in Rants, Uncategorized on June 7th, 2010
Apparently, there is no shortage of ways to generate revenue for cash-strapped government programs. Now we hear of New York Senator Charles Schumer’s idea for a 25 cent tax on calls to offshore call centers.
Sen. Chuck Schumer (D-N.Y.) introduced legislation that calls for taxing companies that transfer domestic customer service calls to foreign call centers. In a prepared statement, Schumer said the $0.25 excise tax is designed to provide incentive for companies to keep call center jobs on American soil.
Of course, this “incentive” is highly unlikely to have its desired effects for the following reasons (and probably many more):
- This will cost everybody 25 cents more for each customer service, help desk or other such call. Either the government will get the 25 cents, or a US-based service provider will be able to charge its US business customer higher rates (up to 25 cents per call) than the offshore provider.
- The cost of doing business will increase as companies will have quarterly disclosure filing requirements, related audits and other bureaucracy-related fees.
- The cost and size of government will increase to administer the program.
- The switching costs to move already-implemented business process solutions from offshore centers to onshore centers would likely exceed the “benefits” of bringing the solution back to the States.
Other than this government’s insatiable appetite for taxing its citizens, what other reason could there be for imposing such a tariff?
With midterm elections less than 5 months away, populist programs that tout job creation/protection will be the rage.
In a blog post at OutsourcingPortfolio.com, it was noted that:
the National Association of Call Centers (NACC) reported that US call center employment has generally grown – even through the current great recession…
So, are we trying to fix something that is not broken? No. We are breaking things further by creating an even uglier climate for businesses trying to succeed in America.
Further, from CIO.com:
According to Schumer’s plan, companies would have to certify annually with the Federal Trade Commission that they are in compliance with the offshore call center rules, or be subject to civil penalties. But the logistics involved in actively policing offshore call center traffic could prove much more costly to the federal government than to companies that outsource overseas.
Bottom line: another government money grab that increases the cost of doing business (thus killing job growth) and adds to the cost and size of government.
©2010 George M. Tomko All Rights Reserved
The Gift of Time
Night Blue Sky and Tree of Light
By George M. Tomko
The holiday season. The end of the year. A new year and new decade just up ahead. Most of us are on holiday this week and this is the greatest gift that the season brings us – the gift of time.
We may be skiing, on vacation, digging into another batch of cookies, reading, making resolutions or putting the stacks of papers into some kind of order. But, In general, we aren’t working; or, in wall-to-wall meetings; or planning a weekend cut-over to a new system.
The brief respite that we have been given will end with a vengeance on Monday, January 4, 2010. So we better be ready.
Clear memory, reboot, recharge – whatever you do, take this gift of time and backflush all of the crud and waxy buildup that has accumulated on your brain in what was a brutal 2009.
Quite a number of challenges await your return. 2010 will be a pivotal year. The rate of disruptive technology changes, and the new social contract that will emerge from economic recovery, will drastically test the “elasticity” of the organization to deal with things.
Whatever happens in 2010, it is going to take more guile and determination, intensity, creativity, resourcefulness and tenacity from leaders.
So, enjoy the time off. IT Leaders will be called upon to actually lead in 2010. Figuring things out will take a clear head and the ability to find some think time and plan the moves. We used to call it “blue sky” or thinking outside the box but, first and foremost it requires thinking.
Simple, maybe. But such a simple thing is often sabotaged by knee-jerks and bad reactions.
Bottom-line: Come out of this holiday season thinking right.
Image: Francesco Marino / FreeDigitalPhotos.net
©2009 George M. Tomko All Rights Reserved
Cloud Computing – a Capital Idea?
Cloud computing boosters use the selling point that establishing large amounts of storage or computing requires no “up-front capital investment”. Pleading before the gods of capital within corporations has been a bane for IT and business operations functions forever. All those appropriation request forms and cash flow analyses – not much fun when you want the servers installed and the software loaded.
What has always been interesting to me is that more thought, analysis, decision-making and accountability goes in to managing the capital investment portfolio than you often see in managing operating expenses. The irony here is that “op-ex” is very often many multiples larger than the “cap-ex” spend in any given fiscal period. If a $400 million company (in terms of revenue) has an operating profit of 20%, then the company managers spent $320 million with likely much less oversight than the $15 million that they might have spent on projects.
At the end of the day, there is no free lunch. Just like leasing became the way to ensure “technology refresh” every 3 years, let’s make sure that cloud computing and all something-as-a-service offerings don’t wind up costing your company more or that the standards of decision-making are usurped by being able to fly more stuff under the financial controls radar.
The saying “you can pay me now or you can pay me later” became a “tag” line in old oil filter commercials where the idea was that you might pay more now for a premium filter but you would be avoiding the cost of replacing the entire engine later. Of course, the assumption is that you would own the car long enough for this to pay off. This was in the era when the majority of people traded-in and bought new cars in 3 or 4 year cycles. Not long after, 3 year leases perpetuated the cycle.
The reality, then, was that most people wound up paying now and they got to do it over and over because later never came!
Another myth that is related is the 3,000 mile oil change. Again, another marketing bonanza because it got people to pay to replace their oil and filters twice as often as the auto manufacturers recommend in the owner manuals.
So back to op-ex and cap-ex and buying infrastructure/software/platforms as-a-service. If I take the op-ex view, it is almost always an incremental view as in year-over-year budgets and the dearth of zero-base reviews. If I take the cap-ex view, everything is an investment and is evaluated as cash-flows over a defined “economic life”. This takes rigor and commitment and the potential for more eyes to see and more ears to hear.
It is not a bad thing to have the option of paying for something as a service. However, it is a bad thing if the selling point is that you get to relieve yourself of the burden of evaluating and justifying the all-in costs of doing it one way or another.
Remember, you can pay now or pay later. Some times, it is nice to get to pay later.
What do you think. Please leave a comment.
©2009 George M. Tomko All Rights Reserved
Making Companies Smarter
Readers of my recent post “Does Business Intelligence require Intelligent Business?” can find a great post to continue the thought at CIOZone: “Ask the CIO–Do you want more BI & a smarter company?”.
In her post, Lauren E. Bielski writes:
“Nobody wants a less capable organization if there’s a way around the usual trade-offs posed by budgets, time constraints, and the competition. Hence, more talk than ever these days about fact-based decision making— which is pretty revered in management—and more efforts around data mining in an effort to learn more about operations, customers, and winning tactics.”
Good observations. But, are companies getting anywhere with their efforts? Quoting from a recent Aberdeen research report:
“the creation, management, and continual review of key performance indicators can prove to be a difficult process, particularly when large, complex data volumes are combined with rapidly changing business dynamics.”
Yes, it is not easy to do. I would also suggest that asking the CIO to make the company ’smarter’ may not be the best approach.
Net-net, companies have to do a number of things with their culture, vision, approach and, above all, not leave the job to the IT department.
Business leaders will not be able to get away with the abdication of attention and support that has doomed many an ERP implementation. No, they “own” this one. IT will lend its helping hand, but CIOs should push back and push back hard.
The CIO will have enough challenges executing the enabling initiatives.
What do you think? Please offer your comments.
©2009 George M. Tomko All Rights Reserved
Image: FreeDigitalPhotos.net
Does Business Intelligence Require Intelligent Business?
As I started to develop this blog post, it occurred to me that my working title, “Does Business Intelligence require Intelligent Business?” might have been previously used in some other publication. So, I Googled it.
I did find some very close variations, but not exactly in the form of the question that the title poses.
I was led to a white paper, “business intelligence is intelligent business”, by Gerry Davis, Regional Managing Partner, Asia-Pacific for Heidrick & Struggles. In the opening paragraph, the problem is summarized thusly:
“Collecting information about customers is relatively easy. Analyzing customer information for potential cross-sells, increased revenue streams, and improved service is more challenging. But getting the information to the front line in a timely manner and thus providing further competitive edge is proving increasingly difficult for many corporations.”
As we look at this statement, there are three main points: 1) collecting is “easy”; 2) analyzing is hard; and 3) disseminating it is very hard. Perhaps a bit oversimplified. But, in reality, most users will need this to be oversimplified to be able to overcome all their biases about IT, systems in general, any extra “work” that will automatically be assumed and fears about job security. This is said this way, not to be unkind, or even to be negative, but to make sure that the focus is on the right “problem”.
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CIOs as Brokers, not Controllers
As a long-time CIO and, now, consultant for CIOs, I am seeing that there is a role shift that is happening, ever so subtly, but it is going to be transformational for the role of CIO in most organizations. Perhaps it will not be manifested in a “big bang”, but all CIOs will be affected.
Some have referred to this as “CIO 2.0” as if to suggest that it is a planned and that there is some sort of documented manifesto that has popped out of some lab, university or think-tank. No, this is entirely circumstantial. It is also inevitable, unstoppable, irreversible, unavoidable, and, well, a good thing. A 2007 article by Deloitte and Touche, aimed mostly at government IT leaders, identified the changing roles and imperatives for public sector CIOs and was highly suggestive of the changes brewing for private sector CIOs.
The bottom line is this: a CIO is a broker of business solutions that involve cross functional process stewardship and a provider of a technology and infrastructure framework. Beyond this, there is an opportunity for the business-savvy CIO to contribute to joint enterprise strategy development with senior leadership. As described in an April 2008 blog post CIO 2.0: The Chief Impact Officer:
In other words, the ideal of CIOs becoming key players in the business arena is taking shape. Call it CIO 2.0 — the evolution of the IT czar into the role of “chief impact officer.” Call it the SCIO — the strategic CIO. But whatever you call it, the transformation is inevitable.
Those that are able to transcend the perception that they are zookeepers of the geeks and propeller-heads (as very talented technologists are unflatteringly labeled) will find themselves as thought leaders and key players in making things happen at the speed of business. Any attempt to be controlling, withholding, short-sighted or locked-in will simply generate powerful incentives for the organization to go it alone, underground, in any number of ways.
CIOs that fail to migrate from IT czar style CIO to chief impact officer style CIO will find themselves moved out, passed over or working for a more powerful executive (read CFO), rather than the CEO.
Using Consultants: Rolling the Dice?
Posted by gmtomko in Collabs, Uncategorized on May 19th, 2009
Nothing represents a game of ‘chance’ more than a pair of dice. Even with “loaded” dice, the outcomes are far from certain. Very often there is money on the line, significant money. So, I couldn’t think of a better subject –gambling on the roll of the dice– to compare with the use of consultants for high stakes decisions, intitiatives, etc.
Very often, consultants come to the same conclusions as the company’s own internal analysts. There is a perception that a prestigious consulting firm can 1) validate and therefore ‘certify’ the solution as the correct approach; 2) provide risk-averse executives with a scapegoat if things go bad; 3) increase commitment of the organization’s leaders to justify the large consulting bill.
But, at the end of the day, does any of this lower the possibility of rolling “snake eyes” with respect to the issue or opportunity that is being addressed? Does the lovely PowerPoint presentation leave you ready to “let it all ride” on the next roll?
As the truly great consultant would say, “it depends”. Perhaps, surprisingly, that consultant would actually be correct.
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Do Consultants Deliver Value? (Part 2 of a continuing series)
I started this journey by considering all of the talent that is now out ‘there’ due to the economy downturn and a workforce that is facing an unprecedented number of retirements. That is a lot of experience that could be for sale and, when looking at traditional consulting engagements from “brand name” firms, are customers buying potential, when they could be engaging highly-experienced and been-there, done that practitioners?
I put out a set of exploratory questions to see how people see this.
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Do Consultants Deliver Value?
I think that this is a top of mind question, now, because the economy has cast more people out ‘there’ from traditional employment scenarios and into creating their own businesses and personal brands. There is a lot of experience for sale and, relative to a large brand name consulting company that brings in newly-minted MBAs from elite schools, an interesting differential in value propositions that needs to be considered.
Ultimately, there is a fundamental question to be answered: “Do Consultants Deliver Value?”
I certainly can’t answer this question alone. And, such a broad question invariably leads to more questions:
- Do you use consultants?
- If so, why do you use consultants – because of the lack of internal expertise; because of the lack of internal ‘bandwidth’; because a strategy, project, etc. needs a boost of credibility?
- If not, why not?
- What do you look for in a consultant?
- How do you determine ROI for a consulting engagement?
- How do you hold consultants accountable after they are gone?
- Is it all about the size of the engagement or the perception that it is less risky to engage a name brand?
Please take a moment to post your answers and comments. What further questions would you ask to clarify and provide the data points to answer the larger question? My aim is to consolidate the responses into a formal post that not only represents my opinions on the matter but those of my colleagues and contemporaries. All contributions will be carefully cited.
Also, feel free to take a look at some of the following references to help frame your thinking:
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