Posts Tagged CxO
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
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
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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Is the CIO a “pinnacle” position?
By George M. Tomko
I think it is a healthy exercise, from time-to-time, to pressure test what you are doing, why you are doing it and would you keep doing it?
In conversations with CIOs in my consulting practice and when I network with them in forums and interest groups, I like to bring up the question of “knowing what you know now, would you still be in the profession that you chose years ago?”.
I am glad to see that, for most people to whom I ask the question, the answers I get back are that there are few or no regrets. Where there are issues, it appears that it is not so much the profession but more the environment that a particular executive works in.
The strategic CIO of today, in my opinion, is a well-educated and experienced practitioner of technology and business management. While having a rich background in technology management, they were able to build an experience portfolio that included stints in other functions i.e. engineering, finance, operations, sales, etc. They know about business process management, Lean and Six Sigma and have led transformation initiatives.
There is also a high degree of portability. Deploying ERP, SOA, BPR and other alphabet-soup solutions are generally skills and experiences that are transportable across many industries. Portability plays well — we have choices — maybe, more than others.
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