Posts Tagged ‘CIO’

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Is It Time To Say Goodbye To The CIO?

Wednesday, January 27th, 2010
Image Credit
Do You Really Know What Position You Ultimately Want To Get Promoted To?

Do You Really Know What Position You Ultimately Want To Get Promoted To?

So you want to be a CIO someday. Great. However, there may be a bit of a problem with your goal — the position of CIO may be going away. In fact, in about 10 years or so (is that when you are planning on seizing the reigns of IT control?) the position may look completely different from how it looks today. Hmm, a moving target. Maybe we should talk with some current CIOs to find out just what’s going on here…

Do CIOs Still Need To Have Business Skills?

Over at CIO Insight magazine they just got done doing their annual survey of CIOs. The results were, to say the least, eye-opening. The answer to the most asked question about the need for CIOs to have business skills is still a definite YES.

Current CIOs report that they are acting as much as business leaders as technology leaders. The days in which a CIO could lost himself / herself in the world of IT and be left alone appear to be long gone.

There is a bit of a double standard going one here however. CIOs are reporting that although they are being asked to implement programs that will result in fundamental business improvements, the position of CIO is still being pushed back to the second tier of senior management.

What Skills Do CIOs Need To Have Today?

With all of this talk of business skills, won’t CIOs need to have solid technical knowledge going forward? The answer appears to be yes, but. CIOs are saying that the job skills that they use most include finance, business process modeling, written and spoken communications, and just a bit of sales and marketing skills. I sure didn’t see servers, bandwidth, application security, or API knowledge anywhere on that list.

In fact, CIOs are reporting that the folks who are currently getting hired into IT positions have, can you believe it, even less business knowledge than people did just two years ago. This is quickly going to cause a problem: there are going to be very few qualified candidates to become CIO over the next few years. Can anyone say “opportunity”?

Skills That CIO-Wanna Bes Need To Be Working On

You might be asking yourself, so what skills do I need to be working on to take advantage of the need for business savvy CIO candidates that will be coming in the future?

The list is actually fairly short. To start with, you need to have very good public speaking skills and the leadership skills that will be required to implement what you talk about. A detailed understanding of the business that you are working for (like how they REALLY make their money) and a solid understanding of corporate finance.

There is, of course, more to this list. Once you’ve mastered the basics, then you’ll have to keep adding skills. Today’s CIOs report that you’ll also need to know how to master the strategic use of information, how to lead enterprise-wide changes, perform business model innovation, and improve business processes.

What All Of This Means For You

The report from today’s CIOs is not all good. It sure looks like CIOs are currently being treated as second-class citizens in the C-suite. However, as we all know, IT is not going away and it sure is not getting any less important. I’m thinking that CIOs are actually going to become more important over time.

CIOs are reporting that although business skills are becoming an even more important part of the set of tools that a CIO needs to have, fewer and fewer IT hires are coming with these skills. Clearly this is opening the door for those who dream of someday becoming the CIO.

Although it looks like you might have a shot at the top spot, it’s not going to be handed to you. You’re going to have to work at it. We’ve laid out the skills that you need to develop. Not go out there and get ready for the day that they call your name to become the firm’s next CIO…!

Do you think that the position of CIO will still exist in 10 years?

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What We’ll Be Talking About Next Time

Forget the whole alignment thing, is it possible that a CIO’s behavior is the root of the problem that the IT side of the house and the business side of the house have never been able to get along? Could it be that this is the secret as to why there has always been such a gap between these groups?

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Posted in career | 5 Comments »

Pay Up!: How CIOs Get Departments To Pay For Their Share Of IT

Wednesday, October 28th, 2009
Image Credit 1-800-Flowers Found A Way To Make Everyone Pay

1-800-Flowers Found A Way To Make Everyone Pay

Everybody wants their IT services for free. When you become the CIO, you’ve got to find an answer to the ugly question of just who’s going to pay you for all of those fancy IT services that your department can provide.

Sometimes there’s a single IT budget for the entire company that everyone draws from. But who gets what? Does everyone get the same amount? Do successful departments get more IT services than other departments? If they don’t, then will they start to set up their own IT department? Looks like another problem that you’re going to have to solve when you are the CIO…

Budget, Budget, Who’s Got The IT Budget?

In most of the civilized world clean drinking water is freely available all the time. Since it’s always available and we don’t really pay very much for it, we use it like there is no tomorrow.

Who cares about leaky faucets? Run the yard sprinklers, fill the pool, etc. – there’s really no cost to being wasteful with the stuff. This is all fine and good until something happens. When there is a sudden scarcity of water, all of a sudden we become much more aware of just how valuable it is.

I live in Florida and when a hurricane (or the threat of one) looms, bottled water is what everyone starts to stock up on. We can go without electricity for days, but not water.

The services provided by IT are the same way – if nobody has to pay for the helpdesk, or the onsite support, or the printer paper, then we all use them like they were free – which they basically are. As a CIO you’ve got a money problem. The internal customers that you serve are going to want you to do more and more for them while at the same time they are going to expect to not have to pay for any of it. Sounds like you’ve got a problem on your hands.

Flower Power

Tim Moran has taken a look at how the company 1-800-Flowers.com has dealt with this very problem. In the case of 1-800-Flowers, they had created a problem by buying other companies who came along with their own IT departments. They centralized the IT services; however, they were left with 14 separate brands and businesses.

Each of these separate businesses uses IT services; however, they didn’t have to pay for them – the IT funding came out of a central budget. This meant that everyone felt free to request as many laptops, Blackberrys, and cell phones as their little hearts desired because they were all, effectively, free to them. You can imagine the CIO headaches that this was causing – there was no financial IT alignment.

Pay To Play Saves The Day

There is a lot of talk about how CIOs need to find ways to innovate within their departments. Over at 1-800-Flowers CIO Steve Bozzo showed some innovation when he decided to solve this problem by starting to charge each of the company’s brands for the IT services that they were using.

It turns out that this isn’t really all that hard to do. There are plenty of good software programs out there that allow you to do this type of item-by-item billing using the Internet to provide online access to the bills. The real challenge is loading all of the data into the system in the first place.

There will be tricky decisions in many areas. Where servers are being used to support applications that are used by multiple departments you are going to have to find ways to divide up the expenses between all parties involved. Bozzo went about transitioning to this new way of doing business in a clever fashion.

Once the internal billing system was set up, he immediately started sending the business heads so-called “mock bills” that showed them what their IT bill would have been if the chargeback process was actually being used. This, of course, caused some shocked business executives to have some hasty discussions with IT.

The new IT billing system went “live” at the start of 1-800-Flowers new fiscal year. Having seen the mock bills and having had time to reduce their IT expenses somewhat allowed each of the business units to request the proper funding for their portion of the annual IT budget. No solution is perfect, but this approach allowed 1-800-Flowers to get a handle on their IT spending.

What This All Means For You

1-800-Flowers is now able to allocate every dollar in their IT budget to a business unit. This includes their entire infrastructure management from servers, security, voice services, to network services.

What this has allowed the company to do is to finally get true insight into just exactly where all of the money that they are spending on IT is going. Although it may not be in your CIO job description, when you become CIO providing this kind of transparency into your IT budget would be a good idea.

Once you are able to convince your firm’s senior management that you are indeed spending wisely the money that they’ve allocated to you, then they’ll be more likely to provide you with additional funding to work on those new projects that you really want to work on.

Do you think that there is any downside to providing so much insight into where the IT dollars are going?

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

What We’ll Be Talking About Next Time

It turns out that a company’s #1 salesperson is their CIO. They may not go on sales calls, have an assigned quota, or even be up-to-date on the company’s latest product pricing plans, but at the end of the day the CIO is the one who drives (or drives away) the most sales.

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Posted in finance | 2 Comments »

Who Should A CIO’s BFF Be: The CEO or The CFO?

Wednesday, October 7th, 2009
Worldcom's Bernard Ebbers Would Have Been A Bad Friend For CIOs To Have

Worldcom's Bernard Ebbers Would Have Been A Bad Friend For CIOs To Have

The times they are changing. Let’s take a moment and have a talk about one of a CIO’s key survival skills: the ability to successfully negotiate office politics. Specifically, if you could only have one best friend, who should it be: the CEO or the CFO?

Changes In The Workplace

The workplace that a CIO works in looks nothing like it did as little as 10 years ago. The changes that have happened have reshaped the boundaries of power. The CEO used to be the rock star who acted as a visionary leader. Think of Bill Gates, Tom Siebel, and Larry Ellison. However, the corporate scandals that rocked the business world at the start of the new millennium (i.e. Worldcom, Enron, etc.) has created the need for a change at the top.

Philip Tulimieri and Moshe Banai have taken a look at the that changes that have been taking place in the C-suites of major firms. They believe that a new focus on ensuring accountability by the senior executives, especially the CEO, plus the arrival of new regulations such as the Sarbanes-Oxley Act have changed who investors want to have running the company.

In the past, CFO were generally in the shadows of the CEOs – simply acting as mangers of the company’s money and trying to make sure that the company didn’t do anything too wild that they couldn’t pay for. This is all changing now.

The Arrival Of Co-Leaders Of A Company

In today’s corporate world, the balance of power is shifting. No longer is the CEO the only person running the show. Instead, the CFO is now playing a larger role – sorta a co-leader if you will.

The roles of a CEO and CFO are still different. A CEO has the responsibility of always being positive and working to move the company forward at all times. The CFO, on the other hand, is responsible for making sure that the company approaches every situation with caution and does its best to minimize the risk that it is being exposed to.

Tulimieri and Banai have made the interesting discovery that the rise of the CFO has meant that the role of the Chief Operating Officer (COO) has started to decline. The CIO is also responsible for this – that automation of much of a firm’s back office operations has reduced the need for the COO.

What’s A CIO To Do?

CIOs need to navigate these new corporate political waters very carefully. Yes, the CEO is still an important ally to have on your side; however, no longer is this enough – now you also have to be on good terms with the CFO.

One of the biggest challenges going forward will be keep both leaders happy. It’s important to realize that there will be disagreements between the CEO and CFO and that’s when the CIO needs to be most careful.

The challenge for any CIO is on which relationship should the most time should be spent. This will be different for every company. However, the CIO has the opportunity to show a great deal of value by facilitating communication between these two executives.

Final Thoughts

A CIO who can provide the information that a CEO needs in order to drive the company forward while at the same time providing the information that the CIO needs in order to measure the risk, will be seen as valuable.

The arrival of the CFO at the top of the company’s decision making structure means that being able to measure the financial value of every IT project will become even more critical. The world changes and CIOs need to make sure that they pick their corporate friends very carefully!

CIOs who can survive in the new world of company leadership and who can find a way to make friends with both the CEO and CFO will be better at finding ways to apply IT to enable the rest of the company to grow quicker, move faster, and do more.

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

What We’ll Be Talking About Next Time

When you think about someone trying to make off with your company’s private data, what comes to mind? Some wily Russian hacker who sneaks into your company’s network through the backdoor? Perhaps you need to update your thinking. A recent report from Cisco revealed that the real threat is coming from insiders. What’s a CIO to do?

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Posted in leadership | No Comments »

4 Innovation Strategies That Actually Work

Wednesday, September 16th, 2009
CIO's Looking For Innovation Need To Find The Four Techniques

CIO's Looking For Innovation Need To Find The Four Techniques

Innovation, innovation, innovation – everyone wants it, but nobody seems know know how to get and keep it. CIOs are under a lot of pressure to do more with less these days and being able to nurture an environment of innovation sure would help. The trick is HOW to do this…

The Problem With Innovation

One of the big problems that CIOs have is that when they start to think about innovation, they start by imagining a big blank sheet of paper and then they try to figure out how they can be innovative. This is exactly the wrong approach.

It turns out that how to innovate is NOT a blank sheet of paper – what techniques work is well known and now what techniques work together is also known. Two professors, Dr Frank Rothaermel and Dr. Edward Hess have taken a close look at what innovation techniques work, and they’ve discovered the four that work best.

Four Types Of Innovation

The first thing that CIOs need to realize is that there is no one-size-fits-all solution to finding an innovation strategy that works for a firm. Instead, there are four different approaches that seem to work the best. Just to make things more complicated, each of the four different approaches can be be combined. However, not all combinations result in more innovation. Let’s take a closer look.

The four different types of innovation that work best for firms are:

  • Recruiting & cultivating human capital,
  • Spending more on internal R&D
  • Strategic alliances,
  • Acquiring technology ventures

It is important to note that all four approaches can be pursued individually or all at once. However, going after more than one approach can allow a firm to achieve a higher level of innovation, but some strategies don’t mix well and can cause a firm to end up wasting both time and money. The key is to know which techniques work well with each other.

The Best Way To Foster Innovation

You knew that I was going to say this: the research shows that the best way to achieve continuous innovation over time is to hire and cultivate talented people. As always, this is something that is easy to say, but very hard to do.

The reason that taking the time and investing the money in your staff is the best way to foster long term innovation is because this approach allows an IT department  to to have more control over their IP and creates a steadier pipeline of innovation since no outside partners are being relied on.

To improve the odds of this approach working, the best IT departments build teams that are made up of both star and non-star employees. This allows the stars to look for new ideas while the non-stars turn ideas into successful products. Once again, you can see that although this is a powerful idea, it takes some serious CIO management skills to make it happen.

How To Combine Innovation Techniques

When a CIO decides that innovation must be boosted, all too often they will start throwing money at a variety of different techniques without fully understanding how they will (or won’t) work together.

For example, investing money in creating alliances is often done to create the same type of knowledge that companies can get from investing in their own people.

CIOs that invest in both approaches end up wasting money because of the overlap. The key question that a CIO needs to answer before perusing an alliance on top of developing star and non-star employees is to understand what key assets will be gained through the alliance that he/she can’t get from  their own employees.

Dr. Rothaermel and Dr. Hess have discovered that the two approaches that work the best together are alliances and acquisitions. CIOs that take the time to  form a joint venture with a vendor partner company before trying to buy it gives the CIO critical inside information on the target firm.

It turns out that both alliances and internal R&D spending also complement each other. Internally developed knowledge allows CIOs to better understand what market areas will become promising and this allows them to invest in the most promising alliances.

Final Thoughts

There is saying that goes “there is nothing new under the sun.” This holds true for CIOs that are seeking to boost the innovation in their departments.

It turns out that studies have shown that there are four innovation techniques that work the best. These four techniques can be combined and used together; however, CIO should only pursue multiple innovation strategies if they complement each other. CIOs who can grow innovation within their departments will have found a way to apply IT to enable the rest of the company to grow quicker, move faster, and do more.

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

What We’ll Be Talking About Next Time

With a little luck we can all agree that storage is a boring topic to talk about – I mean when you store something, it’s just sitting there not doing anything.CIOs prefer to talk about data in motion – reporting new sales or opening new markets. However, it turns out that storing data is the foundation that the company is built on and CIOs need to do this the right way…

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Posted in innovation | No Comments »

PayPal Outage Points To CIO Failure

Wednesday, September 2nd, 2009
Paypal's CIO Hasn't Been Doing His Job Correctly

Paypal's CIO Hasn't Been Doing His Job Correctly

The basic job of a CIO is to ensure that a company’s IT infrastructure operates smoothly and allows the company to conduct business. On Monday, August 3, 2009, PayPal’s CIO failed at this most basic of jobs.

A quick check of PayPal’s senior management structure reveals that they don’t have a CIO position (which in of itself is rather amazing), but Ryan D. Downs is their Senior Vice President, Worldwide Operations and so he’s their de facto CIO. What went wrong Ryan?

The Facts Behind The Failure

On Monday, August 3rd, Paypal experienced a world-wide outage that affected all of their customer facing systems. The effect of this outage is that millions of Paypal’s customers who rely on them to approve and complete financial transactions were unable to do so. This was a long outage – it started at 1:30 pm EST and lasted to until at least 6:30 pm EST.

Paypal is attributing this outage to “internal” issues.

Paypal is a huge business. In the most recent quarter, Paypal handled $16.7B in customer online commerce transactions. In the past the company has stated that they normally handle $2,000 in online transactions every second. Just in case you are doing the math, this means that this outage prevented at least $36M worth of business from happening.

What The CIO Did Wrong

I have no magic insights into what went wrong at Paypal, but it’s pretty easy to make a guess. Back in 2005, customers got shut out of Paypal for about 5 days when a software update went very, very wrong. I’m willing to bet that some sort of update process got away from them once again. This is just sloppy IT work.

This is exactly the type of basic “blocking & tackling” that CIOs have to get taken care of as part of building a solid IT foundation. Clearly this has not been done at Paypal.

The reason that this is such a scandal is that its happened at Paypal before. Once a problem is known, the CIO needs to step in and make sure that it will never happen again. We’re not just talking about establishing a fail-safe update process, but also making whatever changes are needed to the Paypal infrastructure in order to make sure that problems like this can’t ripple throughout the system.

Additionally, creating a process for rolling back changes is critical. If a bad change slips though the system and starts to go into production, you need to have the ability to get the system back to the way that it used to be.

Final Thoughts

Major outages like this reflect badly on all CIOs. There should be no reason that a outage like this should be allowed to happen especially since Paypal has had problems like this in the past. Paypal can’t claim that they didn’t have enough funding to prevent this problem – they are the fastest growing part of the eBay corporation.

In the end it all comes down to planning. Finding the time to gather the right people to run through “what if” scenarios and then following through with the recommendations that come out of these meetings is what every CIO needs to do. If Ryan takes the time to do this, then he will have found a way to apply IT to enable the rest of the company to grow quicker, move faster, and do more.

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

What We’ll Be Talking About Next Time

Hewlett-Packard is a huge IT products and services company that lives and dies by the actions of its sales teams. Making sure that the sales teams get paid should be a simple task right? Think again…

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Posted in crisis | No Comments »

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