Which CIO the one at your company / your customers is ?

Indeed, that's not a great deal to say that people with a title starting with a glorious capital "C" shall know about money and companies strategy...

... However, during my 9 years of IT project management practice, I've often noticed that sometimes CIO and far more often the team they manage had some troubles to include those 2 bearing points into their equation, thus expected ROI is not achieved...

It's worth reminding some facts about IT market, in order to figure the how much money we're talking about:

Source: Gartner (April 2014)

For software only, we're talking about a US B$ 1'300 global market with more than 5% growth ! That's terrific ! I this article can help, I shall claim 0,00001% compensation !

Hummmmm, let's go back to Earth !

Money vs Value

I'll sum-up my point with this famous quote

Cost is what you pay, value is what you get.Warren Buffet

This very simple statement shall help driving executive level decisions by reminding that costs are not closely bound to value, so you can act on it and maximize the value brought by your investments.

I wouldn't be able to count how much money I've seen invested within software projects on useless features, decommissioned equipments, fancy processes and obsolescent technologies, which severely impacted the overall cost of projects without bringing in any value.

In my experience, usual root causes of this kind of situation are

  1. Poor portfolio management within the performing organization, which prevent from having a full frame of reference of potential investment candidates
  2. Lack of strategic vision. I would also call it the don't-touch-it-and-keep-it-up&running syndrom
  3. Need for shorter and shorter time-to-market, which impose very strecthed deadlines and lead to failure in outlining the scope of investment with regards to global picture (market conditions, deployment roadmap and related synchronization, technical breakthrought adoption...)
Who is your CIO : Capital Investment Outperformer or Costs Increase Owner ?

The first one knows what money and value are about, and has implemented an efficient portfolio management strategy, build bullet-proof B-cases, knows roadmap for monitored projects, synchronizes schedules and takes enough time to study if addressing change is better than change the dressing.

The second one doesn't really know exactly how ongoing activities affect business performance, follows-up project unitarily, launches projects fast because "competition has to be beaten" or "because business teams need it ASAP".

Good wizard vs Bad wizard

Going back to C-level role raw definition, executives, all in their field of expertise, shall aim together toward the performance of the company they work for. This means, amongst other things:

  1. Innovate to produce at lower costs products keeping almost the same grade (disruption)
  2. Hunt each and every waste and continuously improve to generate productivity gains (continuum)
  3. Analyze and innovate to find right prices for the right markets, thus ensuring an acceptable (or even good) average profitability
  4. Find synergies to bundle one time efforts and thus decrease their impacts on unit prices
  5. ...

CIO shares the same objectives and, rephrasing his mission could be "Serve company's objectives by providing it with an appropriate IT / IS dedicated to business operations efficiency". Knowing the ultimate goal of his quest, the CIO shall do whatever it takes to craft company's IT / IS in order to make business operations optimized. This requires to know what efficient business operation mean.

An appropriate analogy for a good CIO could be done with an old, wise, good wizard, who uses large parts of his immemorial knowledge to draw the path on a map, make provisions and then complete his quest. Sometimes, he sits down, smoke some pipe-weed, and thinks about what could be the cleverest next move, based on his own knowledge and art, not on what others do.

However, as competition tightens, more and more CIO outsource knowledge - and sometimes, even common sense - to consulting firms, market trends analysis and other external resources which all depict the same global picture: what others do, or are expected to do. In return to lofty amounts of money, CIO are provided with "strategic drivers definitions", "strategic action plans" (often named with dumb names), which all are tricks in our allegory. Here is when fancy processes and requests start appearing : "That's a must to do big data analytics on our customers behaviors" for a company which has only few thousands clients, or "We've got to implement that new BYOD strategy" ignoring company's culture which has not yet switched to full VoIP telephony... As Unusquisque mavult credere quam judicare (Seneca - everybody prefers believing rather than judging), it's easier to embrace what the market tells you'd better do. That doesn't mean it's the better destination.

Who is your CIO : Capital Investment Outperformer or Costs Increase Owner ?

The first one knows what business is about, knows strengths and pain points of operation, stop and put things into perspective, has the knowledge on how harsh it is to build a consistent systems, then takes the required time to take key decisions.

The second one doesn't really know exactly how ongoing activities affect business performance, outsource strategic thinking, rush to the latest buzzwords or fancy technologies, complicate processes, don't address human, social impacts of his decisions.

Capital C: Choose your style - Courage or Cowardice

Balancing stakeholders expectations is not an easy task. However, this what is all about.

It often requires a certain amount of courage to tell business operations that they'd better have what they need instead of what they want, but, from my standpoint, that's part of best practices of the job. As Tom Kendrick says

If you were collecting specifications for a project deliverable from people sitting on a river bank washing their clothes with two large stones, their requirements would probably involve developing lighter rocks. The concept of a washing machine might not occur to them if the technology is not part of their experience.Tom Kendrick

Technology can create opportunities to seize, and CIO has in this case to be courageous, demonstrate strong habilities to convince, in order their company to have chances to take the lead. That's where the magic appears. That's where synergies between IT, IS and business operations can rocket up a company.

But that's also where company's culture and the way IT is seen within the company comes into play. Unfortunately, in still many companies, IT is still more seen as a necessary operation cost rather than a strategic weapon subject to a capital investment logic. In these cases, a key competency of the CIO in place will be politics, to be able to reconcile opportunities with company's culture and rally potential opponents. When company's culture is too strongly in avor of business operations, or CIO is lacking courage (or both), change management cannot be conducted in profitable ways, and CIO ends-up executing portfolios that could have been challenged. And costs increase as new demands from business pile-up.

I've recently been asked to seed a project on a reduced scope, in order to validate the concept prior to expanding it onto other domains over a couple of years. The goal was to use a software package along with bespoke software implementation is order to reduce future maintenance costs. One of the key feature of the system was to add new equipments support very quickly as pace of change was very fast. During the first months of implementation, we've clearly identified strong pain points with regards to how information was formated, which caused much design effort and led to slower time-to-market. We proposed to use a common, comprehensive pivot format, which could be directly injected into the software package. Fostering adoption of this common format could:

  1. Align business team with the use of a software package (direct link between the expression of needs and what is displayed on the application's screen)
  2. Make workshops far more efficient during further parts of the program
  3. Federate all business teams around a common language, facilitate resources switching / back-up

This, of course, required investment of business team to convert what "they wanted the contractor to process" (current heterogeneous formats) to "what would be good and useful for the future". Battle is still raging to propagate the virtue of this proposal across client company's strata...

Who is your CIO : Capital Investment Outperformer or Costs Increase Owner ?

The first one thinks out the box, knows which opportunities are good to seize, in which company's culture these fit, how to handle politics and convince business to work together on a shared vision as well as other executives to invest into his projects.

The second one doesn't want to or cannot challenge business's vision, do what business operations ask for, not necessarily what they need, is not empowered or trusted and let IT / IS be seen as "a necessary price to pay" to be able to work.

So, now ! Who do you think the CIO of your company / your customers is ?