2013: Not The Year Of The CIO – Yet Reply

It is highly unlikely that this will be the year of the CIO.  Tom Curran is entirely correct that CIOs need to get closer to business units to prove their value.  After years of uncontrolled IT budgets and then recent vicious cost reduction programs CIOs need to prove that they are more than email, storage and security.  CIOs need to be proactive in supporting the cost of businesses and that means developing capability.

Firstly, there are 3 types of business tech: (i) embedded systems such as robotics, (ii) operational systems such as customer ordering systems, and (iii) management information systems  such as email, ERPs, ERMs, collaboration tools etc.  The first two are largely accounted for in the cost-of-goods-sold but the latter is usually accounted for as overhead in SG&A.  Although their worth is unquestionable (could a large company really do without email these days?), it is these MIS systems which are notoriously hard to prove the value of.

There is still little evidence that MIS directly increase profitability.  Corporate IT spending largely increases in accordance with SG&A costs which tells us 2 things: (a) that as companies grow and increase their revenue they increase their management commensurately, and (b) IT is bought to connect this management.  There is not some inflection point where systems are bought, magic happens and companies become organised.  Organisation is the job of the business but enabling that by bringing distributed human communities together through electronic communications is the primary purpose of MIS.

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In order to become the critical enabler that it has always wanted to be IT needs to focus on capability and not just costs.  Although Tom suggests that this will be achieved through in-house architects I would suggest that in-house capability is too hard and costly to maintain at the requisite level to actually analyse and build business capability.  The only function that should be retained and honed, in-house, is information mangement.  Businesses need to be absolutely certain about exactly what information (at an atomic level) actually makes them money  – and how.  Outsiders without the context, peripheral information, subtext and political insight cannot adequately contribute to this role.  Only once the business understands its financial the anatomy of its fianancial dependencies can it adequately source architectural support in order to build business capability.  The business which misses the point and only develops architecture is just gilding the lily and will just be rewarded with a higher overhead burden which they need to chargeback to disgruntled internal customers.

Is this achievable in 2013?  The likelihood of this belies my underlying assumption that CIOs do not belong in the C-Suite.  As critical as technology and information is to business it is only a critical enabler and not a separate function in itself.  Due to the radically different skills which the technical community possess I do not believe that they will ever be able to set the agenda in non-digital industries.  Putting CIOs in the C-Suite merely overemphasises the importance of technology as an end and not merely the means.  It is here I think that standard operations should stop abdicating its responsibility and start setting the technical agenda and this will certainly not happen in 2013.

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