Chief information officers (CIOs) keep their jobs for an average of only three years, but one in four has changed companies in the past 12 months.
The compentency of the CIO is key to establishing best practice in an organisation, but nowadays they must often assume multiple contrasting roles, becoming both a utility provider and a venture capitalist to survive.
This is the view of Chip Gliedman, vice president of Giga Group, at a seminar held by the IT consultancy in San Francisco today.
?Some 75 per cent of the IT budget goes on maintenance and operations, while the remaining 25 per cent is spent on new application development. This means that IT departments must become utility providers and squeeze complexity out of their systems - as if they were providing phones in a network. With new applications, they need to think of projects as if they were venture capitalists wanting a maximum return on their portfolio,? he explained.
A utility provider supplies efficient, low cost systems that are cheap to maintain and come with standard interfaces to make integration easier, Gliedman said. To help this process, IT should supply users with a single page document that describes enterprise standards to give them an idea of where the value is.
For example, the document should point out that TCP/IP is a standard in the organisation and that to introduce anything else would cost an extra $10,000.
On the VC side of things, IT should balance the concepts of risk and return and recognise that some initiatives are bound to fail. In fact, if they do not, Gliedman said, then CIOs are not taking enough risks.
A good rule of thumb based on VC thinking is that two out of 10 projects will fall by the wayside, six will do moderately well, and the last two will do very well.
But for this to occur, CIOs must influence rather than control the direction of IT and attempt to act as a facilitator, mitigating the competing forces of the business needs, the vendors involved in the project, and user requirements.
Finally, to determine which projects will provide the best returns for the business, they need to weigh up four crucial elements at once - cost, benefits to the business, flexibility and risk. Feedback loops should then be established to test for effectiveness and the data should be used in future to prevent IT from shooting blind.
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