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By Tom Sheehan
CIOs roles have been shaped by decades of enterprise computing advances. Relevant CIOs have stayed ahead of the curve, and have evolved from the ranks of programmers and systems administrators to students at the top business schools seeking their MBAs.
The C-Suite has embraced the role of the CIO for more than a decade now and are asking their CIOs to deliver more than just IT solutions but entire business solutions. There are several disruptive forces that are causing these savvy executive teams to reconsider how the CIO function will add strategic value in a world where cloud computing, distributed architectures and mobile devices are essential for future competitiveness in nearly all markets.
The following are just some of the factors that are contributing to the evolving role of the CIO:
Rising Server to Systems Administrator Ratios
If you ever ran a data center you would fully appreciate the complexities in maintaining 10, 20, or even 100 servers that deliver business critical applications 24 x 7. Redundancy is not a luxury but an expensive requirement. Each of your servers is like a child in a family that acts up on occasion and requires attention. When the parent ( Systems Administrator ) does not perform the required maintenance swiftly, systems can go down resulting in data loss, outages, and angry customers. 15 years ago about 25 physical servers for each IT admin was the normal capacity for a worker. CIOs built organizational structures and budgets suited to that reality. Hiring, training, reporting lines, compensation, key success factors, annual reviews, career advancement and social norms were all built around that 25:1 ratio. Now, enterprise IT is facing the reality of ratios that are 100:1, 500:1 or even 1,000:1. Word on the street is that Google is aiming for a 10,000:1 goal.
This massive increase in administrative systems resources requires changes in the enterprise IT organizational chart. It changes who is hired, what skills they must have, how they will be trained and managed, evaluated and compensated, how they interact with and support business units, and what their long-term career paths will look like. The savvy CIO realizes this and is constantly trying to get more IT resource from a shrinking IT budget.
IT is to be Treated as Variable Cost
In the 1990s, when the CIO title was starting to emerge as a C-Suite management position, the primary reason for bringing IT into the executive suite was the massive capital allocations required to give organizations a competitive advantage through rapidly changing technologies. These technologies demanded larger and larger percentages of the corporate budget, so a direct line to the president or CEO was essential in justifying these spends.
Cloud and next-generation IT strategies dramatically change this. What was once CAPEX increasingly becomes OPEX (operating expense ), and long-term risk falls accordingly. Therefore the strategic value in having IT in the executive suite is more important than ever. CEOs who think they can mange this important function by hiring glorified project managers who produce numerous reports that are ignored are at a tremendous disadvantage.
The cloud computing model is a game changer. The increase in business agility and responsiveness that cloud computing makes possible shifts the strategic value of the CIO from a technical role to a business role. CIOs must understand the functions they support, so they can help these functions quickly put the infrastructure and applications in place to support quickly moving new ideas to market, testing them, and iterating them to general release. Competitors will be doing this and require that your organization follows suite.
End Users are Tuning into Power Users as They Can Auto Provision
Recall how PCs empowered departments within the organization to produce reports using spreadsheets and simple DBase like programs, well the next wave of employee empowerment has arrived. End users are gaining a level of power that makes past demands for integration of Blackberries and iPhones seem paltry. CIOs accustomed to pushing back against new ideas based on security threats and support burdens will increasingly find themselves cut out of the loop by end users who can go online and provision SaaS (software as a service) and IaaS (infrastructure as a service) with a credit card. When this happens CIOs start to loose control and the organization begins to suffer as different department deploy different vendor solutions requiring increasing costly maintenance.
As Vivek Kundra, the former White House CIO, has said, “the more a CIO says ‘no,’ the less secure his organization becomes.”
This post was inspired by Scott Bils' work at Forbes CIO Central on August 2, 2011.
Cross-posted from myITview.com
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