In this article:
|The Changing Role of the Corporate CIO|
“I just got back from Marburg, Germany, and I’m leaving soon for Siena, Italy,” says Lester Park, chief commercial IS and technology officer for the biotechnology company Chiron, as he stops in at his Emeryville, Calif., office. A frequent-flier addict? Hardly. But Park has correctly identified what the job of an IT manager is really about–working with the people in the business units on technology implementation. And successful collaborations call for effective, ongoing communications.
Photo: AP/Wide World Photos
Don’t be found guilty of poor communication skills. If you don’t relish the idea of squaring off against your CEO at the next session of “The People’s Court,” you’d better work on your relationships with your business unit managers. The plaintiff has a solid case–it’s the IT manager’s job to keep the lines of communication open–and you won’t like Judge Ed Koch’s verdict if you haven’t held up your end of the bargain.
The partnership between IT management and the business units can be just as critical as its relationships with the CEO and CFO. Yet it’s all too easy to overlook the business unit managers, at least in part because there are so many of them. Moreover, forming alliances with the business units takes much more than just being buddies; you have to find out what the businesses need and then sell the necessary technology.
“A major focus for Chiron’s IT department right now is implementing the SAP system [for enterprise resource planning] throughout the organization,” Park explains. “For a technology like SAP, where a lot of information is available, people start forming their own conclusions and making assumptions that are not correct. They begin to think that central integration will mean a complete loss of local control, and they take that as a direct threat to their operation. I try to link the reasons for the implementation to five or six major corporate objectives before I get into the details. Most importantly, I demonstrate how enterprise resource planning can be a vehicle for strengthening the organization, reducing overhead costs, and defining good business practices along each step of the way.”
Park has set up a six-step procedure he has found works well for establishing and maintaining good relationships with business unit managers:
1. Start by meeting with the overall head of the business unit, who will then open a path for working with the leadership of local groups within the unit.
2. Visit each local group to meet with its leader to discuss the goals and objectives of the implementation activity.
3. Put together a plan to support the implementation requirements.
4. Maintain contact through direct meetings and videoconferences.
5. Let the business unit recruit a core team to facilitate the implementation.
6. Work with the business unit on training the core team members.
“Education is the key,” Park adds. “There is a natural aversion to change, especially one that comes from outside, but I find that when the business units understand what we are trying to do, they are willing to participate. That’s why I spend so much time at other sites and on videoconferences. Especially with foreign units, where the language may pose something of a barrier, videoconferencing lets us exchange the nonverbal signals that will let me know if the message is getting through.”
Finally, Park always remembers the little guys. “It’s tremendously important to have contacts at the assistant director and manager levels. The people in the field are the ones who can know what is working and what isn’t, and we must have access to that information. I try to encourage people to have one-on-one chats over the telephone every month or so,” he says.
IT manager as teacher
As if managing all these relationships weren’t enough, the IT manager also has to play a leadership role, says Sam Wee, formerly the CIO of Computervision and now a partner with Cambridge, Mass.-based Benchmarking Partners, a consulting organization. Wee sees the CIO as a kind of missionary, spreading the gospel of best practices throughout the enterprise.
In order to facilitate successful alliances with business units, a CIO or an IT manager shouldn’t just do what the business units ask for in the narrow sense. Instead, the IT executive should do what the business units want while following current best practices. (For a view of how the role of the CIO is being affected by enterprisewide solutions, see the table, “The changing role of the corporate CIO”)
|Mission:||Control of information||Corporate champion of systems best practices|
|Corporate role:||Service provider to operations||Partnership with operations and suppliers|
|Organization:||Functional experts decentralized at operating unit level||Centralized corporate service providers|
|Skills:||Technical competence||Technical competence, partnership building, and cross-functional knowledge|
|Architecture:||Focused on platform technology||Focused on application capabilities|
Source: “Strategic partnerships: the emerging role of the CIO and CFO,” Benchmarking Partners, Cambridge, Mass., 1997
In a recently published report, “Strategic partnerships: the emerging role of the CIO and CFO,” Wee describes how the CIO can become so focused on delivering technologies on time and within budget that the objectives are overlooked and forgotten. The CIO, he says, has to remember that his or her primary role is that of corporate champion of best practices. “The final goal is not to get the software running–it is to define the problem and then get the best software running.”
Occasionally, this causes conflict with business units.
“The CIO’s role as champion of best practices can put a strain on the relationship between IT and the business units,” says Wee. He tells the story of the time he spent consulting for a large petrochemical firm. Had the CIO chosen to perform the task exactly the way the business unit had requested it, the project would have come in on budget. Instead, he took a different approach, one that implemented the latest best-practices approach, and the project went about 25% over budget. The CIO was able to justify the business reasons for the change by demonstrating that the net result would be a system that would save the corporation roughly 100% of the cost of the entire project.
“In this case, the IT department provided significant savings for the corporation as a whole,” says Wee. “But when the bean counters examined each corporate unit as a separate entity, the business unit was receiving the entire savings and the IT department was 25% over budget.”
To prevent trouble when a system is late or over budget due to the IT executive’s insistence on establishing best practices, business units should make a prior commitment to the IT shop–either directly, by paying for the service, or indirectly, by providing support at the corporate level.
In his experience, says Wee, the most important thing a CIO or IT manager can do to facilitate a successful alliance between IT and the business units is to come prepared to the meeting. He lists three questions that an IT executive should be ready to answer:
What level of integration will the business need?
What amount of collaboration will be necessary with customers or with vendors?
How can some of the new best practices that are now available support the business’ objectives?
While acknowledging the importance of strong partnerships between IT and the business units, Wee discourages CIOs from putting too much effort into personal relationships with business unit heads. “The average tenure of a CIO is only a couple of years,” he says, “and yet, during that time there will be multiple changes of business unit managers. The CIO should be documenting each project’s time frame, the budget, and business reasons. If you focus too much on personal relationships, then all your efforts walk out the door when there is a change in management. When you establish a solid business foundation, however, you will be in a much stronger position to continue the activity even if the players change.”
Before meeting with a business unit manager, John Alexander, formerly CIO for the Unum insurance company and now the president of Business Technology Consulting in Portland, Maine, always finds out whether the business unit focuses on products, customers, or operations. “There are such fundamental differences between these types of organizations that you can’t possibly pitch any system or methodology that will match all their needs.”
“The final goal is not to get the software running–it is to define the problem then get the best software running.”
–Sam Wee, a partner with Benchmarking Partners
Alexander also served as CIO for Reynolds Aluminum, where he saw an astounding disparity in the needs of various business units. “The packaging division was basically in the fashion business. The emphasis was on producing the product quickly; economics were not all that important. In the sheet and plate division, on the other hand, quality was paramount. And then there was the mining operation. Those guys had a mean operations cycle of 70 years from opening a mine to extracting the ore to the final cleanup. It was a real culture shock for someone coming out of an IT environment. You can’t expect someone who thinks in terms of decades to be too excited about business practices that become obsolete in 18 months,” he says. (Sometimes incompatible IT and business cultures can’t avoid a collision, as you will find in the horror stories in the sidebar, “Guilty of bad management,”)
By the time he arrived at Unum, Alexander had learned to set up some basic parameters for working with the business units. “We had a flat rule: IT would not initiate work on any problem unless it had both a full-time IT manager and a full-time business manager,” he explains.
Alexander also enforced rules about learning to work together. The IT and the business unit managers were required to take a training course together before the project started. The IT manager was not allowed to take the course unless the business unit manager attended as well.
“The principal job of the IT manager is to communicate arcane, highly technical information in a way that the people in the business units can understand,” says Alexander. “The way we found works best is to have IT and the business unit form a bond during the training phase and to maintain that bond throughout the project.”
When Randy Dugger, who now runs the San Jose-based Dugger and Associates consulting firm and is an analyst for Datamation, was CIO of Sequus Pharmaceuticals, he found the key to success lay in being proactive. “Forget about people coming to you,” he says. “They won’t. The second-tier managers will come to meetings if you arrange them, and we found that bimonthly meetings worked well for maintaining communications with the business units. As for the top management in the business units, we could never work out meetings that would fit with their schedules, so we just set up one-on-one meetings with those individuals.”
According to Dugger, “There’s a delicate balance of politics between not keeping senior management informed and getting in the way. Just always make certain you understand the business and its objectives before you meet with the business units. Then, once you have a good sense of the big picture, stay in close contact with the business unit management to be sure you find out if their requirements change.”
In short, get out of your office! //
Guilty of bad management
Sometimes CIOs and business unit managers just cannot work together well. Maybe it’s one side’s fault, maybe the other’s, but either way, the results border on the criminal. The following stories are true, but we’re withholding names to protect our sources (because they wouldn’t talk without guarantees of anonymity).
One CIO at a major corporation set up a complex, very expensive project to overhaul the entire way the corporation did its business. About a year into the project, he found that someone in one of the larger business units was doing essentially the same thing. One year wasted.
The second year, the two groups merged their activities, though not without major turf battles. Then they discovered they were lacking some of the necessary skills, and trained technical staff were not easy to find. Two years wasted. At the end of the third year, the technical personnel finally were in place and development was getting under way. By this point, however, the CFO had gotten sick of waiting and outsourced the whole activity. So after three years and vast amounts of money spent, the project simply ended.
Then there was the time one of the leading stock exchanges implemented a new automated reporting system. The executive vice president of the exchange knew nothing about information systems or scalability, but he decided that it would be reasonable to plan for the software to support twice as many issues as were listed at that time. The IT manager urged the exchange to plan for greater growth, but he was unable to get the executive VP’s time and wasn’t able to make a clear case for why the was plan was a mistake. The result? A costly system that was scrapped in less than two years, and a couple of high-level executives moving on to new opportunities.
Sometimes the CIO doesn’t have a chance. At another company, the sales department bought a $180,000 salesforce-automation system without consulting the IT department. If only it had. The IT office knew that the company selling that particular tool was tottering, and within a year, the vendor was out of business. To make things more interesting, this particular piece of software used a nonstandard format, a fact that the IT department also knew. That might not have mattered if the vendor had survived, but as it was, the IT shop ended up with quite a project figuring out how to glue all the data into a standard salesforce-automation package.
Eva Freeman is a freelance high-technology writer based in Bellevue, Wash.