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Who owns the IT Strategy – the CIO or the CEO?

Who owns the IT Strategy – the CIO or the CEO?

In the last few weeks the American Media and particularly ZDNet went into a big debate on the future of outsourcing. Predictions of the return of strong internal IT and the death of outsourcing were recurring. Some quotes are enlightening: “… many enterprises will be reaching a ‘crisis point’ as they seek to outsource IT, and if they don’t understand the inherent risks involved, then they will suffer…” and that “..ultimately, the IT department of 2020 will not be about hands-on technology, but about governance.” (Jason Bloomberg).

The debate went on to discuss whether IT strategy was owned by the CIO or the COO (or CEO). Others used the point to further debate (not too constructively) on the merits of cloud computing and the impact on outsourcing. Needless to say many IT professionals screamed blue murder across blogs and chat rooms (“all outsourcing fails”) while some claimed that it is really down to governance.

In my personal opinion it is not “down to governance”… it should be “up to governance” but too many CEOs and COOs outsource (!) responsibility to the CIO and then to the typical third party advisors (TPAs) or their purchasing department without treating outsourcing as seriously as M&A would be treated. Two years later eyes are filled with tears and the vendor is regularly blamed. Outsourcing successfully is a fundamental governance issue and most boards are not strong enough (or educated enough) to poke their noses into the huge risks and future commitments which are part and parcel of most outsourcing transactions. Dealing with such core issues is our bread and butter at Burnt Oak Partners but we cannot wait until 2020 to get governance where it should be or will we have more and more DBS type failures leading to huge fines.

If IT were treated as it should be it would really be one of the key management board and supervisory board items. A set of long, medium and short terms plans and goals would be articulated by management, presented to the board(s) and approved. The “IT Vision” of the enterprise would be a board discussion and then the mission by internal (and external IT) would derive from the main plan. Impeccable logic.

In reality we are not there and information (not just information technology) is not managed properly. One short example to illustrate our point: Lip service is given to “know your client” or “we are a knowledge organisation”. Reality is that most firms are still relying on completely obsolete systems processing data across old organisational towers and that more and more effort has to be ploughed into pretending that one gets a single view of the customer.

Not trying to pick on American Express but I got my first card in 1973 and the firm still has not succeeded in looking at me as a client about 50 or so Amex cards later!

Risk is too often a measure of governance failure in IT and I do believe that raising the issues into the board room (and not just the CEO-COO) together with an intelligent program of education will eventually help senior IT management deliver the promised value they just cannot deliver in isolation. I have stopped counting the number of CIOs who were clients of mine in outsourcing deals and who, when asked what their #1 problem was, would not blame me, my firm or my competitors but, with a little prodding, would confidentially blame “management” and “the business”.

The right outsourcing needs to be smarter and help IT management raise their game which means that vendors need to field personnel and advisers who can take the dialogue to the board room and do not stop at MIPS, clouds and acronyms…

Posted in Outsourcing Comments: one

 

One Response to Who owns the IT Strategy – the CIO or the CEO?

  1. XopoS6G says:

    You developed some decent points there. I looked over the internet for any issue and discovered most individuals goes as nicely as together with you and your website.

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