Goodbye to the CIO? Or, Goodbye to the IT Budget?
Steve Romero Posted on Thursday, March 29, 2012 at 9:18AM Last week I responded to an online CIO article titled,” J.C Penny Slashes CIO Role” http://bit.ly/GVXoHE. The article comments on the appointment of Kristen Blum as Chief Technology Officer and the elimination of the CIO position that was held by Ed Robben, who recently left the company. After reading the article, I left the following comment:
“The provocative title of your post got my attention, but it is far from accurate. The new CTO is the new CIO - plain and simple. The elimination of the title amounts to little more than a shell-game. I am sure it is symbolic of the new JCP, but it is shamefully meaningless if not outright misleading. There is no doubt his game-changing simplified retail business model will reduce the need for the IT systems required to support the countless ramifications of the conventional business model based on ever-changing product pricing. But the future of JCP will be far from bright if the CEO believes he can turn JCP around without leveraging IT for strategic advantage. If IT does not play a role in driving business innovation, he is merely delaying JCP’s inevitable demise.
If you read the article you will understand my response, even if you don’t agree with it. I thought I might have been a little hard on CIO until I read the next two comments left by readers – which were far more critical of the incendiary title of the post.
After I posted my comment I continued to reflect on the article because the future of the CIO is a topic in which I have much interest. I recently wrote a blog post focused on the ridiculous notion of the end of the CIO http://bit.ly/zbWu72. Also fresh in my mind was the brilliant "must-read" post on the subject by Peter Kretzman http://bit.ly/GIGK00. But as I spent more time contemplating the alleged elimination of the CIO from JCP I actually came up with another possible conclusion - one that I find rather hopeful. I submitted another comment to the CIO article the next day but it has still not been posted. I decided to write a post Instead of waiting for my comment to be “approved by the moderator.”
There may be some method to the madness of eliminating the role of the CIO at JCP. Could it be that the CEO is using the "slashing of the CIO" to eliminate the divide between IT and the business? By eliminating the CIO, he could be eliminating the CIO"s budget - the IT budget. The new CTO will continue to be the technology leader, but by eliminating the IT budget, all technology investment funding will come directly from business unit budgets.
In my book, "Eliminating 'Us and Them' - Making IT and the Business One" I suggest there is no such thing as an "IT project." That in fact, all projects are business projects involving varying degrees of technology. I argue that the notion of IT projects forgives the lack of enterprise governance of IT that ensures all investment decisions are made by the business and directly linked to enterprise strategy and the delivery of defensible and quantifiable business value.
I have been contemplating taking this idea further by suggesting enterprises eliminate IT budgets. Instead, ALL technology funding would come directly from business unit budgets. This would require sound IT governance and capable governance mechanisms (roles and processes) enabling the enterprise to draw direct correlations between all IT-spend and business consumption and value-realization of the technology delivered. And I am talking all IT-spend, projects and keep-the-lights-on expenditures. This would require good strategic planning, project and portfolio management, financial management, service level management, and configuration management – just for starters. There aren’t many enterprises that can claim they have these governance processes in place and up to the task.
So if eliminating the CIO eliminates those IT domains that are divided from the business, I am all for it. You can call the new technology leader the Chief Technology Officer, the Chief Transformation Officer, the Chief Innovation Officer, the Chief Ones-and-Zeros Officer, or whatever - as long as that person ensures and assures everything Peter Kretzman describes in his post. And there is no chance of them doing so without sound enterprise governance of IT.
~ Steve ~
Reader Comments (4)
Hmmm, what goes around comes around... sounds like Charge Back of non-project IT costs to business unit budgets, usually referred to as gray or funny money, especially if it affects business unit managers' bonuses. I have seen that go really bad, to the extent that business units have gone outside the company for assets or services that were "cheaper" than internal IT...except that money sent outside the company by a business unit does not save the overall company money; those IT costs will still exist and be charged unfairly to other business units.
So, governance must be extremely tight... not of IT, but of manager compensation.
Yes, reducing the divide between business and IT is good, just as it is good for reducing it between business units and HR, or Accounting or Legal. IT gets all the attention because of the large size of its budget. So I suggest finding other ways to reduce the divide... playing with funny money can be dangerous.
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