HOME
OUR FOCUS
OUR RELATIONSHIPS
OUR DNA
NEWS
THOUGHTS
CAREERS
CONTACT
Thoughts
Enterprise Software Pricing: At the Tipping Point
Software Success Survey Report
Are CIOs Destined to be Shelfware
Effective Usage Driven Profit Growth
Software Maintenance Revenue Protection

 

Are CIOs Destined to Be Shelf-Ware?

Download PDF
Recently I came across an article that claimed very few CIOs progress to the ranks of senior management. What struck me about the article was that the author felt very little explanation was required to support his assertion.

Quite a bold statement I supposed, considering how critical IT is to the rhythm of business. But after some brief digging into studies that track CIO success the author's claim didn't seem so outlandish.

Consider these statistics:
  • Only 1% of Fortune Global 500 CEOs are former CIOs

  • Only 52 of the highest paid Fortune 1000 Executives are CIOs
These facts got me thinking. To what degree is this lack of CIO success connected to two other statistics that are very familiar to us at Neochange?
  • Two-thirds of IT investments fail to achieve intended business results

  • 96% of CEOs attribute benefits failure to IT no matter where the failure arises
It is hard to imagine that these two sets of statistics are not related.

Whether or not it is fair or not that CIOs are blamed for a lack of benefits realization, it is obvious that this situation has a significant impact on their credibility.

Interestingly, the current CIO credibility journey looks conspicuously like the Shelf-ware Process traveled by many enterprise applications. (see Shelf-ware Process side-bar at right). This is unfortunate because...

… CIOs that start this credibility journey tend to get caught in a vicious cycle of exclusion …

…that is extremely difficult to escape.

The cycle of exclusion works like this. Low and decreasing levels of CIO credibility limit their ability to influence executives throughout the enterprise. This lack of influence prevents the negotiation of realistic IT value performance expectations.


As the IT value expectation gap grows, the perception of CIO business acumen is further diminished. This growing perception of incompetence leads to an additional decrease in CIO credibility. Unchecked, this cycle continues to spiral downwards, creating constant negative pressure on CIOs.

Knowing this cycle exists is critical for CIOs because it reveals that the commonly proposed solution for improving business partner relations - better project alignment and communication skills - will not be enough.

Even further, delivering cost effective, reliable IT services will not reverse the credibility impacts of the vicious cycle.

Why? Because successful delivery against existing expectations will not create a material change in customer perception or satisfaction. The only way to reverse the cycle is to exceed existing expectations or to create new ones.

CIOs will need to reconsider their purpose and follow through with new acts of leadership if they wish to take control of the expectation dialogue (see sidebar at right). One high-impact area of leadership that is open to CIOs involves mastering, leading and leveraging the IT Adoption Discipline as shown below.


Leading the IT Adoption discipline can be more than just self-serving. The existing leadership vacuum is the reason why so many companies cannot achieve effective usage of their enterprise software and therefore rarely achieve their intended business results.

Since CIOs are the common denominator in all IT-led business transformations; it is no wonder they are bearing most of the blame for their organization's lack of success with IT. On the flip side, CIOs that can deliver unexpected service excellence by mastering the IT Adoption discipline in their own backyard and bringing a vision for value realization across the enterprise will be the ones that destroy the Shelf-ware Process.

Conclusion: CIO destiny is about personal choice

The statistics that track the shelf-ware journey suggest that the role of the CIO is currently moving in the wrong direction. We cannot afford for this to continue for two reasons.

First, IT represents the backbone of our global village and will continue to be a critical factor in enabling growth and solving complex business problems. Second, the opportunity cost of marginalizing a large pool of creative and committed IT executives is far too great for the business world to bear.

CIOs are sitting at the nexus of their organization and, depending on personal choice are well positioned to do more than just avoid becoming shelf-ware - they can choose to lead their organization to higher business performance.

CIOs must choose a new path forward to take control of their destiny. Leading the IT Adoption discipline is one way to create CIO credibility and ensures that companies maximize the returns on their IT investments.

Tracking the CIO's journey through the "Shelf-Ware Process"

Stage 1: Failure to Meet Performance Expectations

  • 35% of CEOs believe business strategy and technology are not integrated


  • 18% of IT projects fail, 53% are challenged (budget or time)


  • Most enterprise software achieves < 40% effective usage

Stage 2: Value is Questioned

  • 57% of CEOs believe the CIO only understands their business somewhat or not at all


  • Only 11% of business executives believe CIOs are business leaders


  • 42% of CEOs believe IT is just a support function

Stage 3: Marginalized by the Enterprise

  • 4 out of 10 CIOs report to the CEO


  • 1/3 of CIOs do not sit on an executive committee


  • Only 1% of Fortune 500 CEOs are former CIOs


Acts of Leadership: How to Reverse the Vicious Cycle of Exclusion

Act 1: Improve Effective Usage of IT Management Software

Most IT Management software achieves < 15% effective usage. CIOs can lead by example through increasing the effective usage of the software that runs the business of IT. Increasing effective usage will mature IT management processes that reduce costs, improve availability and manage complexity.


Act 2: Enable End User Monitoring and Effective Usage Metrics

CIOs can enable their Line of Business peers by identifying adoption challenges and improving the connection of software usage to value realization. One key step is enabling usage visibility with end user experience monitoring systems, which provide highly accurate and granular utilization reporting. A second is embedding effective usage metrics into the application portfolio itself.


Act 3: Drive Enterprise Adoption of Project Portfolio Management

CIOs can create value while getting closer to to their business partners by extending PPM adoption beyond IT.

The benefit of enterprise usage of PPM for transformation projects and project-based collaboration is 38 times greater than the savings possible for IT projects.


Quotation Sources

  1. "A Missing Competency: Boardroom IT Deficit," Burson Marseller


  2. "How to close the CIO leadership credibility gap," 2006, G.A.Curtis & B.Suh


  3. "The New CIO: Change Partner and Business Leader," 2007, IBM


  4. "The State of the CIO," 2007, CIO Magazine


  5. "Chaos Report 2004," 2004, Standish Group International


  6. Top Paid Executives, 2006, Baseline


  7. "Show me the Money," Gartner, 2005


  8. "10 Step Guide to Achieving Business Value of IT," Gartner 2003

back to top ^

For more information contact inquiries@neochange.com