January 10, 2000
Contract CIOs revamp IT, fill in for full-time managers
By Bob Violino
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Feld is an example of an emerging category of IT managers who are hired on a contract basis to revamp IT operations or fill in until a full-time CIO is found. The advantages of tapping a growing pool of freelance IT talent are experience, both in terms of technology and project management, and objectivity, about personnel, projects, or management structure.
Some might argue that the temporary CIO isn't a new phenomenon, given the relatively short tenure of many IT chiefs these days. But the role of interim CIO is more prevalent, analysts say, as the tight labor market makes it difficult for companies to find full-time IT managers, as more CIOs look to switch jobs after wrapping up Y2K projects, as job-stress levels reach burnout proportions, and as E-business opportunities--with their lucrative stock-option potential--continue to proliferate. The rise of the CIO-for-hire "is a reflection of the times," says Lawrence Mancini, principal at HIS Professionals, an Atlanta firm that provides IT consulting and management services to the health-care industry. "There's greater turnover among CIOs today than there was two or three years ago."
HIS employs a nationwide network of IT experts, including interim CIOs, project managers, and specialists who are available on a contract basis to manage specific projects or functions or to fill a management vacancy. Though the firm serves companies in health care, Mancini says, rapid turnover of CIOs and the need for interim technology managers is "pervasive in all industries."
As the demand for interim IT management increases, some former full-time CIOs like Feld have found success in the role of turnaround specialist. Also, some have joined or formed companies that "rent" IT management services. Tom Pettibone was CIO at New York Life Insurance Co. before leaving to form Transition Partners Co., a Reston, Va., company made up of former CIOs that contracts out IT management expertise to clients.
"CEOs need a place to turn when the CIO has left to take a job somewhere else and there's no No. 2 to replace him," Pettibone says. He says that things often aren't going well in IT at these companies to begin with, whether through a lack of value for the IT dollar, because a project seems to be going off-course, or because of high turnover. "These companies need help and reasonably quickly," Pettibone says. "They can't wait months to find another CIO, and they can't rush into hiring someone who may not work out."
Transition Partners is providing interim CIOs at CSS Industries, Trans World Airlines, and the United States Tennis Association, and it's assessing the IT operations of at least three other companies that may need fill-in CIOs. "We've had more activity in the past six months than in the prior three years," Pettibone says.
Typically, Transition Partners does a four-week assessment of a client's IT operation, then advises the CEO or CFO on what's good and bad about the organization. The client often asks Transition Partners to stay on for 18 months to two years to turn things around, providing an IT chief and supporting staff. It's always with the understanding that they'll stick around long enough to fix problems and help the company find a permanent IT manager.
After the U.S. Tennis Association's IT director resigned last summer, it brought in John McAuley, a former bank and insurance company CIO who now works for Transition Partners, to help assess the association's technology needs and head its IT department for six months.
"We're in a situation where we're trying to put in a number of IT standards and best practices, and at the same time we're understaffed and underskilled in our IT department," says Robert Gebbie, CFO and director of administration at the White Plains, N.Y., organization, which promotes amateur and professional tennis and runs the U.S. Open tournament. "We decided to go outside and name an interim IT director who could quickly assess our needs and instill best practices." Finding a full-time CIO--including identifying the right candidates, bringing them in, and going through the full interview process--would take at least three to five months, Gebbie says.
McAuley began setting up standard IT practices, beefing up needed skills such as application development, determining the best IT investments for the association, and improving the IT department's ability to deliver on projects and services. "There was a shortfall between what was expected from IT and what was being delivered," McAuley says. As his work at the tennis association winds down, McAuley is helping it find a new IT director who will continue the work he began.
The Institute of Electrical and Electronics Engineers tapped one of Pettibone's CIOs-for-hire several years ago, when the IEEE's IT chief left in the middle of a major technology overhaul. "We were making a huge transition to an Oracle database from old IBM systems for everything from our financial systems to our worldwide membership directory of 350,000 people, and we didn't have the skills in our IT department to manage something like that," says Dick Schwartz, staff executive for business administration and CFO of the New York institute.
Rather than spend months looking for a full-time CIO or rely on outside consultants for such a critical project, the IEEE hired an interim CIO and a team of supporting managers from Transition Partners to "shadow" its own key IT managers for a six-month period, Schwartz says. "They stood behind our own people and made sure things were done the right way," he says. "It was a great relationship. They accomplished exactly what we asked them to accomplish."
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