January 10, 2000

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Hired Guns: Temporary CIOs
Contract CIOs revamp IT, fill in for full-time managers

By Bob Violino

harlie Feld's role as CIO of Delta Air Lines Inc. ended in December. He didn't retire or get a promotion, nor was he asked or told to leave his job. When Feld was hired as Delta's top technology manager in 1997, he never intended to stay for more than two or three years. He sees his role as a facilitator, not a permanent fixture. "The fun part isn't the technology," Feld says. "It's helping to revive the human spirit. I love to go into organizations that are underperforming and turn things around with the same people who are already there."

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."

In addition to overseeing the Oracle transition, the interim IT managers provided guidance in setting up internal training and technical-support programs and created an IT steering committee to help evaluate future technology investments. As the contract was winding down, Schwartz says, interim CIO John Wheeler helped in the early stages of finding a new CIO.

Larry Olson, former CIO of the state of Pennsylvania, is now a principal at aligne Inc., a Philadelphia firm that advises companies about IT investments and provides interim IT management services. Olson says full-time CIOs at some of aligne's clients have left after completing Y2K projects, or following mergers or outsourcing deals. "An organization can't just stop functioning when the CIO leaves," Olson says. "It has to keep IT projects moving along during the transition." Of aligne's staff of 35, he says, 10 are former CIOs or VPs of IT.

One client is New York Presbyterian Hospital, whose full-time CIO left in November to join a new venture formed with First Consulting Group as part of a service agreement between the outsourcing firm and the hospital. Olson and Diane Daniele, a principal at aligne and acting CIO at New York Presbyterian, assisted the hospital in completing the outsourcing deal. Daniele will help the hospital find a permanent CIO to manage the outsourcing contract, set IT policies, and plan long-term strategy. In the meantime, she's providing those services.

"A lot of processes and standards need to be looked at and possibly modified, and that's the role the acting CIO must play," Daniele says. "Given the proper authority, an acting CIO can function as successfully as a regular CIO." The fact that Daniele learned much about New York Presbyterian and the health-care industry while working on the outsourcing deal helped the hospital decide to bring her in as interim CIO, says executive VP Louis Reuter.

Daniele, who previously served as acting CIO at National Media for 18 months and before that was a full-time IT executive at Reliance Insurance Co., expects to stay with New York Presbyterian until a new CIO is named, probably in the spring.

Interim CIOs can bring much-needed experience to an underperforming IT department. When Feld joined Delta, the company had no central IT strategy. "Decisions were made by departments, so there were 30 different platforms, 35 customer databases," he says. Feld's interim CIO status didn't keep him from spearheading some of the airline's most ambitious IT projects, as well as serving on Delta's executive committee. He has built an IT operation with a staff of 2,500 and encouraged the company's leaders to invest in new technology.

Among Feld's most far-reaching efforts is a customer-care system that lets gate agents track in real time which passengers are aboard an airplane, which helps cut standby confirmation time. The system is installed in the 26 largest airports worldwide and will be installed at 100 more this year.

Feld also launched an enterprise resource planning project, developed Web applications, and built an intranet for extensive training programs. Under his guidance, Delta expanded its use of mobile computers and wireless technology and tested extranet applications that let business customers buy tickets directly and avoid travel-agent fees. Delta also completed its Y2K conversions on Feld's watch. Feld turned over his CIO post to hand-picked successor Bob DeRodes, former VP of technology and operations, and will stay on for an undetermined period as a consultant for Delta's E-commerce initiatives.

This isn't the first time Feld has played the role of CIO-for-hire. Before joining Delta, he was acting CIO at Burlington Northern Santa Fe Corp. following the merger of Burlington Northern Railroad and Santa Fe Railroad. Before that, he was acting CIO at the premerger Burlington Northern, and, earlier, VP of MIS at Frito-Lay Inc. At each stop, he joined a troubled IT operation and helped turn it around.

It was after Feld left Frito-Lay that he formed the Feld Group, which specializes in renting IT professionals to help companies revitalize their IT operations. "We go into places that are in pretty bad shape, spend a couple of years there, and turn things around," Feld says. Although he serves as the Feld Group's president, his focus in the past two years has been on Delta. When he joined the airline, he brought along a team of eight people from the Feld Group, who were gradually replaced by full-time Delta employees.

Transition Partners' Pettibone says CIOs-for-hire differ from "steady-state" IT managers in that they can meet the challenge of improving IT operations without feeling politically or emotionally bound to a particular organization. A full-time CIO is often less willing to make changes because of pressure from senior officers. "We look at this roll as being a turnaround agent," he says. "We're doing the dirty work and making the hard decisions that have to be made."

But CIOs-for-hire say the position has its unique challenges. "You've got to be looked at as a member of the team and not as a contractor," says Gwyn Myers, who's working an 18-month stint as acting CIO at TWA until March. "And you must have strong support from executive management in order to be successful."

Photo of Myers by Edward Carreon

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