Letter From CEO: Cut Maintenance To 60% Or You're Fired
So Pat the CIO gets the annual year-in-review letter from the CEO that precedes their formal performance-review meeting and the opening paragraph is a doozy: "Pat -- You did some great things in 2008 with mobile apps, data-center consolidation, and SLAs but you failed to cut maintenance from 80% of IT spending to 60% so I'm not sure you're the right person for this job. Prove me wrong by May, or I'll have to let you go."
So Pat the CIO gets the annual year-in-review letter from the CEO that precedes their formal performance-review meeting and the opening paragraph is a doozy: "Pat -- You did some great things in 2008 with mobile apps, data-center consolidation, and SLAs but you failed to cut maintenance from 80% of IT spending to 60% so I'm not sure you're the right person for this job. Prove me wrong by May, or I'll have to let you go."Armed now with intense focus, Pat reads on: "When we met at this time a year ago to discuss priorities for 2008, I made it very clear that we need the IT team to stop being a drag on our transformation plans and instead you and your team must help lead that vital effort. I also said that your willingness to continue to preside over an IT budget that pours 80 cents out of every dollar into maintenance and support is completely unacceptable, and that you had to find a way to cut that from 80% to 60%. Otherwise we just won't have the funding to support our new customer-driven initiatives.
"I don't want to waste our valuable time on any excuses you might have about how some acquisition threw us behind schedule or how these crazy 'perpetual licenses' are immutable. As I see it, the real problem is one of leadership and decisiveness. Your peers love their systems because they're familiar with them -- those folks don't want to change, and in some ways I can't blame them. But I do blame you. Because you haven't figured out a way to show them that these old, fat, slow, redundant, inflexible, and expensive systems are killing us. And don't tell me it can't be done because I just read in InformationWeek that Randy Mott just did it at Hewlett-Packard, and they're five times bigger than we are.
"Pat, I value highly your creativity and technical knowledge. But on top of those skills, what we need now from our CIO is leadership: I need you to get beyond the planning stage and dive into some tough decisions to get things moving and then execute relentlessly. We need to get back out in front by creating dazzling new products and approaches that make customers eager to do business with us and that give us the ability to compete in new markets and in new businesses.
"And to achieve all that, Pat, we need a CIO who's not just a visionary but also a doer. We need a CIO who realizes that IT expenses have to be massively reallocated, and that to do so will require tough decisions and rigorous execution. We need a CIO who's willing to dig into the guts of our end-to-end systems and processes and build better -- much better -- ways of operating.
"Before our meeting on the 19th, you have one week to put together the plan for how you'll do that, Pat -- not how you'll talk about it, but how you'll actually do it. And after that you'll have four months to prove me that you're the one who can make it work. I look forward to seeing that plan, Pat, and have a nice weekend."
OK, all you Pats out there, I'm sure many of you are fighting the 80/20 beast as well -- what's the plan? Where do you start? Does Pat have a chance?
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.