Strategic CIO // Team Building & Staffing
Commentary
6/6/2012
10:16 AM
Larry Tieman
Larry Tieman
Commentary
Connect Directly
RSS
E-Mail
50%
50%

Why The CIO Position Is In Jeopardy

Disruptive market forces generated by IT are now turning on IT's builders and managers. The number of CIOs will decrease during the next five years.

I just replaced the icemaker in my refrigerator, once again proving the disruptive nature of the Internet and modern IT. More on why that is later.

For most industries, the market forces generated by IT are transformative, often disruptive. Consider retail.

Retailing has always been in the crosshairs of the Internet. While almost all retailers have an online presence, their strategies vary. Some supplement their physical locations (e.g., let customers order online and pick up at the store). Some retailers price their merchandise to compete with online-only competitors, hence undercutting their own physical store sales. Conventional retailers are trying every model in an attempt to weather the transformative forces of IT--forces that disrupt a variety of related businesses as well.

For example, my wife is a computer novice, yet she has learned to order clothes online and return them, if necessary. By buying online, she avoids having to drive an hour to the mall, an outing that usually turned into an all-day trip. No gas used. No lunch out. No extra purchases. No commission for the sales staff. When she returns a purchase, she has me use FedEx. It takes me only a couple of minutes, costs almost the same as the post office, and there's no waiting in line at FedEx Office (a.k.a. Kinko's) to drop off the package.

The U.S. Postal Service has been a victim (a passive victim) of IT-led disruption more than most organizations. I know lots of 60- and 70-year-old women who five years ago could barely manage to send an email who now tote an iPad, post pictures to Facebook, and have their own websites where they display their hobbies. Few of them send letters anymore. A lot of taxpayer money will go into propping up the USPS, but it will eventually have to restructure its business model.

Best Buy faces the same Internet-based challenges to its business model as did Circuit City, Soundtrack, and numerous other now-defunct electronics retailers. Its stores are filled with things I buy online. I used to go to Best Buy if I needed some memory for an old computer, but online tools now are a lot more accurate than most Best Buy sales associates, and the online stores have far more inventory. As people get more comfortable researching and buying expensive things on the Web, it's going to get more difficult for Best Buy to know what to keep in its brick-and-mortar stores.

Global CIO
Global CIOs: A Site Just For You
Visit InformationWeek's Global CIO -- our online community and information resource for CIOs operating in the global economy.

I was asked within the past six months if I would interview for the Best Buy CIO position. I declined. While Best Buy has time to adjust to the distruptive market forces IT has generated, I doubt it can without a brutal bankruptcy and restructuring. I have been involved in bankruptcy-driven restructurings; it's intense, emotional, and unrewarding work.

The future (if there is a future) business model for Best Buy and other retailers will be smaller stores that sell products that customers must see first hand, can't be "showroomed," and must be sold by expert sales staff. In other words, they will have to employ people with the expertise and sales skills that will attract customers to their stores. But even that transition is fraught with peril.

Consider high-end bicycle shops.

Boulder, Colo., where I live, is an intense cycling area with many exceptional shops that sell bikes, parts, clothing, and service. They're always under pressure at the low end from the likes of Walmart and Target, and they compete fiercely at a price point of $750 to $5,000. Few cyclists will buy an expensive bike on eBay unless it comes from one of the few sites selling excess pro equipment and they know exactly--to the centimeter--what they want. But consumable parts (tires, pedals, cleats, chains), which are expensive on high-end bikes, can be found online at serious discounts.

Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Page 1 / 2   >   >>
Sacalpha1
50%
50%
Sacalpha1,
User Rank: Strategist
6/19/2012 | 8:39:55 PM
re: Why The CIO Position Is In Jeopardy
I frankly sick of hearing about the consumerization of IT and how CIOs are going away and IT is going to have huge disruptions. Only a few industries are named in supporting these arguements, namely retail and hi-tech companies. Yes, these industries are heavily impacted. But what about the other 90% of companies......chemicals, forest products, core manufacturing, even consumer products. Yes, IT will be impacted by the new technology and new uses of technology, but this is no different that it has been for the last 40 years. Stop the hype!
amellinger152
50%
50%
amellinger152,
User Rank: Apprentice
6/13/2012 | 11:56:12 AM
re: Why The CIO Position Is In Jeopardy
One the of the flawed assumptions of this article is that the "cloud" is equivalent to the work an IT department does, or what a CIO does. This really shows the author's ignorance as to what a cloud is. Regardless of cloud type IaaS, PaaS or SaaS, none of the solutions out there have the data models, enterprise workflows, security, etc. used by a specific company. Like so many other technology fads (such as SOA) "clouds" are not a silver bullet to IT problems. Clouds provide opportunities for managing costs with regards to hardware, licensing and administration through consolidation and re-use.

Some of the things a cloud doesn't solve, and what a CIO will need to do. Which cloud provider should they use? What all services do they move to the cloud? What are the enterprise data models? What are the enterprise work flows? What are security and privacy policies? (If they don't have a CSO.) What are the disaster strategies? What sorts of data mining and analytics should be performed?

One would be naive to think that "the cloud" will just solve all out problems.
XTRANguru
50%
50%
XTRANguru,
User Rank: Apprentice
6/12/2012 | 9:26:33 PM
re: Why The CIO Position Is In Jeopardy
In my view, as automation sinks its teeth into software development, the number of developers will dramatically decrease, and the average skill and talent level of the survivors will just as dramatically increase. They will be either creating & maintaining systems using the automation tools, or creating & maintaining those tools. Because of their advanced level of skill and experience, they will be in short supply, so their geographic location will be irrelevant, and they will earn globally-based salaries. This will eliminate labor cost arbitrage as a business driver, which will wipe out the whole concept of "off-shoring". All of this will not happen tomorrow, but sooner than people think.

The implication for the CIO function, IMHO, is that it will become a position demanding an even higher skill level, will perform integrative/coordinative and vendor-selection duties, and will report to the Enterprise Architect.

Disclosure -- I'm the author of a computer language expert system that is pushing things in the direction I have described.
wburkhard168
50%
50%
wburkhard168,
User Rank: Apprentice
6/11/2012 | 2:22:53 PM
re: Why The CIO Position Is In Jeopardy
There once was a Vice President for Electricity! Where is that position today?

Almost every kid today knows IT at some level. Plus, systems are becoming more efficient, higher performing and easier to manage.

If you seriously believe that the CIO position is here to stay, you need to read Nicholas Carr's book: "Does IT Matter?"
MyW0r1d
50%
50%
MyW0r1d,
User Rank: Strategist
6/10/2012 | 1:41:03 AM
re: Why The CIO Position Is In Jeopardy
Of the CIOs I know most indicate their job is to manage the financial end of IT operations and the personnel of the department even more so in large enterprises. The senior staff I've met (other CXOs, Board members) see the CIO as managing relationships between the departments (operational and supporting) to ensure a balanced company approach to acquisition or projects against competing priorities (the budget end of the role). The CIOs have given IT strategic and tactical responsibility to the CTOs or division chiefs who understand IT from a technical standpoint. I fully envision and support the CIO, if it remains as a position and staffed primarily by MBAs, being subordinated to the CFO in SMBs.
Sam Iam
50%
50%
Sam Iam,
User Rank: Apprentice
6/7/2012 | 11:13:39 PM
re: Why The CIO Position Is In Jeopardy
Not the CIO. The CIO position will still be there to manage services vendors, manage the BA teams and maybe some development teams to customize the SaaS applications or develop on the PaaS applications. With everything happening outside the firewall, they will still need security to annoy users about changing their passwords. If you are using all kinds of public cloud services, someone is going to need to manage that spider web of integration. It is primarily just the infrastructure groups who will be involved in the "cloud" shake-up.
ANON1243456580967
50%
50%
ANON1243456580967,
User Rank: Apprentice
6/7/2012 | 4:08:58 PM
re: Why The CIO Position Is In Jeopardy
I too am not drawing the linkage between changed business models and the CIO position being reduced, in fact, with the new technologies, wrapping them together to achieve the strategic vision will be more important than ever. the focus, initiatives, knowldege to lead the IT department will change and migrate to meet the challenges, but I really don't see the role of the CIO going the way of the horse and buggy.

ProfMark
ANON1243456580967
50%
50%
ANON1243456580967,
User Rank: Apprentice
6/7/2012 | 4:03:51 PM
re: Why The CIO Position Is In Jeopardy
I
Wisesooth
50%
50%
Wisesooth,
User Rank: Apprentice
6/7/2012 | 3:54:50 AM
re: Why The CIO Position Is In Jeopardy
In the 1960's, the CEO of Chase Manhattan Bank, Mr. Agemain, was the keynote speaker of the automation conference of the American Bankers Association. IBM and the BUNCH (Burroughs, Univac, NCR, Control Data and Honeywell) were in the audience with their heads full of million-dollar dreams from banker attendees. Their big problem was how to manage billions of checks flowing through the banking system. Agemain came up with his ALOPTS (Agemain's Laws of Prudent Thinking. Everyone enjoyed the presentation except IBM and the BUNCH. There were 12 laws. I can only post three to avoid text overflow.
1. The surest way to make the new system cost more than the old is to pioneer the wrong thing.
2. The surest way to lose in poker or blow a computer budget is to throw good money after bad trying to make the wrong thing work.
3. It is not against the law for a peddler to puff his product. Beware of salesmen giving technical advice.
ANON1237925156805
50%
50%
ANON1237925156805,
User Rank: Apprentice
6/6/2012 | 10:45:07 PM
re: Why The CIO Position Is In Jeopardy
This is a very interesting article. Everything rings true--the perilous position of Best Buy, the changing role of the bike shop, the mechanic and even the fact that one can research, purchase and install a new ice maker without paying an extra middleman. We've all lived these things.

I can't make the leap from there to the diminished role of the CIO. It's true that many IT shops may streamline to consist of a core staff of wizards with lots of external black boxes doing the actual processing and maintaining of infrastructure. Staff that used to be employed by the company will now work for service providers.

In theory this will allow internal staff to spend less time sweating routine small stuff and more time on the big picture and the things that only the internal shop can do effectively. Fewer chiefs will be needed in this model and since some companies have taken to having local CIOs who report to the overall CIO there could be some streamlining there.

But at the top of the food chain won't all of this make the role of the CIO more critical? Determining what to outsource to whom and understanding how it all ties together will be an enormously complex process. Someone with a tecnology background and an understanding of the business's big picture needs to drive this process.

Relationships with key vendors who maintain critical systems and infrastructure will need to be managed by a high level executive who speaks the vendors' language, can respond decisively and with authority and most important who has the immediate ear of those on the top floor should a crisis occur.

If something needs to be brought back in house there needs to be a leader on board who can assemble the necessary expertise to drive that process. Security and disaster recovery issues become more complex as well. Bottom line, I can see the role changing but drastically I can't see it disappearing.
Page 1 / 2   >   >>
2014 US Salary Survey: 10 Stats
2014 US Salary Survey: 10 Stats
InformationWeek surveyed 11,662 IT pros across 30 industries about their pay, benefits, job satisfaction, outsourcing, and more. Some of the results will surprise you.
Register for InformationWeek Newsletters
White Papers
Current Issue
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join InformationWeek’s Lorna Garey and Mike Healey, president of Yeoman Technology Group, an engineering and research firm focused on maximizing technology investments, to discuss the right way to go digital.
Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.