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3/23/2007
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The CIO Dilemma

CIOs, burdened with cost cutting, risk losing their clout.

Over the years, the "I" in CIO took on a number of secondary meanings, innovation and intelligence among them. Now the moniker is on the verge of acquiring a less flattering association--irrelevance. After years of enjoying rising influence as they drove productivity advances, provided an infrastructure for customer and partner engagement, and exploited the competitive advantages of information, CIOs have become mired in cost cutting and systems maintenance. It's a career-threatening turn, one that progressive business technology execs are doing their best to steer through.

Many CIOs are now finding that, while their job descriptions haven't changed and the demands on their time and resources have increased, the parameters in which they operate are more confining. IT cost cutting brought on by the dot-com bust and recession of a few years ago has become the norm. Energy and resources that once went to innovative business initiatives now go to disaster preparedness, regulatory compliance, and IT security. Tech budgets tend to be flat or barely climbing, while some of the work once done by IT departments is being outsourced.

Four years ago, Nicholas Carr, in his Harvard Business Review article "IT Doesn't Matter," tried to convince the world that business technology had devolved from strategic advantage to tactical necessity. Carr's thesis was rejected by many people in the industry, but something like it, albeit different, is emerging as the new talking point. That is, the gradual loss of clout--or threat of it--for those business technology executives preoccupied with cost management at the expense of innovation.

At Global Crossing, Wagner cut costs, helped sell, then took on an expanded role

At Global Crossing, Wagner cut costs, helped sell, then took on an expanded role

Photo by Sacha Lecca
"It's a tough job in a tough business environment," says Mike McClaskey, CIO and VP of infrastructure solutions for Perot Systems. "It's easy to be marginalized."

Not exactly the gung-ho attitude of a few years ago, and that sober assessment is shared by other business technology execs. In an InformationWeek Research survey of 150 CIOs and VPs of IT released in January, three-quarters characterized their companies' approach to technology investment and strategy as conservative or moderate. Only a third said their budget allows them to take risks and even make some mistakes.

The numbers reveal a divide between what CIOs aspire to accomplish and think they should be doing on one side, and what they're actually achieving on the other. A survey last fall by Optimize (InformationWeek's sister publication) found that a clear majority of CIOs (64%), other C-level executives (64%), and line-of-business managers (54%) think CIOs are increasing their influence over businesses decisions at most companies. Asked the same question about their own companies, however, the respondents weren't so sure: Fewer CIOs (60%), CXOs (53%), and line-of-business managers (44%) said the influence of the CIO was growing in their own organization.

This gap between ambition and reality played out in the InformationWeek survey as well. Virtually all CIOs said their companies are somewhat or very effective at using technology for business innovation. At the same time, almost half (49%) said their companies are either becoming more conservative in how they invest in and deploy new technology or not changing their IT investment strategies significantly (see "IT Culture: Too Safe For Comfort," Jan. 29).

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In that space between innovation and maintaining the status quo, frustration breeds. Chris Anderson, author of The Long Tail and editor of Wired magazine, put it succinctly this month after attending a CIO conference: "CIOs, it turns out, are mostly business people who have been given the thankless job of keeping the lights on, IT-wise," Anderson blogged. "And the best way to ensure that they stay on is to change as little as possible."

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