For years, analysts and the IT press have been urging CIOs to become more strategic, to stake their place at the C-level table. Although that encouragement isn't wrong, it turns out that some IT groups simply weren't meant to be strategic. Laurie Orlov, a research director at Forrester Research (Cambridge, Mass.), has codified what she calls the three archetypes of IT: solid utilities, trusted suppliers and partner players -- the last being the strategic level to which we've all pushed CIOs to aspire.
No matter what your archetype, Orlov maintains, "understanding which is which helps articulate IT strategy and dictate trade-offs, and it helps IT achieve its goal of running more like a business." Furthermore, she adds, aspiring to the appropriate level will limit your frustration in the future. Unfortunately, figuring this out is not so cut-and-dried -- one company may have a division whose CIO should be a partner player whereas the CIO at headquarters should focus on simply being a trusted player. In this Q&A, Orlov talks about figuring out where you fit.
Q: Have the press and analysts been frustrating CIOs all these years, urging them to be strategic when they should have been something else?
A: CIOs have frustrated themselves, trying to be strategic and innovative in firms that didn't have the stomach for that kind of IT, either because the CEO did not believe in using IT that way or because the companies had steering committees comprising department heads voting on IT priorities. That's not going to transform an enterprise. In contrast, I'm sure that at companies such as Amazon, FedEx and UPS, the IT discussions are highly strategic. Governance drives what type you are.
Q: Describe the three archetypes.
A: The first one is the solid utility. The IT organization must provide cost-effective, dial-tone reliability. That is, the network is always there, the PCs function, the help desk responds and the back-office applications are up and working. The CIO typically reports to the CFO, and costs are expected to be transparent and reduced over time.
The second is the trusted supplier, in which you add project delivery to the solid-utility model. Some firms need centrally managed application projects to support process changes in and between functional departments. In these IT organizations, the CIO is likely to report to either the CEO or the COO and the enterprise expects to have all the infrastructure capabilities of the first level, in addition to having application projects managed centrally, and delivered on time and within budget.
The third archetype is the partner player, where the business is IT and IT is the business. IT organizations in these firms pour their energy into creating unique and competitive solutions for customers, suppliers and internal business users. As a result, there is little time for the delay in requirements translation between business groups and IT.
In addition to the reliable infrastructure of the solid utility and the project discipline of the trusted supplier, partner player organizations must deal with C-level expectations and are thus governed by the executive team.
Q: So it is possible to move from one level to the next?
A: Yes, CIOs can move from one archetype to another, but not without the support of the CEO and the executive team. The ones who fit into one archetype who are at companies suited for another get frustrated and quit their jobs.
Q: Is this one size fits all, or are there situations in which divisional CIOs belong to one category whereas headquarters CIOs belong to another?
A: It's not one-size-fits-all. Take pharmaceutical companies, which have strong business units. There's no way a central group can take on responsibility for everything that's going on in the business units, so the central IT shop would be a solid utility and the business units should be partner players. You could also have a partner player IT group in one division of a company and another division in which IT is tangential to the product or service. It's challenging, but CIOs need to know the type of business they're in.
I've spoken to CIOs who are moving from one kind of group to the other. My question to them is, 'Are the conditions around you right for that move?'
There are two catalysts for change: internal and external. Either the CEO brings in a new CIO, or competitors or customers change the rules of the game, and you can't have the IT department you used to have.
Q: How do you make sure you're the right CIO in the right position and not try to change an organization that shouldn't be changed?
A: You need to look at the interest level. If you think you want to be a partner player, you need to have an audience when you propose a new technology. Do you have the ear of the CEO? If so, do you have the interest of execs below the CEO? Because even if the CEO is interested, the project may never get done if those executives have other priorities. You also need to look at how IT is being measured. Is it being measured purely as a cost? If so, your chances of being a partner player are slim.
Instead, look at the role IT plays in business metrics -- is it contributing to profitability, revenue or a shortening of cycle time? That's your measurement. But you have to have the right processes at the right level in terms of operations. You have to be excellent at the archetype that is most appropriate.
Q: So you start with the solid utility and build from there. It goes back to the old idea that if you want to advance to being strategic, you have to have your ducks in a row to start with.
A: Yes, the worst of all worlds is CIOs who want to be partner players but whose infrastructure isn't reliable, so they can't even be a solid utility. If you fail at the first two, you don't get a chance to be the third one. Hence the lack of CIO tenure. It's also important that as you move up the chain, you don't lose your focus on what is going on at the previous level.
Courtesy of Optimize, a CMP Media publication.
Where Do You Fit?
According to Forrester's Laurie Orlov, there are three main archetypes for CIOs today:
1. The solid utility -- The IT organization must provide cost-effective, dial-tone reliability.
2. The trusted supplier -- Project delivery is added to the solid-utility model.
3. The partner player -- The business is IT and IT is the business.