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IT Turnarounds
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Other Management Stories
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September 29, 2003 (Computerworld) -- "Out of control." "No value." "Too late with too little." "Disconnected from the business." Those are all common comments about failing IT organizations. Management magazines tell of CIOs unable to cope in the boardroom and IT organizations spending the bulk of their resources on projects totally unrelated to business strategies. Unfortunately, the stories are all too often founded in fact and accompanied by news of the replacement of yet another CIO.
So, let's assume you're the shiny new CIO, ushered into the corner office by the CEO and chartered to "fix this mess." After the CEO pats you on the back and tells you how glad he is to have you on the team, what do you do? Is there a reliable formula for a successful turnaround? Are you going to get the bonus or the boot? That will largely depend on what you do in your first month.
There's a formula for this critical first month that will work in almost every IT turnaround. It has worked for me in three major companies and a spin-off.
Troubled IT organizations exhibit five basic symptoms. They're chaotic, unfocused, poorly led, demoralized and alienated. Each symptom has a root cause and, fortunately, a remedy.
Chaos
This is what nails most CIOs. Chaos offends the inherent sensibilities of chief financial officers and leads to the old adage that the CFO is the natural predator of the CIO. CFOs are paid to protect the financial assets and reputations of their companies. Cost overruns, unpredictability, failure to deliver promised results, and reports that are obscured by incomprehensible verbiage all threaten the CFO's ability to assure the CEO and the board of directors that the company's coffers and reputation are safe. The CFO must react in order to eliminate chaos, and that reaction often leads to the elimination of the CIO.
CEOs, likewise, are under intense pressure from the board and shareholders to deliver predictable results. CEOs get nervous when CIOs don't meet schedules and overrun budgets, and they will remove the source of that irritation: you.
Financial chaos occurs when the authority to spend money is disconnected from the accountability to adhere to a budget. Generous spending authority is delegated to surprisingly low levels within the organization that have little visibility and fewer controls. No one knows how much money is being spent, who's spending it, what's being received or how to get the situation under control. The cure is a three-step process:
1. Ask the CFO to appoint a key person to help you gain control of and manage IT finances. This person must report to the CFO. You must hand over 100% of the IT financial reporting to this person and make this person your most trusted adviser. Don't allow anyone not reporting to this person to be involved with anything remotely financial. Having an independent finance person reporting on IT gives you instant credibility.
2.
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