CIO Pitfalls 2.0

Here are five state-of-the-art trip-ups your predecessors never dreamed of.

When Mike Jones started moving his data center into a virtual environment 18 months ago, he anticipated a big drop in the number of new servers he would need. And Jones, who is corporate vice president and CIO at Children's Hospital of Wisconsin, got that prediction right. Virtualization saved his department from buying 30 to 35 new servers.

What he didn't foresee was the reaction he got from his application vendors. They refused to support their products in his new virtual environment.

Like other CIOs, Jones has found himself caught short by the vagaries, entanglements and unforeseen consequences of new technology. These are not your predecessors' pitfalls. Today, when technology is likely to come from outside IT as well as from inside, the trip-ups are more difficult to anticipate than ever.

Here are a few of the newest hazards, along with first takes on how your peers are dealing with them.

1. No Support

The vendors' reluctance took Jones by surprise. "One of the things we didn't understand when we got into virtualization is that they're not ready for it," he says. The vendors told him that because their software wasn't tested in the virtual setting, they wouldn't support it.

"If something goes wrong, it's not their fault. Isn't that a nice position to take?" Jones says. "So we're kind of taking a risk."

He decided to move ahead with virtualization anyway, figuring his department "had a better than 50/50 chance of things going right."

If an application has a problem, he can move it back to the original environment and start troubleshooting from there. (So far, Jones says, "everything has run fine.")

Still, this vendor issue has put a kink in the hospital's virtualization plans, Jones says, explaining that some critical applications, particularly those used in clinical care, will not be moved into a virtual environment until he knows the vendors will fully support it.

2. No Metrics

As vice president of IT at the Georgia Aquarium, Beach Clark delivers solid reports on business results to the other executives at the Atlanta-based organization.

To that end, he uses business intelligence technology to track data for the accounting and finance department and to monitor ticket sales generated by the aquarium's Web site and e-mail campaigns.

But Clark is stumped about how to measure the success of the aquarium's use of social networking sites in generating interest and ticket sales. "That was kind of the pitfall," he says. "We got to where we are now, and we don't know how to measure it."

Clark says that his IT staff teamed up with the aquarium's marketing department early last summer to figure out the best ways to use social networking sites such as YouTube. But as the aquarium looks to allocate future money and staff time, he needs to know how effective that work has been.

"We're out there," Clark says. "We have our account on YouTube and an account on Facebook and MySpace, but we're having a hard time measuring the advertising impact. We don't have a good way to measure it against traditional advertising."

Nor, it seems, does anybody else. "I've talked with other CIOs and marketing people, and they're frustrated by it right now too," he says.

Clark's team is chipping away at the problem. He says the aquarium can use traditional tools, such as surveys, to gauge the impact of social networking. It can also look at the number of views on certain Web sites. And the social media sites themselves are starting to produce statistics to give organizations such as his a glimpse into their effectiveness.

"Then we can see what kind of impact that stuff is having on us and on our revenue, and we can calculate ROI," he says.

3. No Room

Robert Rosen knew that his organization's storage needs were growing at a fast clip. In fact, the CIO at the National Institute of Arthritis and Musculoskeletal and Skin Diseases says he expected 30% to 50% annual growth in storage demand. But it has been closer to 100%.

"I planned on it to grow exponentially, but it's growing even faster than expected," he says, noting that one of the organization's research groups recently received a new machine for genotyping that, in its first month, generated 15TB worth of data.

The staggering growth in storage needs is an unforeseen planning challenge. "You have to figure out what to do with all this data," he says. "And even five-year-old research, even older data, they still need available because they never know when it will be useful."

And then there's the cost. Rosen says he's now looking at where he can trim an already tight budget to pay for additional storage. On top of that, he has to find additional physical space to accommodate the hardware.

4. No warning

When Kathleen King stepped into the role of CIO at Alabama Power in Birmingham a few months ago, she didn't anticipate having to help employees with social networking. But that's what they wanted, she says. And they had good reasons.

People wanted to use Facebook and MySpace at work to collaborate on business projects from various offices throughout several states. And since IT hadn't taken the lead, employees were trying to figure out how to use those applications on their own.

"It was a bit of a surprise to me how anxious people were to use it," says King, who oversees IT for Alabama Power and also works on some functional capabilities for its parent company, Atlanta-based Southern Co.

"I didn't realize how much the employee population would run in their own direction with this if we, as an IT organization, didn't move quickly to fulfill their needs."

Although she hadn't anticipated the issue when she first took the job, King moved quickly to address it. Rather than starting from scratch to customize MySpace or Facebook to meet the company's needs, she got a head start by taking a different path. She signed up about 100 workers for a pilot program to use a social networking application called My Site, part of the Microsoft Office SharePoint Server. Designed specifically for business collaboration, it was already in use at the parent company.

There is still a lot of work to do, but IT has taken the first step of engaging and directing employees rather than trying to catch up with them. "What we really want is people who are interested enough, savvy and want to take the time to help us get My Site to the level we want it to be," King says.

5. No Money

Like many CIOs, Rosen questioned some of the general economic practices that precipitated this fall's financial meltdown, but he was still surprised by the speed and extent of the fiscal collapse.

You don't need to be a CIO to have been caught short by that pitfall.

This past summer, as companies were firming up their 2009 budgets, CIOs generally expected modest budget increases -- averaging 2.9%, says Shvetank Shah, executive director of the IT practice at the Corporate Executive Board, a research organization in Washington.

Few anticipated that just a few months later they'd have to rethink everything. Shah says his organization has found that nearly 80% of CIOs are re-evaluating their 2009 budgets, with 50% expecting cuts of 10% or more.

"No one expected the hammer to fall as quickly and as far as it did. Now IT has all of these projects in flight -- half-built skyscrapers. What do you do?" Shah says. "They've got to make some hard choices about the projects they're going to fund and which they're going to let go."

Rosen, like others, is scrambling to cope with the effects of the flailing economy on his own $10 million-plus budget. He's working under the assumption that his upcoming budget will be funded at least at 2008 levels -- Congress has yet to approve a budget for FY09, which started Oct. 1. But even that isn't guaranteed, so Rosen says he's postponing capital purchases and other expenses, even if they had been planned.

"Things that we thought we'd start doing, we're putting on hold to see how things turn out," he says. "But when that will happen, we're not sure."

CIOs now need to develop new standards for prioritizing, Shah says. They'll have to recalibrate what's considered essential and nonessential spending. They'll have to better articulate the need for endangered IT positions that they know are essential. And they'll have to swap multiyear planning cycles for quarterly budgeting, breaking up large deployments into smaller bites that can be built in months, not years.

"What we're discovering is that CIOs are often ill-equipped to reprioritize and to do incremental rollouts," says Andrew Horne, the London-based senior director in the IT practice at the Corporate Executive Board. "But they have no choice."

Pratt is a Computerworld contributing writer in Waltham, Mass. Contact her at marykpratt@verizon.net.

This version of the story originally appeared in Computerworld's print edition.

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Copyright © 2008 IDG Communications, Inc.

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