Ram Charan a leading Management Guru chimes in about the role of the CIO, particularly during the current "Uncertain times" faced by companies, in a recent interview with information week. Below are some excerpts of the same:
InformationWeek: How can CIOs and other technology leaders best help companies navigate this economic uncertainty?
Charan: I would like to address the CIO specifically. I find these people to be very bright and hard working, but they need to change their orientation, really learn about this financial crisis, what are its causes, where is it going, so they can engage in the right conversations at the CEO table. Item No. 2: They need to understand the cash-flow issues of the company. If the cash flow is down, where are the areas where they can help--outside their IT budgets--in the short term to free up the trapped cash, collect the cash better? Third, they need to think of the lines-of-business people as their customers. Go and sit with them, interview them. And then come back to them with ideas. Fourth: What can they do in terms of the IT budget? Here, the exceptional CIO is going to shine. Having done the first three items, the CIO needs to take his team off-site for a day to reprioritize existing projects. Say you have 50 projects. You must reprioritize them according to what will free up cash flow in the short term. Then play this scenario out with your team: If for some reason top management cuts our budget in half or by a quarter, what will be the new priorities?
InformationWeek: So does the longer-term, transformational kind of work then take a backseat?
Charan: You have to look at your budgets in three buckets: First, the utility, keep the lights on, keep the computers working. Two is compliance. There will be more regulation. Do the benchmarking, be more efficient, try to standardize. Third is the discretionary projects. The thing I want to caution every CIO about: What criteria you were using in the fall of 2008 to call something transformational may have become irrelevant.
InformationWeek: Any parting advice for CIOs?
Charan: Remember you are a leader. With leadership in tough times, you need to be sensitive about the psychology of the organization. Take your IT team aside. Be honest. Tell it like it is. No sugar coating. Not too optimistic. Not too pessimistic. Your leadership is going to be tested.
Given the uncertain times, budgets are getting frozen / cut this is a given. But given this scenario it is important for all the stakeholders the IT side of the enterprise - CIO, IT Department, LOB Managers, Vendors, Partners etc - Come together and think through the priorities and approach to the needs of the institution. It is important that vendors to also participate with the IT departments and come up with new ways to help the achieve the objectives and also work with the enterprise to provide the best economic model for their services in the short term.