The CIOs First 30 Days, Part II

Michael Wood
September 9, 2008

Part II- Assessing the IT Organization - Culture, Talent, Infrastructure & Maturity

This is the second installment of the three part series on the strategies and tactics a newly appointed CIO can use during their first 30 days on the job to help insure their success. In this installment we will be looking at assessing how the state of the IT organization can impact how the CIO shapes their "go-forward" strategy for IT. Once again, the answers to each question are accompanied with strategy and success roadmap-shaping suggestions and guidelines.

How big are the IT staffing levels, compensation and operating budget compared to other departments?

Question: Is IT smaller than other departments?

Strategy: Here you might want to understand why IT is spending less than other groups. Be sure to look at overall budget on a per-capita basis to insure that you are measuring like numbers. If possible, get the budgets of other departments so you can identify specific areas where IT spends less. Typically, IT payrolls are larger per-capita than other departments because it costs more to field a highly talented team of technology professionals. So if your payroll is smaller in this area, it could indicate a bias that is negative towards IT. Regardless of the reason, a small budget can be an asset as there is room to grow and thus you should begin to grow it, especially in the area of education, tools and talent.

Question: Is IT about the same as other departments?

Strategy: Like above, you should expect your payroll and education budgets to be larger than other groups'. If this is not the case, you will want to understand why.

Question: Is IT larger than other departments?

Strategy: Since you should expect a larger payroll and education budget this should not surprise you. Be aware though that if IT is not seen as a valued resource, other departments might be very resentful of the compensation and training IT staff receive. Factor this into the overall strategy if IT has service level issues and challenges. Here, you should create a compensation scheme that only rewards above average performance. Just make sure that the performance indicators are fair, objective and easily quantified and measurable.

How dependent is the company on the undocumented knowledge of its developers for the support and maintenance of custom applications?

Question: Is the company totally dependent upon less than 3 people?

Strategy: This situation can place an organization at tremendous risk, especially if the people holding the knowledge know it, are difficult to work with, and make the organization feel like it is held hostage. No matter what the attitude of this concentration of dependency, the CIO needs to quickly implement a plan to make the company independent of people’s specific knowledge in order to support, maintain and improve upon its business applications. Unfortunately, this situation exists, even in very large environments, especially when the applications in question were built by those who now are so heavily relied upon to keep them running. Painful as it might be, the CIO needs to document the applications to a level where support is transportable. One way to do this is to encourage the original developers to work with third parties to build specifications that accurately reflect what every program does, how the database is designed and how everything interacts. This can be done in layers starting with basic overviews and data models and working into documenting the detailed logic, protocols, dictionaries and rules of every application. This is expensive and difficult to do while change is happening on these very same applications, but it can be done.

Question: Is the company uncomfortably dependent?
Strategy: The same rules apply as above, but perhaps with less urgency attached.

Question: Is the company not at all dependent?
Strategy: Be thankful, and do everything you can to keep it that way.

How mature, resilient and reliable is the Infrastructure?

Question: Is the infrastructure is old and failing frequently?

Strategy: Nothing erodes IT’s credibility like an environment that is unstable and frequently failing. The good news is that it can often be fixed quickly and can make a huge impact in how the new CIO is received. The first step is to get the vendors involved and task them with proposing a solution to correct all the infrastructure defects. While they are busy getting this done, compile an analysis that quantifies the loss of business being caused by the outages. Yes, pour some salt on the wounds. If you want management to approve what could be a substantial capital investment, they will need to fully understand the value of the proposition. In addition, it will demonstrate that you are a person of well-thought-out action.

Question: Is the infrastructure aging but reliable?

Strategy: It can be difficult to sell the upgrading of an environment that is not causing pain. Here you might want to begin a phased upgrade approach. Begin by identifying current weaknesses along with the trouble signs that would signal a time to replace and upgrade aging servers, backbones, etc. This will demonstrate you are mature in your thinking and not trigger happy. Plus, as the signs appear, management will feel forewarned and be more likely to approve the expenditures.

Question: Is the infrastructure current but capacity constrained?

Strategy: Amazingly enough it is easier to get support to improve a capacity constrained in infrastructure than it is to improve an aging one that shows no visible trouble signs. When systems have varied response times, based on traffic and the like, users feel it. This causes pain and thus support for relieving the pain. If the constraint is storage, then the issue is easily quantified and thus easier to get budget to expand. Plus given the ever-declining cost of storage it makes no sense to ever have a storage constrained environment. Your initial effort is to focus on quantifying the pain points associated with the constraint and then to prepare a proposal for resolution, again showing your proactive approach to leading the IT organization.

Question: Is the infrastructure is solid as a rock?
Strategy: Send the ex-CIO a thank you note. Seriously though, if you are lucky enough to have a great infrastructure, acknowledge it and create a strategy for keeping it that way.

What kind of Disaster Recovery capability exists?

Question: Is Disaster Recovery non-existent?

Strategy: Disaster Recovery is like insurance: There is no ROI until it has to be used. If there is no Disaster Recover capability then the organization is truly at a HUGE risk. This risk is best quantified by analyzing how long the company can operate without its Information Technology working and at what incremental cost. Believe it or not this is rarely done. The ROI can then be calculated by comparing the cost of a Disaster Recovery capability to the loss that would be experienced should the IT facilities and capabilities be lost. Be sure to create several scenarios ranging from a one-day outage to total destruction. This way management can select the investment level they feel is most appropriate. If the company needs to be Sarbanes-Oxley compliant, then implementing a Disaster Recovery and Business Continuity capability isn’t an option but instead a major priority. If management fails to buy in to this you will need to constantly document your recommendations to avoid potential legal liabilities in the future. Also, you may want to keep your resume in circulation.

Question: Are there tape backups and restore procedures but no crisis management or continuity planning?

Strategy: Thinking that restoring back-up tapes is in some way an acceptable level of disaster recovery capability is like thinking a hand pump kept in the trunk of your car will help you repair a flat tire with a gaping hole in the sidewall. Essentially, follow the same strategy as above.

Question: Is there a plan, but one that is untested?

Strategy: The good news is a plan exists. The bad news is, it is untried and therefore as good as no plan. Within the first 30 days on the job, review the plan, set up testing dates and begin the planning and training for simulating outages.

Question: Is there a formal plan and processes that have been tested?
Strategy: Once again send your predecessor a thank you note and be sure to acknowledge this capability in your IT Report Cards and Status Reports.

How much of the Application Base is Custom?

Question: Are core business applications custom?

Strategy: There is nothing wrong with having custom applications supporting the core business functions. Sometimes it is the only way to support the unique requirements of the business. This is typical in industries where the potential install base is not sufficient to warrant the creation of commercial packages. That being said, be aware that the development side of your IT organization needs to be robust from design through change control. This means that you will most likely have substantially more staff than those shops in similar sized companies, which could require constant justification. During the first 30 days on the job, it is critical that you assess the ability of IT to reasonably support a custom environment. The perceptions of management and users will be quite telling in this area. Be open to suggesting that a scan of the industry for non-custom solutions might be prudent, especially if the attitudes toward the current systems related to functionality, reliability and support are low. In my experience, custom applications are a constant source of pain so if alternatives exist, even partial ones, identify them and consider initiating an exploratory initiative.

Question: Are most applications packages with modified components?

Strategy: This is the environment that most CIOs inherit. The same issues exist as in the situation above with one additional complication: You have to stay somewhat current with new releases. It is not uncommon for the reintegration of custom components into new releases to cost as much or more than the original customization efforts. Thus it is likely that the release levels you are at are sorely behind and in need of update. The worst scenario is when the release you are on is no longer supported by the vendor. This puts the organization in a high-risk situation and most likely an escalating cost situation as well. Here you need to raise a red flag right away and educate management to the exposure the current systems have placed the company in. Do it now, otherwise you risk the chance of being blamed later on for not being more proactive and assertive. Do your homework before the red flag goes up. As always, before delivering bad news, have the budget, time table, workplans, etc., all drafted and in hand.

Question: Are 90% or more of your applications packaged solutions?

Strategy: If you are lucky enough to have work in an organization that can use 90% or more of a third party solution out of the box then life could be good. First, the development side of your IT group can be kept small. You can leverage much of your support from the vendor. The down side comes if the vendor is not service-oriented or is slow in continually improving the product. One strategy is to become a player in the vendor’s user group. Getting on the board of the user group will provide you with influence that may otherwise not be available. Determine what size fish you are in the vendor’s installed base pond. Assess the relationship and take immediate steps to make any needed improvements. If you are heavily dependent upon a vendor for your core business applications then it is best to treat them as a coveted and respected ally. Request a visit to their facilities and a briefing on their future product improvement plans. Become one of their preferred reference sites (make them earn it though). In short, build their dependency on you; it makes for a more level playing field.

How large is the Project Backlog?

Question: Is the project backlog greater than two year...and growing?

Strategy: An aging and growing backlog can spell death to a CIO. If you find yourself in this situation you need to work fast to on the following crucial to-do items:

• Inventory all projects (approved and pending) and prepare an analysis of each in terms of Objective, Justification, Budget, Implementation Date, etc.
• Create a Project Portfolio Management function with a user driven oversight committee.
  Assess the quality of the PM organization and identify improvement imperatives.
• Present the “State of the Projects” to the committee and have them make prioritization and future direction decisions.
• Prepare a committee endorsed request for additional resources needed to achieve the committee’s directives and present to the leadership committee (CEO’s team).

You may or may not get all of what you ask for but you have logically and prudently identified key issues and demonstrated your ability to create consensus. These are powerful credits to management seeing you as the right choice for the job.

Question: Does the backlog go back about 12 months?

Strategy: A 12-month project backlog is not unreasonable. You should still take steps to commission a PPM function and user driven steering committee.

Question: Do you have a rolling backlog of about six months?

Strategy: You are in the good health zone. Stay there.

Question: Does your backlog consist of only a few projects?

Strategy: Just make sure that there aren’t more projects that need to be started. Sometimes too little is a sign of frustration and reluctance by users to ask for anything new.

SUMMING IT UP

The quality if the IT organization’s culture, talent, infrastructure and maturity are huge factors in shaping the newly hired CIO's potential for success. Amazingly, if the inherited environment is too good the CIO might find it difficult to make improvements and thus appear ineffective. If the environment is too faulty, the CIO may not be able to create positive change fast enough to be deemed successful. Ideally a new CIO’s best chances for survival is to inherit an IT group that is primarily strong, perhaps suffers from some relationship issues but has a great deal of talent and potential that is just in need of caring cultivation and quality leadership.

Next issue we will be tackling Assessing IT Service Levels – Satisfaction, Issues, Complexities and how the quality and state of service levels of the newly hired CIO impact their long term success roadmap.

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