Monday, September 24, 2012
CIO Performance Metrics
In the last few weeks there has been a lot of publicity and visibility on the fact that CIOs are being or going to be measured on business metrics, many of which they do not control or influence directly or indirectly. This sparked many a debates on various forums that attract CIOs, social media sites and groups that are dedicated to IT leaders. Not that anyone tried to contain it, the fever spread globally very quickly with reactions that spanned the spectrum of emotions.
Traditionally IT was measured on three aspects; operational efficiency, budgets, and delivery of projects. The connected world also added information security. Disaster recovery and business continuity surfaced and made it to the dashboard. Somewhere business benefit crept in and then projects were also reviewed from a business angle. Regulatory compliance required significant IT support and thus edged in. But revenue, profitability, customer acquisition or retention, product availability ?
How does the CIO influence any of these ? Can better IT deliver additional growth ? Will technology drive profitability ? What can the CIO do to acquire new customers or retain existing ones ? And what about product quality or availability ? If cash flow is an issue, how will systems ease it ? Competition has a better and cheaper product or a great marketing strategy, can IT or the CIO counter it in any way ? If the answer to one or more is no, then why link performance or compensation to these measurements ?
I know some of the CIOs who have been there done that, evolved beyond technology and/or taken additional business roles will say that the CIO can indeed contribute and influence most of the measures above. This is achieved with systems that create operational efficiency, business process management, information visibility, business intelligence and analytical models, and even enabling new models of engagement with the new trends and hyped technology troika, Big Data, Mobility, and Social Media. Cloud and Outsourcing are passé; everyone has done it or is doing it
It is evident that this piece of news has many people worried, and not all of them are CIOs; they are propagating the message that if I cannot control something, I should have the choice to determine if my performance is likely to be impacted. Fair point if the organization worked in perfect silos. In business and life uncertainty is certain and thus even the metrics that seem to be under control have dependencies – internal and external – which are beyond one’s power of influence.
Does the CEO control how the industry will behave ? Can the CFO control interest rates or liquidity crunch ? If the customer does not buy, what can the CMO do ? Rhetorical questions ? They are not helpless, but there is a limit to their ability to influence the outcome. They do play a role and they depend on the rest of the CXOs to work lock-step in achieving success. CPO (Chief People Officer) has to help hire and retain the best talent, CIO has to ensure information availability to key stakeholders for decision making and analysis. That’s what the C-suite is all about.
So if the CIO stakes claim to the table, it comes with a set of obligations and responsibilities; it comes with the territory; all CXOs are jointly and individually responsible for the success of the enterprise. It is not about “I have done my part and now you go figure”; I believe that CIOs should and does actively seek this responsibility and then works with others in shaping the future. The C-suite has to take this variability risk. Only then can the CIO aspire to take a position on the Board or become a CEO.