Home > Technology & Telecom > Right time for CIOs to evaluate their IT business practices

Right time for CIOs to evaluate their IT business practices

December 13, 2009 Leave a comment Go to comments

This year and 2010 will be the time to make or break a career in IT as CIOs find themselves at a crossroad to decide whether to remain on their current path of performing IT activities or go in a different direction.

“We are now within one of the rarest and most fleeting periods in business – nearing the bottom of a recession and before a return to growth,” said Ken McGee, Vice-President and fellow at Gartner. “We urge individuals to exploit this unusual opportunity to question the efficacy of their IT business practices and determine whether those practices warrant change. But they need to act now, by the time business growth returns, they will be far too busy, and it will simply be too late to change.”

As organizations modernize IT infrastructure, many of them are considering cloud computing strategy. Executives must be able to modernize and fund within the context of cloud computing in the future. “They are less likely to feel that they are paying twice for modernization when cloud computing is officially adopted,” said McGee.

“CIOs must also keep in mind that they must be able to replace existing budget methodologies with zero- based budgeting principles. It is important to become the CEO of IT by becoming an IT CFO. This helps in teaching contract negotiation techniques and establish signing and agency authority list for vendors.”

For decades, organizations have empowered IT associates to negotiate multimillion-dollar hardware, software and service contracts, even though those associates have never been formally trained in doing so.

Gartner recommended the hiring of an IT CFO, as well as better training for IT associates involved in contract negotiation and tighter controls to limit unauthorized purchases.

Even the IT information disclosed to executives must be supervised. The procurement and accounting department challenges must be addressed immediately. Those presenting contracts to executives for signing need to ensure that they are being transparent and clear. For example, they should have no qualms about including the following disclaimer on contracts presented for executive sign-off: “Before you sign, please note: The prices, terms and conditions in this contract are not the result of a competitive bidding process.”

The executive being asked to sign the contract will then be in a position to decide whether to put his or her name on it, equipped with the knowledge that it has not undergone the rigor of a competitive bidding process, or a comparison of prices prevailing in the marketplace.

Gartner found new CIOs for global 2000 companies must have served as managers or executives of departments or divisions other than IT. Managers must decide when to encourage aspiring CIOs to leave IT to foster the pursuit of career goals in the wider organization. CIOs must also able to simultaneously resolve cost- cutting efforts and business expansion.

As globalization levels continue to grow, solving how to simultaneously support positive and negative growth will become one of the most complex IT organizational challenges of the next decade.

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Categories: Technology & Telecom
  1. February 24, 2010 at 3:22 PM
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