Whilst researching this article, I decided to just Google “CIO-as-a-Service” to see what came up. Interestingly the first 47 organic search results were either links to vendor’s service offering pages or blogs doing the soft sell. So clearly IT service providers feel that there is a market opportunity here.
What I find interesting though is that, in comparison, during my twenty years’ experience in the IT industry, I’ve only seen one organisation take up CIO-as-a-Service. You guessed it: it was a complete disaster!
So why doesn’t CIO-as-a-Service / virtual-CIO cut it?
1. Lack of insight with respect to business processes
One of, if not the primary role of a CIO is to develop strategic goals, not just for IT anymore, but for the organisation. Never has this been truer than in this era of digital disruption: think cloud, big data, business intelligence, artificial intelligence, internet of things etc.
To make strategic recommendations which translate to real business benefits, a CIO must first understand the business processes inside and out before being able to find ways to improve them. Gaining this knowledge takes time, and with virtual-CIO (vCIO) being an outsourced service, it typically comes at a high cost.
2.There is a question of trust
Another important role of a CIO is to educate management and employees on the business value (and risk) IT systems hold for an organisation. However, the human brain is distrustful by nature, so it can be difficult to build relationships and rapport with colleagues as an outsider. This is compounded when a vCIO works remotely much of the time.
Whilst this issue can be overcome, it does take time. This ties back into the question of cost.
3.Â Financial responsibilities
Few people are comfortable outsourcing responsibility of their own personal finances, so it’s quite understandable to see hesitation in handing over the purse strings of an organisation to a vCIO. Setting budgets is one thing, but outsourcing the responsibility to approve spending is another thing entirely. If the vCIO is not provided with a delegation of authority, this responsibility just goes up the chain and places more strain on another C-level exec (CEO, CFO or COO typically).
4. People management responsibilities
Similarly, most CIOs are also responsible for people management of the IT department. This is an activity that businesses would much prefer to keep in-house. There is also a perception that a permanent employee will have more loyalty and is likely be more aligned with the company values (obviously of paramount importance in a leadership role), rather than an individual motivated solely by money.
In my experience, the ever-increasing rate of technology change, mixed with consumer adoption of digital technologies, along with incredible success of digital disrupters like Uber, Netflix, Airbnb etc. has forced CIOs to rethink the role IT plays in every aspect of business, from operational efficiency to employee productivity to customer service, to business goals and even business survival.
Unless you are a small business where a CIO is cost-prohibitive, ditch the idea of a vCIO and keep this function in-house. Instead, focus your attention on delegating the oversight of day-to-day IT operations where objectives can be made more specific, and the success of implementation can be easily measured. These days, measuring your IT environment’s performance, availability and capacity is a commoditised activity. Measuring mean-time-to-resolution, first-time-fix for incidents and tracking problem management is a function of every commercial ITSM toolset on the market. But measuring “strategic vision”? Well, that’s not quite so straight forward.
So rather than outsourcing your CIO, look at using a virtual Service Delivery Manager instead. Given the vast majority of processes, procedures, systems and infrastructure they will be advising on are now largely commoditised, the vSDM doesn’t need to understand your business processes, meaning you’ll get a quicker return on investment. Further, advice offered by a vSDM will be fact based with verifiable metrics which removes the question of trust. There is no need to relinquish the purse strings or line management responsibilities either.