Fifteen years ago, if one would have asked a CIO (or EDP/ MIS manager) about his ambitions, he would have probably said, "My first priority is to convince the management that computers are indeed required. Then I have to make sure that more and more aspects are computerized. I also have to ensure that breakdowns are kept to pretty manageable levels. Lastly, I want to continue in this job till I retire." Today, this is what you would probably hear from a CIO, "We have computerized almost all aspects of the business. We need to demonstrate RoI for the investments made. We have our own P&L, you know. Also, in htree-to-four years, I want to join the board. That’s my ambition."

It may be difficult to imagine the CIO in the board room. After all, the CIO is expected to run computers and not the company. While that is true from a traditional sense, the horizons for the CIO are changing significantly and pretty fast. If one looks back and tries to pinpoint the main drivers for the shifting horizons for the CIO, it would include buzzwords like Total Cost of Ownership (TCO) and Return on Investment (RoI). From saying, "Oh, that does not apply in my case", today’s CIOs are more than eager to demonstrate high RoI and lower TCOs.

Not too many CIOs have adopted these concepts by choice. In most instances, they have been driven down by the top management. Illustrating this was Nora Denzel, head (software business unit) of HP, when she said, "The top priority today is cost-cutting."

There are several maturity models for the CIOs to choose from. Almost all of them move from the reactive to proactive to the value addition stage. In the reactive stage, the primary concern of the CIO is to provide IT infrastructure and make sure that it works most of the time if not all the time. With tighter financial budgets, the CIO’s emphasis is on managing costs. In other words, the CIO is in charge of a cost center. Most of the organizations in India and over two thirds in the US are operating in this stage of maturity.

The next stage is to progress from being an infrastructure provider to being a service provider. In this phase, the CIO begins to understand how the IT infrastructure in the company has a direct effect on the level of services provided in the enterprise. CIOs have extensive discussions with various departments and negotiate service expectations. These are documented in the form of service level agreements. Another option at this stage of the maturity model is for the CIO to start charging for some of the services that he provides. The marketing team could be charged for the amount of bandwidth consumed during their video conferences, database usage can be charged for or perhaps even email usage. Not many organizations in India have got into this stage and less than 25% in the US are operating at this level. At the final stage of the maturity model, the CIO operates as a business partner. The value that the CIO provides is not restricted to cost savings and RoI. It extends to business planning and he begins to deliver services that drive competitive advantages. He gets replaced from being a infrastructure provider to being a irreplaceable business partner. The final destination is the boardroom. Few organizations are in this level of the maturity model.

HP OpenView believes that in today’s environment, the need for cost-control will force CIOs to change from being infrastructure providers to becoming service providers, and ultimately to business partners. The path to this transition is through service management. According to HP OpenView business unit vice president, Patty Azzarello, CIOs need to understand the new way to communicate the value that they bring to the enterprise. "Service management has gone mainstream and the RoI in service management is absolutely compelling," says Azzarello. In the view of HP OpenView, implementation of service management would mean that the IT department enters the business planning process and delivers services for competitive advantage.

Is the CIO supporting the business or is the CIO a business partner? To insurance-proof his career, he needs to ensure he moves up the maturity model and operates as a business partner and, in the process, gets into the boardroom.

EAM