A Typical CIOs Business Process
A typical CIO's business process
A typical end-to-end business process for a CIO might take the form of the following five steps:
Step No. 1: Negotiate overall IT budgets with the CEO and CFO.
Step No. 2: Decide how much of the budget to allocate to existing applications and infrastructure (much of it would have been previously committed anyway).
Step No. 3: Negotiate with business units to decide which of their business needs will get supported by new applications. In this step, there may even be a high-powered IT strategy council to deal with.
Step No. 4: Search for new vendors, vet any new vendors the business units may recommend, and issue contracts and statements of work (SOW) to selected vendors.
Step No. 5: Put in place strong project management to manage the vendors and their development and integration efforts, while ensuring minimum disruption to the existing infrastructure, the company's governance processes and other business units' applications.
All the time, keep interfacing with the business units to understand their changing needs and ensure they get the support they need. Until the next budget cycle, this happy state of affairs, we believe, is about to end.
What has changed?
For a start, there is no annual budget to spend. CEOs have authorized their CFOs to cut all budgets by 40 percent and make them flexible as well (that is, manage them on a monthly, not annual basis). "Do More with Less" is the watchword. It must be noted that is not pure cost cutting in the conventional sense that we are seeing now; there is also a much higher aversion to risk and much greater unwillingness to forecast too far out into an unknown future. What should the CIO do? The solution:
1. Line up all your vendors and offer them a new contract: monthly billing, pay-for-use only and 40 percent reduction overall. Will they bite?
2. One or two large vendors will be interested if the entire IT pie is made available and if they are given flexibility regarding how they will offer the IT service.