It’s been a long time between posts because of a process known as 2006 strategic planning, which at my company is a grueling analysis of the year’s results and likely progress in the next year. It’s an important and worthwhile exercise but it saps a lot of time.
There’s no question that CIOs are critical influencers in IT buying but you have to put their role in perspective. Most large organizations have IT budgets in the millions of dollars. At the very biggest, that number can be over a billion dollars. The CIO’s role in these companies is to align IT with business strategy: know where the organization is going and how technology can support those goals. This business focus is becoming more and more critical to the CIO role. As it should. CIOs have less and less time to concern themselves with the specific vendors and products.
Product selection is increasingly being delegated to the lower levels of the organization. This only makes sense in markets that are competitive and in which the core feature sets of most products are similar. Technology selection has become an increasingly complex process because choices are made based on nuances such as vertical market features, support, price and vendor viability.
In a typical IT organization, the CIO is responsible for setting strategic direction, managing a budget, identifying approved vendors and signing off on purchase decisions. However, the process of researching and identifying the vendors who will provide new products and services is largely delegated to the people who will work with those products and vendors. IT is becoming more specialized, which means that the specialists are the ones who make the most critical decisions. They decide which products and vendors to recommend to the CIO and it is their reasoning and research that most influences a selection. CIOs don’t have the time or expertise to dig into these questions. In fact, smart CIOs know that if they did try to micro-manage every decision, they would make worse choices because they don’t know as much about the market or technology as the people below them.
That’s why nearly every CIO I’ve spoken to has said that hiring good people is one of his/her biggest challenges. The CIO’s job is too big and complex not to require good delegating skills.
CIOs do play a critical role in signing off on the purchase which is where visibility and relationships come in. It’s important that these executives be familiar and comfortable with the vendors they align themselves with. That’s where brand advertising works.
But vendors who just target the CIO are missing critical influencers. The people lower in the food chain are the ones most likely to decide who gets on the short list. Few marketers get this. Savvy IT organizations go through a rigorous process of identifying needs, researching suppliers and products, developing a “short list” and choosing strategic partners. The CIO is usually involved at the beginning and end of this cycle, but rarely in the middle.
And where the technology is “disruptive” the CIO’s role is even smaller. In fact, nearly every truly game-changing technology that has emerged in the enterprise landscape going back to minicomputers was brought in the back door of the organization. Think of it: the CIO’s role is to maintain stability and reliability. He/she is rarely going to stir the waters with disruptive change. Technologies like PCs, cell phones, PDAs, file servers, the Internet and open source software have been successful because risk-takers at the low levels of the organization adopted them and proved their viability. Microsoft and Dell were successful in the early days because they targeted PC managers, not CIOs.
I’ll post more on this as we wrap up a research study about the IT buying process.