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Phil Wainewright

SaaS and Cloud Forging a New Role for CIOs

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One of the myths surrounding software as a service is the notion that SaaS makes the CIO redundant. While it's true that businesses replacing on-premise applications with SaaS equivalents will have less in-house infrastructure to maintain, their IT staff still have an important role to play in managing the external resources. In most cases, they will find they not only still have jobs, their work will be more rewarding. Instead of spending their time fighting fires and keeping the infrastructure running, they can turn their attention to enhancing the applications and helping end users achieve a better fit to business needs.

A recent blog post by former CIO George Tomko has a title that neatly encapsulates this change: CIOs as Brokers, not Controllers.

"... a CIO is a broker of business solutions that involve cross functional process stewardship and a provider of a technology and infrastructure framework," he writes. "... Any attempt to be controlling, withholding, short-sighted or locked-in will simply generate powerful incentives for the organization to go it alone, underground, in any number of ways. CIOs that fail to migrate from IT czar style CIO to chief impact officer style CIO will find themselves moved out, passed over or [demoted]."

I've started talking about this shift as a change to a 'custodian' role — a similar sentiment to Tomko's use of the word 'stewardship'. The CIO is still responsible for the computing the organization relies on, but instead of actually being hands-on, he or she now sets the parameters within which external providers operate, and monitors their compliance with those requirements.

Here's another take on this from a discussion panel at last week's CIO Symposium at MIT, as reported by blogger Michael Krigsman. Discussing business-IT alignment, panelist Jim Champy, chairman of consulting for Perot Systems, made this observation:

"CIOs should participate in innovation around the company's business model, which goes beyond contributions just to product, services, and operations. Managing infrastructure is worthless if the business fails."

A parallel that recently occurred to me is the transformation of what used to be called transport managers into vice-presidents of logistics. If you want to carry on working in the truck depot, owning your own transport fleet, then fine. But the world has moved on, and most organizations outsource deliveries to FedEx, UPS and other external providers — because it's vastly more efficient and flexible. CIOs should prepare for SaaS and cloud to engineer a similar transformation of IT.

4 Comments

This is very true. Many of our CIO customers strongly express this benefit of SaaS. As one CIO of a law firm with 200 people stated: "In the past our group in IT spent most of our time supporting our former DMS and not focusing on the people. The most significant thing about NetDocuments [SaaS app] and the change it has done for us in IT is that we now support the people and no longer need to support the product that the people use."

Phil, first of all, I appreciate the reference to my blog post at http://www.ciorant.com. Weaving those thoughts into the discussion of SaaS and, by reference, other technologies like virtualization, cloud computing, social media, etc. is important because the drivers of any CIO role-changes need to be understood in their proper context. Any CIO worth his/her salt should yell "Bravo!" to these advances because they are full-blown disruptive technologies. If they are done right (and that is certainly up-in-the-air) they will be liberating, much like the case you mention in logistics.

Very interesting points, Phil. I hadn't realized to look at it that way, but it's very true. With SaaS, there's still a need for an IT department and CIO. Only, their role changes from reactive (dealing with problems/issues) to proactive (educating & training end users). CIO's need not be short-sighted on this, and embrace the beneficial change in technology.

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Very interesting comment by Leonard. IT departments now will support the people that use the products rather than the products themselves.
We may now need to hire some IT guys with some personality.

Phil Wainewright blogs about how businesses are using the Web to get better plugged into today's fast-moving, digital economy.

Phil Wainewright

Phil Wainewright specializes in on-demand services View more

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