The worst day in Joe Eng’s career was the day he told his CEO that his company’s most important IT project—a $500 million, state-of-the-art global network that is among this decade’s most important IT initiatives in the financial services industry—would be three months late.

Eng is CIO of the Society for Worldwide Interbank Financial Telecommunication (Swift), a financial industry-owned cooperative that supplies messaging services and software that most of the world’s banks use to send trillions of dollars in financial transactions daily. In February 2003, Eng and his team were testing the backbone of SwiftNet, the new network. With only a week before the two-year rollout of SwiftNet was scheduled to begin, the network monitoring software was not working reliably. Fixing the problem would take a few months. Eng’s boss, Swift CEO Leonard Schrank, had to know.

And so Eng called Schrank at headquarters in Brussels with the bad news. Schrank was incensed. The last time Swift replaced its network, in the 1980s, the project was years late, and Swift’s banking customers hadn’t forgotten. What would they think now?

"The problem had a very visible repercussion," Schrank says. "This was like delaying a space shuttle launch, with all the political pressures." Eng endured Schrank’s grilling.

But the pain was short-lived. By the end of the 10-minute call, Eng had explained the problem, offered a solution and reset Schrank’s expectations for when SwiftNet would be ready. He would do the same thing a few weeks later, when he was called on to repeat the story to Swift’s board of directors. Three months later, with SwiftNet fixed, the rollout began, just as Eng had promised.

Eng’s encounter with Schrank may have been his most difficult moment, but there were many instances during the six-year project when Eng had to define—and then redefine—what he would deliver and when. For many CIOs, their toughest challenge is managing the expectations of senior executives, end users, IT staff and employees across the company, and the failure to address constituents’ expectations undermines CIOs’ credibility. In fact, expectations management can define whether or not your IT department is successful. ("Managing expectations" is one of five must-do items identified by CIO’s editors as part of the Leadership Agenda 2005 series.)

In Eng’s case, Swift IT staff, business leaders and its 7,800 shareholders (who are also Swift’s customers) all had their own ideas about what SwiftNet should be. Eng couldn’t possibly accommodate everyone’s demands, or predict every problem that might crop up.