CIO as Contract Manager

Hyperconsolidation won’t help the CIO role, either. Reducing CIOs’ strategic options makes CIOs less strategic and more like vendor managers. Vendor consolidation will pull power and strategic control away from the CIO and make the role seem less defensible to skeptics inside the company. With fewer vendors taking over bigger pieces of the IT infrastructure?and outsourcers vying for the rest?strategic knowledge and future technology planning will increasingly reside outside the company. CEOs and CFOs may wonder why they can’t simply meet with the few remaining vendors themselves instead of having a CIO do it for them. And any arguments that CIOs make about maintaining multiple vendor relationships to avoid lock-in will fall on deaf ears. Without universal integration technologies to open up software to true price competition, what’s the difference between paying steadily rising fees to separate vendors or simply giving it all to a services company?

In this kind of environment, open source will be the only economic weapon CIOs have for keeping the lid on big vendor prices and contract terms. CIOs should set aside portions of their budgets to fund open-source pilot projects inside their companies if for no other reason than to create a negotiation tool to hold over the vendors’ heads. CIOs who invest the time and money necessary to assemble low-cost open-source alternatives to enterprise software packages could win back the hearts of skeptical CFOs and CEOs. It will be a long, slow process that stretches well beyond 2010, but top CIOs will no longer be unaware of how much open-source software they have in their infrastructure. Open source will move from bottom-up to top-down.

Indeed, by 2010, the strategy that will differentiate top CIOs from their more tactical peers will be one that focuses on a vendor-neutral architecture and less vendor reliance?not more. It will be a difficult task, but CIOs who focus on creating an infrastructure that is low cost, easily maintained and doesn’t rely on a handful of vendors to function will have the upper hand in price negotiations with vendors and the ability to adopt innovative new solutions more quickly and easily than those CIOs who are locked in to a vendor’s software release schedule. CIOs who merely pick vendors from a list will have a more appropriate title: contract manager.

Scenario Two Open Source Slays Goliath

By 2010, European and Asian governments will lead the way toward the adoption of open-source software, and American CIOs happily climb aboard