“CIOs are missing the boat if they think running IT like a business will solve all their problems,” says Paul Strassmann, a 42-year veteran of corporate and government IT and author of The Squandered Computer.
That’s not to say that Strassmann doesn’t believe in the benefits of running IT like a business. After all, he did just that at Xerox, where he ran the company’s information services function as an operating division from 1971 through 1994. When he was appointed to an external task force by the U.S. secretary of defense in 1991 to evaluate the Department of Defense’s IT organization, Strassmann recommended recasting the Defense Information Services Agency as a business.
Issuing P&L statements, benchmarking unit costs and offering incentives for meeting performance goals, says Strassmann, can be critical steps in achieving IT efficiency. And that’s what CIOs must do if they plan to compete with external services providers. However, he cautions, “you can be efficient — but what happens if you’re doing all the wrong things efficiently? That can happen very easily.”
An obsession with running IT like a business could distract CIOs from technical operations, to their peril, Strassmann says. CIOs must focus on technical operations and “keep their nose to the grindstone. All the [business discipline] in the world won’t go far if the executive floor doesn’t get their paychecks [because of an IT mistake] or if the e-mail system goes down.” Success depends on maintaining a balance between the technical and the strategic.
In the end, it’s likely CIOs will continue to struggle, whether or not they run IT like a business, Strassmann concludes. CIO turnover was just as bad last year as it was in 1995, according to his research, and he doesn’t think businesslike IT will do much to increase CIO tenure. “The life expectancy of a CIO is still about 30 months. Everyone is struggling, without exception. The turmoil has not changed,” says Strassmann. “Sometimes the changes you make in the IT organization will work. And sometimes they won’t. There is no magic.”