How Does a CIO earn $1M per year?

In today’s knowledge-based economy, the functions of the Chief Information Officer (CIO) are becoming increasingly complex and multi-dimensional. This complexity has resulted in high turn-over, leading to the nickname, Career Is Over.  In spite of this, some twenty-two CIOs/CTOs topped the $1 million annual compensation mark in 2010, according to Janco’s research. With this remuneration comes greater expectations.  These folks better be providing significant value to the business. How do executives contribute more than they already have?

Generally, working more hours is not an option.  This leaves working smarter. Thinking and acting more strategically will differentiate top tier managers from their less resourceful counterparts, allowing them to increase value. According to the research company Ovum, in their report from Dec 2011, “Big data analytics, security and cloud computing will be three of the most significant drivers of technological change in 2012.” It also predicts “that CIOs will become major enablers of innovation for the business, playing a central role in operational & commercial strategy.”

Sounds wonderful, but IT departments are undergoing yet another massive upheaval, led by cloud computing, social media, and IT consumerisation. Terms like BYOD or BYOS (Bring Your Own Devise/Software) are commonplace as the personal computer gives way to personal mobile devices like smart phones and pads.  These trends, coupled with the proliferation of social media, bring instant transparency and creates a new level of user demands with new security issues. Managing through these changes while delivering is a tall order.

This month’s letter will give some tips to help you lead and navigate your organization into the next decade:

  1. Decisions – Be decisive:

Making snap decisions can be more cost effective than taking significant time to evaluate all aspects of a decision. The issue of decision-making is being considered on a much wider level than by only productivity gurus. The New York Times posted a column from John Tierney on their website titled “The Price of Dithering.” Dithering really can be quite expensive. An inability to move forward on a decision or project has a hidden opportunity cost that does not appear on an income statement. In addition, the financial upkeep required to have your team ready to spring into action once a decision has been made is high. Avoiding these price tags is a matter of improving your ability to make rapid fire decisions and move on. Taking 6 months to save the company 10% on the cost of a project could cost twice in unseen costs  than it saves.

2. Communications – Be direct

Use clear, concise, and complete communication with your staff and customers.  By implementing direct communication with management of large companies, you can recover an additional 13 percent of their time (spent on planning or other high value activities). Such strategic thinking builds innovative businesses with increased profitability, happy employees and satisfied customers. Ensure your communications have sufficient context to assist your team in understanding decisions and rationalize initiatives.

3. Simplicity – Less is more

Theoretical scientists spend their lives looking for simple answers or solutions. The reason is complexity is difficult to recreate. Take a recipe, the easiest and quickest are the recipes you will use most often. Business processes are the same.  Humans are inherently lazy and will seek the path of least resistance.  Simple solutions will always be more appealing than highly complex ones, even if the simple one is not quite as good. It is often more difficult to design simple processes initially, but it has the biggest pay-off and highest adoption rate.

4. Plan for the future.

This seems self-evident, but so many fall pray to the feeling that they do not have enough time to create a plan. By creating a road map of where you want to take your organization, you significantly increase the odds of actually getting there. Without planning, managers fail to make effective decisions, which leads to chaos and inefficiency.  By having a plan in place, you make decisions faster  and can choose or select components based on whether they align with the intended direction you want to take your organization.

Many things are changing around us and we are entering new phase: cloud and mobile are the keys to this evolution.  Yet many things remain universal.  All humans desire subsistence, protection, affection, understanding, participation, leisure, creation, identity and freedom. Great managers seek to provide these to their team even during the greatest technological changes.

Do You Have Too Many Nodes in Your Network?

You came in to work this morning and answered emails, tweets, voicemails, messages, updates, check-ins, texts, questions, phone calls, pins, shout-outs, uploads, appointments, posts, and shares.  You get the point. But are you really connecting with anyone? Would it be more effective to spend that time with someone at a coffee shop or connecting with coworkers in the lunch room?  Social Media has made it easy to attach yourself to people; but is there any value in these interactions? Are you a Broadcaster or a Networker? Broadcasters are people who simply send information out; networkers are those who actually interact and communicate on an individual or group basis with their connections.  Ask yourself which achieves your goal.

I’m a big supporter of social media both personally and professionally, but it only works if you know why you are there, have a plan, and are honest with yourself and your connections about why you are there.  With this in mind, how many connections can you really manage?

Facebook, Twitter, Yahoo, LinkedIn and Google+: These 5 organizations occupy 90% of the Social Media landscape.  How many are you registered with? How many connections do you have if you add them up? Think about this list:

  • Facebook – 100 friends
  • Twitter – 150 followers
  • LinkedIn – 300 connections

If you take these and factor a 30% overlap, you are still left with over 385 unique connections. Manageable, but you see people with 12,000 followers, 500+ connections (which can mean 800, 1000 or more) and 300 friends. How does one have a relationship with that many people?  How deep is their relationship with them? What do they know about them?  Do they know where they live, their phone number, or their hair colour?

Social Media is still a new experiment and no one really knows where it is going.  It is an international phenomenon due to the advent of the World Wide Web.  Prior to the internet, Robin Dunbar, an anthropologist from England, theorized there was a limit to the size of a social group based on the size of a creature’s neo-cortex. When applied to humans he arrived at a number, 150 individuals, which was coined “Dunbar’s Number”, the theoretical cognitive limit to the number of people with whom one can maintain a stable social relationship. In 2011, Goncalves, Perra & Vespignani (random scientists) applied this to Twitter. Their findings confirmed this theory: users can entertain only a maximum of 200 stable relationships.  A company called Path is using this number to build their social media network, limiting the number of connections one can have. If you have 150 connections, you must lose 1 to add 1.

Keeping your contacts between 100 and 200 may seem impossible. Unfriending on FB is still frowned upon in spite of the best efforts of Jimmy Kimmel (the “Unfriend Day”). People randomly follow you on Twitter & try to connect via LinkedIn.

Well, what is a person to do? Managing your connections appropriately means having a social media plan and sticking to it. This will determine where you will focus your time and who your connections should be.

Here are 7 tips on managing social media:

  1. Don’t join everything.
  2. Drop people who have dormant accounts. (Don’t follow someone on twitter who hasn’t tweeted in 6 months)
  3. Figure out what you want from social media. (Are you broadcaster or a networker?)
  4. Fix the amount of time spent and stick to it. (e.g. an hour a day and no more)
  5. Cross-pollinate your social media sites and manage multiple accounts with one action using social media dashboards such as HootSuite (e.g. your tweets get posted on your FB Wall).
  6. Have a content plan. (What information would your audience want to hear – add value, not what you had for lunch)
  7. Review the ROI of your social media foot print every 2-3 months.

The number of connections you want to maintain, be it 100 or 1000, depends on what social media plans you develop and the type of social user you wish to be.

7 Ways To Trim Your IT Budget

The press loves to report on train wrecks , the European debt crisis being no exception. Pick-up a newspaper, and every money commentator and business program you listen to has the overwhelming message of doom and gloom in Europe.  Yet in Canada, specifically within IT, employment is stable. We see our unemployment rates inch upward only because more people are looking for work. Despite some signs of weakness in the overall job market, the IT sector is still a huge bright spot with unemployment at only 2.9%.  When you factor in the natural unemployment rate (those involved in job transitions) we are actually at a point of over-employment. (Economists often say the natural rate of unemployment should be no less than 4%). So what does a Manager do?  Some will push on with the status quo, others fight for talent, and some simply hunker down and wait for the storm to blow over.

The right answer probably lies somewhere in between. For those who are looking for ways to cut IT expenditure, we have come up with some ideas to achieve this:

#1: Delay Unnecessary Upgrades

Many organizations get in the habit of automatically upgrading to the latest version of software and hardware as soon as it is released. This strategy is an expensive one.  How many new features do your user groups really need or ultimately use?  In addition, if you are first to implement an upgrade or service pack, you should rethink that strategy since being an early adopter means you are the trail blazer for hitting bugs and issues first. These problems will be fixed, but at your expense.

#2: Review Old Vendor Pricing         

Vendors continuously review and change pricing models and plan. When new features or services are announced, many companies add these on to their customers’ existing plans – this can end up being more costly. Changing your billing structure to bundle services and features together may dramatically reduce costs, a notorious practice of Cell companies.  Also, vendors you have worked with for years may not be giving you their best price. New vendors may offer more aggressive pricing to get your business. So ask your existing vendors about new pricing options.

#3: Consider Selective Deployment of Open Source Software

Open Source software is often available free of charge, although it may come without warranties, formal training programs, or technical support and updates may or may not occur.

That being said, Open Source has a place in every organization if deployed carefully and selectively. Open Source server software could be appropriate for certain dedicated servers if you have the people with this expertise. Use the talents of your employees to save money. Another example is the use of Open Office.  This is a great option instead of using MS Office as this solution is compatible with most file formats of commercial applications. Some users like this. Especially those who only need to create documents occasionally, and therefore do not require the advanced features offered in other commercial programs. This could be the right solution.

A careful assessment of where Open Source software can and can’t be deployed in your organization without undue disruption can help you create a cost saving integration.

#4: Have Fewer, Smarter Meetings

Have you ever tried to estimate the cost per-hour of your meetings? Add up your hourly rate, that of the 3 consultants, 2 staff, the Project Manager, a few users and other IT people all attending. It could easily add up to $1,000 to $2,000 per hour. If you have 12 such meetings a month, this could cost over half a million dollars a year to your organization.

See our May 2011 CIO letter,, where we discussed ways to run better and more efficient meetings.

#5: Look At Different Training Strategies

Training is often one of the first items suffering from budget cutbacks, but arbitrarily slashing all training dollars can end up costing the company more in the long run. Training is necessary for IT personnel to keep current on the technologies they deploy and administer; minimizing mistakes resulting in expensive downtime or even loss of critical data.

Rather than sending staff to exotic locations for conferences and training, look into local alternatives. Consider starting a local user group. Then have trainers come to your city to train the group. Hire local consultants to provide one-on-one training. Build a structure where senior staff trains junior members or organize Lunch-n-Learns as a great forum for training.

#6: Outsource Some Services

Outsourcing is a sensitive subject. Many people hear the word and think only of personnel cuts and jobs going to foreign shores. But judicious outsourcing can allow you to utilize the personnel you have more efficiently towards better cost effectiveness running your IT operation, minimizing the risks of entrusting your data to people half a world away.

For example, as your business grows and your need for more servers expands, you might find that it’s less expensive and less of a hassle to use a hosting service for your Web servers or E-mail, rather than buying more hardware and hiring more personnel. As with other money-saving measures, this is not a one-size-fits-all solution. First assess your specific needs, compare prices, and do a cost/benefits analysis to determine whether outsourcing really is the most cost effective option in both the short and long run.

#7: Consider Short-Term Contractors

Not to be too self serving, but contractors are a way to manage budgets. Many companies use large integration companies for large projects on fixed bids. This makes sense as they can deliver cost savings with flexibility. The problem with this approach is that the goal of integrators is to inject more of their own staff to work as Time & Materials contractors in your organization. Rather than just servicing the major projects they were brought on board for under a fixed bid, the integrator’s staff ends up working on smaller projects or one-offs on an hourly rate. Clearly this ends up costing far more than original cost savings projections.

To optimize your budget, use integrators only for fixed bids, and call on Resourcing Firms to provide resources for Time & Materials (this is typically half the rate of the hourly costs the large integrators will charge). Another secret your Integrator does not tell you is the T&M resources they are providing are often double marketed up as the Integrators turn to Resourcing Firms to fill short term roles. Going directly to Resourcing Firms will cut out this extra cost. We recommend reviewing the resources currently on-site from your Integrator and talking to a Resourcing Firm (i.e. Ignite).

There are no easy ways to trim a budget. It is easier to spend money than save it. Finding a 10% reduction in your budget will probably require some effort, but the impact of this effort to the health of your business could be immeasurable. Seek help.  Ask your staff what they would do if they had to cut 10% from company’s costs. You may be surprised at the ideas that appear.

The Ignite Dodgeball Team: “The Dodge Fathers” took the court in Richmond this weekend in grand fashion. Although, more practice maybe in order. Great job everyone!


The Future of IT Jobs

There are many changes coming with new technologies. Here are some things ahead: