CIOs told to scrap enterprise IT departments

CIOs should move beyond the concept of “alignment” with business and break up the IT department into pieces that can be assigned to every other part of the enterprise, according to the author of a new book on technology management.

Peter Hinssen, chairman of consulting firm Porthus in Belgium and a teacher at the London School of Business, was the keynote speaker at an invitation-only event for Canadian CIOs hosted by software vendor CA Inc. late last week. His book is called Business/IT Fusion: How to Transform IT in Your Organization, and the fusion referred to the idea of much tighter, more natural integration of CIOs within the rest of the organization.

“What happens when you have alignment, is that IT is transformed to a perfect, executing, order-taking butler,” he said. “In a marriage, that’s not what you want. You want someone who will challenge you.”

Hinssen said he derived his outlook in part on companies like Proctor + Gamble, whose CIO, Filippo Passerini, inherited an IT staff of 7,000 people when he first joined the firm. “He took all these 7,000 people into a room and said he was going to outsource 5,000 of the ones whose roles didn’t add any core value,” Hinssen said. “Then he took the remaining 2,000 and said he was going to scrap the IT department.”

As a result of dispersing IT staff to areas like marketing, finance and so on, Procter + Gamble has turned working in IT as something looked down upon into a stepping-stone to corporate success, Hinssen said. This is a lesson for other CIOs. “You have to blend in, fuse and take over when necessary.”

A CA executive at the event endorsed Hinssen’s views. “Alignment is a horrible word because it’s a term that suggests IT and business are two different parts that need to be aligned,” said Ajei Gopal, the firm’s executive vice-president of technology products. “It’s something that’s core to the business. They are fundamentally intertwined.”

Hinssen took the Canadian CIOs through his own tongue-in-cheek history of IT management executives. This included the “Nerdus Academicus” in the 1960s who worked with calculators like the HP35, the “Nerdus Micronicus” who used the first microcomputers and the more recent “Nerdus Economicus” who are focused on return on investment and yield. Unless they change their ways, however, Hinssen said we might see the emergence of a new archetype: the “Nerdus Extinctus.”

“We tend to have people who are the ideal craftsman – people who say, ‘I’m a DBA,’ and that’s all they do,” he said. “We need more merchants than craftsmen.”

While this transition won’t be easy, Hinssen said there are examples of people in other roles in the enterprise which have successfully managed to do the same thing.

“CFOs used to just be the bean-counters. The CFO has transformed from someone operating at the side to a core activity,” he pointed out. “The CIOs have to do the same thing. It’s obvious for them to work together.”

Successful CIOs will also begin spending more of their time focusing on allocating resources and less on cost-cutting, he said.