The well-balanced CIO

Dr. Doron Cohen is sure he will never be a CIO again.

Not that the CIO role has been unkind to Cohen’s career. With several top IT roles in a variety of industries under his belt, he now owns his own company, The BrassTacks CIO, and advises companies on how to get the business results they want using the appropriate technology strategy.

But no matter where he’s been or who he’s now talking to, his message is always the same: “Every (IT) decision that you make has to be in support of an identifiable business outcome.”

Cohen, who hails from Israel, was sent off by the Israeli army to study electrical engineering at the Technion-Israel Institute of Technology. After graduating he started his career as a computer engineer for the army. After earning his M. Sc in control systems from Technion, he moved to Canada to work with Northern Electric R&D organizations (now Bell Northern Research).

One of the first people to graduate with a Ph. D in computer science from the University of Waterloo, Cohen said he “remained an academic for a few years,” and after a stint at Alcan in Montreal, became the director of computing services at the University of Toronto. “Then I decided one morning that I have to go back to real life.”

Cohen recalls that it was 20 years ago when he became a CIO for the first time. His first position was with Kidd Creek Mines, a mining company in northern Ontario that was eventually bought out by Falconbridge. In June of 1986 he jumped over to Calgary-based energy firm TransCanada Pipelines (TCPL) to become the firm’s director of information systems.

And then the changes started taking place. Before 1986, TCPL had 16 customers and produced about 35 invoices a month, so its IT department was very centralized. But with the deregulation of the gas industry, TCPL turned into an open pipeline system, created a separate company for its marketing operations, and suddenly found itself dealing with hundreds of invoices and several contracts each month. The centralized model just wouldn’t cut it anymore.

It was a problem many CIOs were familiar with, Cohen recalled. “In the 80s they were very successful at running very efficient centralized technology departments, revolving around mainframes, and they believed that’s where their success story was. But all of a sudden the company’s needs changed, and if they kept preaching the same thing, they would find themselves out of synch” with rest of the organization’s needs.

Cohen could have forced the pendulum to swing to the fully decentralized side by creating distributed “mini” departments across TCPL, each with its own tech guru.

Instead, he came up with the idea of designating small groups within the IS department, called Functional Systems Teams, to take care of the IT needs of different groups of departments, referred to as Company Functional Units, responsible for segments of the company’s data. Another group within IS, Shared Resources, was also put in place for functions like help desk, data management and desktop technology and training, where it didn’t make sense to duplicate efforts.

This hybrid model allowed for the IT department to be centralized enough to test systems and make them work well, while at the same decentralized enough to focus on the unique needs of the company’s different departments.

According to Cohen, the idea for the hybrid IT organization caught on with analysts and consultants after he parted ways with TCPL in 1998 to spend two years with analyst firm Gartner Group in Stamford, Conn. “I didn’t say CIOs paid attention to it, but there was lot of ink and a lot of consulting money made” spreading around the idea, he said. “This model was reasonably new at the time and it was documented by Gartner Group . . . It got huge media coverage.”

Analysts devised different terms like affiliated, federated or confederated to describe variations of the model.

Cohen said his time at Gartner allowed him to step back and watch how organizations in industries other than energy balanced their centralized and decentralized IT needs. And he realized is that some CIOs were still not getting the real message behind the model.

“What caught on was the lingo of the organizational structure, but the main message, the business outcome part, was not always communicated and accepted,” he explained. “The driving point was often still missed: that is, you don’t just do it the way you feel like; it has to be directly linked to company’s strategic drives.”

Although the model got a lot of attention from Gartner, becoming “the norm,” Cohen brushes the original idea off as old news for today’s CIO. Even after leaving Gartner and joining Canada Life as the insurance firm’s CIO in 2001, Cohen said his original model of 1995 has evolved according to company expectations from IT and what strategies underlie it.

He said CIOs need an IT model that is flexible and recognizes diversity, allowing for a shifting balance between centralization and decentralization according to the needs of the business at the time.

“Any attempt to implement a uniform set of technological and behavioural rules would be doomed to failure because it doesn’t recognize that the business strategy of different business units is different . . . . Anyone who sits on a success story from 1995 might as well go to a senior citizen’s home.”

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