The campaign was designed to create the impression -- in the minds of the CEO, CFO and select members of the utility's board of directors -- that the CIO had made the wrong choice. At this point, the CIO realized that she and her software vendor had a different definition of the word partner.
This story ended well, however. Unlike many CIOs, this one had invested time in building good personal relationships with a broad constituency of business colleagues, so the vendor's effort to outflank her backfired. The other company executives were so incensed by the vendor's shabby behavior, in fact, that they're considering dumping this supplier for another and have considerably slowed down the product rollout.
Political threat is only one of several significant risks -- financial, operational and technical -- that enterprise software carries for top IT executives. As Vince Campitelli, senior vice president and chief IT auditor at Charlotte, N.C.-based Wachovia Corp., puts it: "Software equals risk. It is
To answer that question -- and several others pertaining to the future of software -- we surveyed some 300 CIOs, industry observers, vendors, CEOs, scholars and business executives for this special CIO Habitat Report (see "Survey Methodology"). In follow-up phone interviews with 100 of our respondents, we spoke in depth to both alpha-IT practitioners (leading-edge users) and senior business executives.
What emerged is a complex, multidimensional picture of where software is headed. It's not a comforting scenario. Extracting full value from software investments calls for discipline, professionalism and engagement on the part of the business community. Unfortunately, few companies take that approach.
"I have seen many companies running mission-critical operations with linked Excel sheets," says Norm Happ, a senior strategist at Kansas City, Mo.-based H&R Block and one of our respondents. "The decision to do so was based on the seductively low purchase price of the software. Executives at small to midsized companies rarely think about the thousands of hours they will spend trying to keep a web of Excel spreadsheets properly linked."
Many companies we surveyed are still struggling with how to bring their shadow IT organizations -- those business units making unauthorized IT purchases -- under control. This is especially critical now because these departments can place the organization at serious security and compliance risk. Wyly Wade, director of technology at San Diego-based General Land Corp., puts it this way: "Letting unauthorized software on your network is like leaving the keys in your car with a bag full of cash on the passenger seat in downtown Miami."
Our research reflected certain universal truths about software. Foremost among them was that the passive will be punished, and the aggressive rewarded.
The organizations extracting the greatest value from their software investments realized superior returns because they were active participants in the process. They were active in telling the vendor exactly what they wanted, and in setting the terms and conditions associated with payment. They were also active in mobilizing the business community to make sure the software, once deployed, actually changed workplace behaviors and processes.
Our CIO Habitat dwellers also made it clear they think the existing software development model is broken. The process by which commercial software is developed, marketed and deployed takes too long, carries undermanaged risk and costs too much. Our respondents know that as buyers, they have real choices now. IT decision makers, particularly those in the midmarket, are aggressively looking for alternatives to the status quo.
This was first published in March 2005