IT managers at smaller firms lack clout

Research shows that IT managers at small businesses rarely make decisions about technology spending or strategy. Instead, managers of other business units are calling the shots.

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IT managers at smaller companies are mostly likely not involved in key technology buying decisions, according to a new survey. Instead, they've been relegated to researching technology for non-IT decision makers and implementing that technology.

Soon, many of them will find themselves with a new CIO as a boss.

They need someone who is going to be talking to the business and understanding this business.
Judy B. Homer
presidentJB Homer Associates Inc.
"If you're in a company that's growing, what might possibly happen is one day the CEO wakes up and realizes he needs to go out and hire someone to think strategically about IT," said Laurie Orlov, vice president and research director at Cambridge, Mass.-based Forrester Research Inc. "The person who was running IT, the next thing he knows, he has a new CIO for a boss."

In a survey of 4,000 small and medium businesses, London, Ontario-based Info-Tech Research Group Inc., found that the smaller a company is the less likely its IT managers are to be making spending decisions.

At companies with 40 or fewer employees, only 20% of IT managers had a say in such decisions. IT managers at companies with 41-100 employees made the call on technology decisions just 30% of the time. At firms with 101-200 employees the number climbed to 45%.

"If you're an ambitious manager and have aspirations of influencing the way the company is making decisions that impact the business, you're going to be frustrated working at a smaller company," said Ed Daugavietis, senior analyst at Info-Tech. "You're going to realize that you do all the investigative work on technology for a non-IT person to make a decision."

Daugavietis said ambitious IT managers at smaller companies will reach a point in their career when they want to do more than just carry out the directives of a non-IT manager.

"They will feel the need to be part of something a little bigger," Daugavietis said. "I think there are personalities who are quite happy to work at smaller companies. But the advice we're putting out is more to those who are looking to move up and are looking to have an impact on the business. I think if those people haven't realized it already, they should consider their future career potential working at very small firms."

Making the leap to something "a little bigger" will be a challenge. Often, junior IT managers at small companies "don't know what they need to know," Orlov said. "They're too focused on technology. They may not know the business of the company they're supporting."

Orlov said the small business IT manager should identify a senior executive within his company who can mentor him. The IT manager should make an effort to learn about the business he is working for.

"It would also help to get an MBA," she added.

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Plotting your way up the executive ranks
Judy B. Homer, president of New York City-based JB Homer Associates Inc., a national IT staffing firm that focuses on recruitment of CIOs and their director reports, said she is working with a $350-$400 million company that wants to leverage an infusion of venture capital to grow to a $1 billion company.

Homer's client, like most small companies, began with simpler IT needs. It had an IT director who implemented a basic infrastructure. But now that the company is poised for growth, it's looking for someone with strategic vision.

"In this company, they're about seven years old. They've only ever had this person who manages their infrastructure. Now they've engaged us to find them a vice president of MIS."

Homer said the existing IT director will probably end up reporting to the new vice president.

"They'll end up layering him. Not because he's not good, but simply because there's a different level of communication when dealing with a vice president of MIS. They need someone who is going to be talking to the business and understanding this business. It will be done in a positive manner. It's more the norm rather than the exception. This person [the existing IT director] is more of a technologist than a business person."

Homer said IT managers who find themselves with a new CIO for a boss have a good opportunity to learn. If the new CIO is a good business person, then the former head of IT has a chance to acquire business skills on top of his existing technical expertise.

Daugavietis said IT managers at small firms should always be demonstrating their value to the business side of the company. But ultimately, IT managers may need to move to a larger firm if they really want to make an impact on a business.

Orlov said moving to a larger firm will require taking a step back in order to take another step forward. Such IT professionals will have to find subordinate positions at larger companies where they can demonstrate their abilities as business people.

"The next job [the IT manger] is going to get is not CIO at a larger firm," Orlov said. "They have to get another job at the large firm, such as director of projects. It's good experience."

Let us know what you think about the story; email: Shamus McGillicuddy, News Writer

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