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Gartner outlines new CIO reporting strategy

It's called the Office of the CIO -- and it's a new strategy for giving CIOs organizational clout.

The successful CIO uses technology to bring value to the business. That's the mantra. The ever-increasing technical...

complexity of the job and the grinding task at hand -- providing real data in real time -- leave little time to think strategically. What's a CIO to do?

Gartner analyst Pam McGillis is finding that an increasing number of companies are opting to create an Office of the CIO -- a broad-based, collaborative group that in addition to technology experts includes colleagues from finance, human resources and sometimes outside consultants.

Management approaches that CIOs have taken in the past to solve problems or address companywide initiatives often come with built-in limitations or liabilities, said McGillis, who presented her findings at Gartner's Symposium/ITxpo conference in San Francisco this week.

For example, an executive committee brings business smarts, but often lacks the technical expertise to make informed decisions. A committee of direct reports brings the technical knowledge, but does not allow for open discussion. The chief technology officer -- a natural ally -- focuses on operations, not the business. Think tanks offer subject matter expertise, but the advice is not always practical. A task force, usually formed to address a specific issue, is temporary in nature.

Have you ever seen seven-year-olds playing soccer? Everyone is running around the ball.

Bill Packer, CIO, Irwin Home Equity

The Office of the CIO increases the CIO's capacity to engage business leaders, focuses greater attention on IT delivery, can expand the resources dedicated to compliance and gets buy-in for IT policies and architecture across business units.

The structure can work as a recruiting tool, said McGillis, by offering young people an opportunity to participate in top-level decisions, as well as help in succession planning, by bringing leaders into the fold.

Building a CIO Office

Tapping the right people to participate makes the difference, she said. The CIO should look for people who have a professional manner, are trusted and respected by their peers, are open to ideas, are willing to learn and have a business-wide perspective.

Team members should be encouraged to become expert in a subject, such as architecture, the Sarbanes-Oxley Act and business processes.

The approach was met by some skepticism from the audience, judging by the questions. One attendee wanted to know what the difference was between the Office of the CIO and current governance models. Another audience member said he already spends 50% of his time with other C-level executives and was doubtful he needed to make time for one more group.

Bill Packer, CIO of Irwin Home Equity in San Ramon, Calif., a $2.2 billion subsidiary of Irwin Financial Corp., adopted the approach when he joined Irwin in 2000. The company faced many of the infrastructure challenges of the midsized company, including an "immature process environment," Packer said.

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"Have you ever seen seven-year-olds playing soccer? Everyone is running around the ball. I'd have techs who'd think nothing of bringing down a server in the middle of the day to add a patch," Packer said.

The 50-person IT department was also very flat, with 14 managers all reporting to the CIO. Irwin replaced it with two layers with four reporting directors. He then decided he needed to go beyond the traditional IT team and bring in people from finance and human resources. "We're a highly regulated business and IT needed more visibility," Packer said.

Packer said he'd be hard-pressed to quote a metric on what the office has done for IT. "For me, the office allows people to interact at the peer level, exercise some muscle, build competencies, engage in debates about IT and expand my perspective," he said.

It also functions as an insurance policy. "If the CEO picks up the phone and calls anyone in that office, their response is in alignment with me."

Asked to give an example of a recent problem his group tackled, Packer cited a company proposal to expand hours of operation to include weekends, a decision that greatly affected IT and required a plan of action. The proposal was made when Packer was traveling. The Office of the CIO met in his absence and came up with three options for Packer to preview.

McGillis said the Office of the CIO typically follows one of four models, ranging from semi-formal groups, like the one at Irwin Home Equity, which meet to address specific issues and may even disband when the problem is worked out, to a "directional" model, such as the one used by Toyota Motor Sales, which can act on behalf of the CIO and can include as many as 30 people.

The Office of the CIO approach brings its own risks and potential disadvantages, McGillis warned. At smaller companies, members must avoid being seen as CIO "pets." CIOs at large companies need to guard against administrative overhead and friction between members of the Office of CIO and IT executives.

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