While more and more IT professionals are aspiring to positions as chief information officer (CIO), a growing number are questioning whether the much greater risk is worth the elevated status and pay packet.
A major report produced by Mercury and the Economist Intelligence Unit of the Economist Group recently found that increasingly CIOs were blamed when IT systems failed disastrously, despite the fact that many of them were not included in the decision-making processes to rectify problems which were often glaringly obvious to IT professionals.
Annelize van Rensburg, a partner with the leading executive search firm Leaders Unlimited Korn/Ferry International, said prospective CIOs are increasingly demanding a decision-making role in line with the responsibility they are having to shoulder.
Companies themselves are also becoming more fearful of the disastrous consequences of major IT failures, Van Rensburg said.
"Many of the fears that the report has identified among its sample group, coincide exactly with fears among our own client base. The first and most important fear is the loss of revenue and secondly customer defection in the event of a major IT disaster. Another major risk is damage to the brand - the holy grail of most modern companies. Vulnerabilities in the logistics and supply chain management and how a failure in this area would negatively impact on the bottom line is also high on the list while security vulnerabilities are the newcomer to the list," Van Rensburg said.
She said that increasingly CIOs are demanding that they be given the power to directly intervene in the event that problems within the IT infrastructure are identified but often these calls are ignored by the CEO and the board.
Recently there have been several instances where IT departments failed miserably, despite the fact that CIOs gave ample warning that changes had to be considered and implemented.
"AT&T Wireless (now part of Cingular) lost an estimated US$100 million in 2003 and 2004 when an upgrade in its customer relations management (CRM) system failed. In another unfortunate event in the United Kingdom, the Inland Revenue Service overpaid tax-credits to the amount of US$3.5 billion," the report said.
"The US airline Comair (no relation to the South African airline of the same name), lost US$20 million in cash when an old Fortran-based system that was used to schedule its flight crews went belly-up and resulted in hundreds of flights being cancelled and its reputation badly damaged, and in 2004 the UK supermarket retail chain J Sainsbury abandoned a supply chain management (SCM) system after it had invested US$530 million in the project," the report quoted.
The Economist Intelligence Unit report came to the staggering conclusion that relatively few companies had come to terms with the concept of IT business risk.
"While most IT managers globally say their firms manage IT in an organised fashion, 40% of respondents from the EMEA region (Europe, the Middle East and Africa) say it is not the case in their companies," the report said.
Like elsewhere in the world IT projects fail when synergy and true partnership between business and IT is absent and that if risk is not measurable it cannot be managed.
"It`s not software or technology that kills a project, it`s getting well-defined requirements that makes or breaks it. You have to make sure that they`re set in advance and that the implementation team knows what the transformation should look like."
For more information, please contact Annelize van Rensburg on 011 722 1600 or on her cell 082 338 2646.
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