Here’s a common scenario: Due to an organizational shake-up, a company loses its CIO and, with him or her, the technical expertise to launch a long-overdue e-commerce strategy.
What do you do with an IT department in shambles? Instead of setting out to hire the CIO’s replacement, a better solution may be to “rent” one.
Companies have used CEO and CFO hired guns for many years, but the temporary CIO is a relatively new market. The service has become popular with small and midsize businesses that can’t afford to pay veteran technology executives the high salaries they demand. A short-term CIO also eliminates a company’s need to spend a year or more searching for a permanent hire. Instead, they can outsource the function and use the CIO for the time needed. And for companies that have never employed a CIO, the for-hire model allows them to test the role before committing to a full-time hire.
Most rent-a-CIO firms offer everything from a one-time business strategy assessment to a complete outsourcing agreement under which a CIO dedicates a block of time to a client. In other scenarios, a CIO might make recommendations on which technology applications a company should purchase and how that company should best staff a project.
Leadership during tough times and transitions
Currently, a handful of consulting boutiques rent out CIOs. There’s H.I.S. Professionals, an Atlanta firm that provides IT consulting and management services to the health-care industry; Transition Partners, a Herndon, VA, company made up of former CIOs that contracts out IT management expertise; and aligneinc., a Wayne, PA, outfit that advises companies about IT investments and provides interim IT management services.
There’s also Breakaway Solutions, a full-service provider that offers strategy consulting, systems integration services, and application hosting. The goal of Breakaway’s CIO outsourcing program is to leave the company in the hands of capable internal management and help to hire a permanent CIO and other key IT personnel. Clients pay between $35,000 and $75,000 for a three- to four-week assessment.
“We’re finding that start-ups and companies that are growing rapidly need expertise in a specific area,” said Paul Warren, Breakaway’s managing director of strategy services and a CIO for hire. “They’re out raising funds, giving VC presentations, and creating their business model. They cannot find the technology leadership [they need]. Having an interim CIO takes a tremendous burden off of them.”
These emerging companies find success with CIOs-for-hire because they can meet the challenge of improving IT operations without bringing personal or office politics into the mix.
“It’s a close partnership,” Warren said. “We consider ourselves to be augmenting an existing staff on the management side. If it’s a brand-new company, there’s not much there to transition. With existing companies, having a CIO depart, it starts getting a little trickier. Do you become a leader? Do you become an adviser to a key person? You approach it differently depending on the situation.”
A 1999 study by the International Data Corporation predicts the consulting services market will reach nearly $55 billion by 2003. Services related to changing management and business strategy, those that would typically be the job of a CIO, are growing the fastest.
For companies that are considering bringing in a temporary CIO, Warren advises them to choose a firm that offers a full menu of IT strategy services—one that can actually carry out the recommendations of the consultant.
“We’re intimate with the business strategy, the building of the operations, and the applications. We also have tremendous depth,” he explained. “I’m a CIO, but behind me, I have a whole organization of technology architects who are branding strategists, marketing specialists, technical developers, operational specialists. I don’t think you can get that from a pure-play boutique shop.”
One of Warren’s recent projects involved developing a strategy for a business that found itself without a CIO after a leadership change. The big question for the company’s executive staff was how to handle future IT needs. “I was comfortable with the question, but I wanted to bounce it off my colleagues in the organization,” he said. “I went to a couple of database administrators who are heavy into architecture for feedback.”
Should you become a hired gun?
A growing number of technology executives are hiring themselves out as contract workers because they like the variety of the technology projects they encounter. They also appreciate the exposure to entrepreneurial ventures without the risk.
Warren, for instance, is a former CIO at Forrester Research, Inc., in Cambridge, MA, and has experience with four different business models over 15 years.
“In the last year [with Breakaway], I’ve had exposure to a number of different industries, business models, venture capitalists, and diligent processes—a number of things that a CIO in one company would never get,” he said. “If I want to go back into the role of a permanent CIO, I’m much more valuable today.”
Though a CIO-for-hire scenario may eliminate some long-term stress, contracting out one’s IT expertise can be something of a burden.
“I went from being the person at a large organization who had people doing everything for me, to being the sole contributor who had to work through influence,” Warren said. “It takes time to transition to that.”
Exposure to the Internet and e-commerce are important skills for the IT executive who wants to become a hired gun. Understanding the way technology and business work together is also imperative, Warren noted. “I’d recommend getting into the advisory side of it, whether that’s training or leading some projects in your own company,” he said.
The CIO position is typically a lonely and difficult job. Warren said he appreciates his temporary status because he can interact with his colleagues at Breakaway Solutions.
“What I find is that CIOs love to be with other CIOs,” he said. “That’s an attraction, rather than having to hang out there by themselves.”
Is renting a CIO a smart decision for a growing company? Are you considering availing yourself as a CIO hired gun? Give us your thoughts by posting a comment below orsending us a note.