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Seven statements CIOs shouldn't make

Thanks to comedian George Carlin, everyone knows the seven dirty words that can't be said on national television. But many CIOs may not be familiar with the seven statements that should never be uttered to a CFO or CEO.


By James Clendenen

Many years ago, comedian George Carlin pontificated on the seven words a person could never say on television due to their extreme nature. Anyone who slipped and uttered one of these terms was subject to immediate censorship and threat of stiff penalties.

In the IT world, CIOs face a similar “don’t say it” situation. Instead of seven words, however, there are seven statements tech executives should never utter to the CFO or CEO unless they want to risk serious consequences.

Since today’s corporate organizational charts don’t include positions for full-time censors, here’s a list of what not to say to corporate leadership and why.

# 1: “The project has a negative ROI but I want to go ahead anyway”
With today’s uncertain economy and companies’ inability to easily raise capital, no one wants to hear that a project is projected to have a negative ROI. When teams set project calendars, the primary concern is always that the projects achieve positive results within the next two to three years. For larger projects, this guarantee is even more critical.

Unfortunately, teams often lack a clear understanding of ROI and its importance to the IT department in prioritizing projects. Factors such as discounted cash flows, hard cost savings, and revenue streams must be considered carefully when evaluating which projects should go forward and which should be rethought. Once the concepts are clear and the positive ROI has been determined, project prioritization can proceed smoothly and efficiently.

# 2: “I’m over budget, and the fiscal year just started”
Managing budgets is one of the most important and time-intensive functions a CIO performs. But budgets are often developed from the bottom up, with little input from the CFO or budget committee until it’s time to make cuts. Because of the built-in informational gaps, those cuts may unintentionally affect certain projects.

In these situations, the CIO must then reallocate available dollars to these projects. Unfortunately, there are times when the money simply does not exist. Because the budgeting process takes months to complete, projects that were approved under the original budget but have since been cut have probably already started—even though the dollars to fund them may not be available.

One way to mitigate these risks is to delay the start of new projects until the second quarter of the fiscal year. This postponement allows the IT department time to finish any projects still in progress while giving the organization a chance to adapt to the new technology. In addition, a delay ensures the budget is finalized and any changes to it will not affect the project schedule.

# 3: “Our cost savings procedures aren’t succeeding as we had hoped”
Estimating cost savings is always difficult, and even though they are responsible for making these decisions, IT professionals rarely have the requisite training. Furthermore, additional costs are often accrued by separate business units that have neither the time nor the incentive to follow through on the cost-saving initiatives the IT department has implemented. For these reasons, the promised cost savings disappear.

Having a solid project methodology that includes a framework for capturing cost savings is crucial to solving this problem. Metrics, processes, and procedures for capturing cost savings or additional revenue must be developed concurrently with the new technology or solution. Providing incentives to the business unit and IT department is an easy way to influence behavior and foster cooperation between these two groups.

# 4: “We need more bandwidth—again”
Keeping the infrastructure current with Internet and applications requirements is a never-ending cycle of frustration. As streaming media and graphics use becomes ubiquitous, the stress on the underlying infrastructure grows greater each day.

As soon as applications begin running smoothly, demand for increased bandwidth never fails to surface. At the same time, it’s almost impossible to provide a cost justification for bandwidth upgrades. It’s a challenge to obtain extra budget dollars solely on the promise of faster e-mail service and quicker program execution.

One way to secure funds for bandwidth adjustments is to build the infrastructure upgrade cost into the overall cost of the project. Since one of the success factors of the project is having an infrastructure capable of utilizing new improvements, CIOs should have the authority to increase the project’s budget in this way. Like additional personnel or hardware, increased bandwidth is considered a support vital to the project’s success.

Another suggestion is to spend the time up front to forecast the future infrastructure needs of the company. By designing a system capable of handling modification without significant time or budget costs, you can provide the added bandwidth the company requires without having to resort to other, more painful solutions.

# 5: “The TCP/IP stacks are interfering with the Microsoft APIs, causing a general protection error—that’s why your e-mail isn’t working”
There is always a technical reason for why something isn’t working, but getting too scientific will only confuse users and clients unfamiliar with these terms. Remember that being a CIO is not just about technical competency—it also involves being an effective communicator.

As a business partner, you must understand as much about how revenue is generated and operations are conducted as the technical aspects of your position. Achieving an MBA degree and regularly attending business-related conferences can boost this knowledge.

At the same time, it’s also important that non-IT executives understand some technical aspects of the IT organization so that they’re aware of the needs, concerns, and potential problems associated with a given project. You can bridge this gap by working with executives to understand how much technical detail they prefer. Many executives will want you to be as specific as possible while others will opt for just the highlights. After making this determination, you should adjust your communication style accordingly.

# 6: “The users don’t understand how I’m trying to help them”
The CIO walks a fine line when implementing new technologies because he or she must convince end users that these tools will benefit them. Technology can be viewed with suspicion if promises of productivity improvements foretell possible job losses. Additionally, concerns over power, prestige, and control may cloud judgment about the need for new technology.

For these reasons, you may feel frustrated that, despite your best efforts, the users resist the new tools you have worked hard to develop.

The best way to avoid these situations is to spend significant time within the user community explaining the many benefits of the new technology. Many large organizations have formal user committees or councils to address these issues. In most cases, when users themselves lead these committees, the success rate is significantly increased because you, the CIO, hear user concerns directly from the source, resulting in more meaningful input and stronger partnerships with individual users.

# 7: “Our files were hacked, and confidential data found its way onto the Web”
Despite the fact that technology permeates all aspects of our lives, many organizations still don’t realize how critical data, infrastructure, and Internet security systems are to operations. All too often, security is seen as an insurance policy that can be pared down or even ignored when budgets are tightened. When crises occur, security becomes a top priority—but the damage has already been done.

Security policies must be ingrained not only within the IT department, but within the company, as well. Security groups, especially for larger organizations, may also be necessary. Backup, disaster recovery, and business continuity procedures have to be practiced on a regular basis to minimize potential damage. Reacting late or not knowing what to do at all may make the difference between cleaning up a disaster and preventing one.

The magic of language
Any one of these seven statements, and potential consequences, can be avoided with some forethought and prevention.

In the media, censors filter sensitive language. Technology executives must take it on themselves to turn potentially negative situations into opportunities to advance the business.

About the author
James Clendenen is an associate director in the Dallas office of Protiviti, a firm specializing in risk management and internal audit consulting. For more than 13 years, he has advised corporations in energy, manufacturing, and real estate. Currently, he is focusing on assisting companies with technology assessment and strategy. He can be reached at james.clendenen@protiviti.com.

 

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