Managing Automation- July 2008 - (Page 14) joshua greenbaum NOTES Back before the modern enterprise software market started, the question of who was in charge of IT had begun to unravel. The all-powerful CIO running the all-powerful data center was being pressured by a technology trend — distributed computing — that threatened the centralizing power of both the data center and the CIO. Then integrated enterprise software suites emerged and the power center began shifting back to the CIO. The importance of integrating multiple back-office functions gave renewed life to the CIO as the overseer of this increasingly complex, largely monolithic, computing model. And a valued relationship between the CIO and suite vendors emerged that endures to this day. The relationship endures yes, but does it still dominate IT spending and, in particular, spending for innovation? As a recession now heaves into view, an interesting set of questions is arising about whom vendors should pitch their wares to, and who on the user side is responsible for paying for innovative solutions that represent the leading edge of the enterprise. There appears to be a shift favoring a buyer class that has been gaining clout since the last recession: line-of-business managers. As these buyers became more engaged in purchasing new technology, the market circa 2001 responded with a growing number of point solutions targeted at solving specific line-of-business problems. Simultaneously and not coincidently, CIOs became more connected to, and beholden to, the business side, even as they tried to shore up their prerogatives on the IT side. But the problem is that much of the IT spend that CIOs control directly is devoted to maintaining an infrastructure that becomes costlier the older it gets. And that limits The CIO’s Waning Relevance josh@eaconsult.com After integration and maintenance, IT budgets don’t have a lot of spend left for innovative solutions. So vendors are knocking on line-of-business doors. CIOs’ effectiveness in business innovation. Once the entitlements such as integration and maintenance are taken care of, too little of a CIO’s budget remains to positively impact the enterprise. The result: Some CIOs are feeling marginalized, cast away from the innovative edge and functioning more on operations than on strategic initiatives. This shift is threatening the close partnership between CIOs and suite vendors, as the vendors increasingly focus on the line of business while merely paying lip service to their CIO relationships. As times get tougher, the internal debates between CIOs and line-of-business managers will only intensify, in part because CIOs’ mandate is dominated by the burdens of maintenance instead of innovation and, in part, because vendors keep selling innovation to the line of business instead of the CIO. The industry appears to be coming full cycle, as the CIO’s power wanes in light of a new realization that innovation at the business level is hard to apply across the enterprise in a one-size-fits-all fashion. Instead, innovation must be tailored to departmental, process-specific needs — and budgets — that are better satisfied in smaller, nimbler line-of-business solutions than big, monolithic suites. I doubt the current shift will last any longer than the last one did; concepts such as enterprise service architectures or enterprise governance, risk, and compliance will shift some power back to the willing arms of the CIO. But for now, the innovation card has slipped from the CIO’s hand. And it may be hard to get it back for some time to come. ■ Joshua Greenbaum is principal of Enterprise Applications Consulting, based in Berkeley, CA. maonline managingautomation.com For more of Joshua Greenbaum’s views, visit: ❑ Sound Familiar? www.managingautomation .com/notes51 ❑ Shades of Green www.managingautomation .com/notes50 ❑ Third-Party Influence www.managingautomation .com/notes49 ma July 14 2008 Photo: David Toerge http://managingautomation.com http://www.managingautomation.com/notes51 http://www.managingautomation.com/notes51 http://www.managingautomation.com/notes50 http://www.managingautomation.com/notes50 http://www.managingautomation.com/notes49 http://www.managingautomation.com/notes49
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