5 ways CIOs will disappoint their CEOs in 2023

Surveys can be useful, but when it comes to setting IT’s priorities they’re more rearview mirror than windshield.

Which is why we at CIO Survival Guide headquarters have an alternative to suggest: List the promises you’ve made to the CEO for 2023, along with a compendium of what the various business punditries the CEO reads have told them to expect from you.

What you’ll get is a list of ways you can expect to disappoint your CEO this coming year. It will be a list something like this one. Your priorities are the steps you can take to prevent the disappointments.

Promise #1: The cloud will save money

Disappointment: It never did, and still won’t

Why it won’t: You can buy servers as cheaply as the cloud providers, and they need to add a profit margin when they charge you for using them.

What you should promise instead: Unlike on-premises infrastructure, the cloud lets IT easily add capacity in small increments when demand requires it. And — and this is the biggie — it also lets IT shed capacity when it’s no longer needed. The result? When demand is seasonal or unpredictable the cloud truly does save money. But when demand is steady, or increases in demand are predictable, on-premises infrastructure costs less.

In the cloud, fixed costs are small but incremental costs are big. The costs of on-premises systems are the opposite.

If your CEO is likely to care: Also explain that “the cloud” isn’t just a place processing happens. It’s an application architecture. But why that matters is a much longer and involved conversation for which the CEO will probably lack the patience.

Promise #2: The new ERP system will make us more effective and efficient than the supposedly obsolete one you talked the CEO into replacing

Disappointment: It won’t

Why it won’t: For 10 or more years IT deeply and extensively customized the old system, and the business processes it supported are fine-tuned to those customizations. The customizations made business operations highly efficient. But they also made the old system very hard to replace.

Every member of the executive suite agreed IT should implement the new system “plain vanilla” to save money and time. Which it will. But that means most parts of the business will have to adapt their processes to how the new system works out of the box.

Plain vanilla, that is, will make IT more effective, at the expense of making the rest of the business less effective. Not the best sales pitch; definitely not the best way to make friends and influence people.

What you should promise instead: Chocolate sprinkles on key sundaes.

IT’s business analysts can and should compare the effectiveness and efficiency of the new system’s out-of-the-box business process workflows to those now in use. Where the new system’s processes are as or more effective, the implementation team will create training programs to help everyone adapt. When the new system’s processes are less effective, the implementation team will, using either its built-in configuration tools or custom-built satellite applications, adapt it to the business processes now in place.

If your CEO is likely to care: In the long run there’s no choice but to replace the old system. It is obsolete, meaning that you won’t be able to recruit the talent IT needs to support it, and that you’re never sure you’ll be able to run it on the platforms and infrastructure you can buy. It’s pay it now or pay it later, and later always ends up taking longer and costing more.

Promise #3: We’re ‘digital’

Disappointment: Can we define our terms, in plain language please?

Why the CEO is annoyed: The board keeps asking if you’re digital yet. But the CEO can’t even tell the difference between today’s IT organization and what IT did five years ago. The entire board-level conversation is about how IT helps cut costs, and the CEO can’t even prove that.

What you should promise about “digital”: Revenue. The reason cost-cutting is the only conversation the CEO can have with the board is that the only projects the CEO and board will approve are projects that cut costs.

But “digital,” ignoring its unfortunate conversion to noun-hood, should focus everyone’s strategic attention on creating competitive advantage, increasing revenue by supporting the design of more interesting products, and improving customers’ experience working with your company.

IT can support this. But it’s the executive leadership team (ELT) that has to commit to it.

If your CEO is likely to care: Make a list of potentially useful digital technologies — those that can support revenue-oriented business capabilities. Walk the CEO — and then the whole ELT — through the list and choose no more than three for deeper investigations into how to integrate them into your company’s products and services.

Promise #4: ‘Agile’ means no more big-project failures

Disappointment: Your name will be on some miserable Agile project failures this year

What’s going to go wrong: Your company is going to make three Agile mistakes. The first, and worst, is that it won’t lose the habit of insisting on multitasking — developers will still be asked to juggle multiple competing projects, and their top priority will still be the next phone call.

The second mistake will be expecting Agile to scale up — that the same techniques that worked for small-scale projects will successfully manage large-scale strategic programs. The result: Nobody knows how to plan the big stuff, leading to arguments instead of consensus about priorities.

The third: Recognizing that Agile project managers (i.e., coaches) and team members need to learn Agile in small projects before putting them on large-program Agile teams, but not recognizing that sponsors also need to learn their Agile ropes before they sponsor large Agile programs.

What you should promise about Agile: Agile isn’t synonymous with haphazard. It has a lot of moving parts, and driving them is a change in culture — a different way of thinking about how to organize and run projects — that has to extend beyond IT to everyone in the business who has a stake in Agile-run projects.

If your CEO is likely to care: In most organizations, strategic planning results in Waterfall-style transformation roadmaps. These are the antithesis of Agile project planning and management. Which means it might make sense to figure out how to plan an Agile business strategy instead of trying to impedance-match Waterfall strategy and Agile projects.

Promise #5: M&A ‘synergy goals’

Disappointment: You won’t achieve them, and never will

What’s going to go wrong: The team that set the acquisition’s synergy goals — the efficiencies and economies of scale that justified the acquisition — will set them by “solving for the number.” Its goals will be fantasies the day the ink dries on the business case the board will see.

In particular, the acquisition’s business case will depend on integrating the acquired company into the buyer’s business operations, and integrating business operations in turn will depend on standardizing business processes so everyone can use the same suite of applications.

But it will turn out that even something as seemingly straightforward as standardizing the chart of accounts is complicated, and the rest of process standardization will be even worse. Without standardized processes, IT will have to work from two conflicting sets of specifications. As for integration, IT’s integration architecture has been a hot mess of point-to-point batch data synchronization programs for years. Post-acquisition it will be a hotter mess of quadruple the number of synchronizations.

What you should promise: As CIO you’re already the victim of having to keep promises someone else made. So keep your options open, make as few promises as possible, and especially, insist that all IT targets have to be a consequence of business process standardization.

If business process standardization isn’t going to happen, plan on everyone involved shrugging their shoulders and agreeing the best that can be done is to operate as a holding company, limiting integration to the simple stuff, like email and web conferencing tools.

And maybe IT can save a few bucks here and there by consolidating data centers.

If your CEO is likely to care: The CEO isn’t going to care. But after the dust has settled you should corral the ELT to suggest that as a lesson learned from this acquisition’s disappointments, it would be wise to create an M&A playbook so that instead of making the same mistakes again, the company will figure out a whole new set to avoid the time after that.

Business IT Alignment, CIO, IT Leadership