Throughout my career, the general trajectory of technology has been toward shared services. This is driven by the need for efficiency, and incentive for profit for those that are able to aggregate common services and solutions. Just like we all learned in kindergarten, sharing is good. What they did not teach us, is there is a lot of profit to be made in sharing. Cloud transformation (XaaS) is the best example of this. Instead of every company suffering the total cost of common platforms, e.g. (infrastructure, CRM, email and collaboration, network management, security), we share the cost across multiple customers.
There are many efficiencies found when you move to a shared platform. But most of us focus the technology efficiency. We don't have to deploy dedicated software or hardware and we trade the capital cost with a monthly or yearly OPEX. However, one of the big efficiencies found is the sharing of the engineering and lifecycle costs associated with management and operations.
It has occurred to me over the last few years that most companies need to apply the shared services principle to the role of CTO, CIO, or senior technology executive. I have played this role repeatedly in my career. During my most recent experience as a full time CIO, it really came to a head. There was a need for the launch of a new platform and transformation of IT, but after about the first year, it became clear that there was not a need for a full-time CIO long-term.
I decided it was time to actually develop a shared CIO/CTO service for the mid-market and obtain some customers. I have been at this for about 6 months, so I thought it was a good time to share my experience. I have on-boarded a number of customers so far, and the model seems to be working better than I expected.
Customer: Mid-market Retailer with locations in multiple states
Business unhappy with IT's ability to execute
No cost transparency
Technology investments are made in response to emergencies
IT staff turnover is disruptive to business
No clear strategy
On-boarding engagement (6 days):
Created a current state analysis, gap analysis, and strategic plan
Created a IT staffing plan
Created portfolio of recommendations and presented proposed technology roadmap to business owners
Identified root cause of regular outages
Identified $1+ million in potential OPEX savings
Technology roadmap that puts the business back in control of IT
On-going fractional CIO subscription to ensure roadmap execution
The truth is that a senior technology executive is like an insurance policy. In fact, this is true of almost all senior technology roles. You only need a senior executive or technologist when certain circumstances arise. You need them to mitigate the risk of making a bad decision, solving a difficult problem, deploying a technology for the first time, hiring/firing, or other situations that should rarely arise. The normal day to day in technology, if it is working well, should not require a senior technology executive to be on staff full-time, for most companies.
In the case above after the on-boarding period, where a base plan and strategy were established, I meet with the customer once per week to review the past week's progress, blockers, or issues, and direct the activities of the coming week or the next "Sprint". If urgent issues arise during the week, I engage as I would if I were a full-time CIO.
What I am finding is that this model forces me to stay in the lane where I provide the most value. In the end, I find that I am able to provide nearly the same value I would as a full-time CIO. The big difference is the "insurance premium" the customer must pay in the form of a full-time salary.
So how is this different than consulting? Well, it is consulting after all, but the customer needs to look at it as a long-term staffing plan. The benefit for the customer is:
Much lower costs than hiring a full-time CIO, while achieving the same value as full-time.
Mentoring, development, management and leadership of technology staff
Wisdom and experience on technology and its successful implementation
Business and technology alignment
Better transparency and understanding of why they have a CIO
Translation of IT domain to business and vise versa
Technology Cost Management
So what are the benefits for the part-time technology executive?
Neither party is locked into a long-term agreement, if either party doesn't see the value or need.
The model requires less than 60% utilization of your time so you can have the flexibility to address unplanned events with your customers if they arise.
50% utilization, or average of 5 customers, provides superior income to that of a full-time position
Downtime provides opportunity to stay current with the latest developments in technology
Varied customers increases the value you provide overall to the marketplace
The biggest challenge with the model is same as Kindergarten, it's hard to share sometimes. But we need to admit, that the happiest kids share. They just never told us how profitable it can be:-)
Update Jan 2019: Recent large scale transformation example with the International Mission Board. 18 Months complete transformation of Technology Solutions (TS) organization, reduction of $5m/year in cost, deployment of Workday ERP, and dozens of technology and security initiatives. https://youtu.be/8pvmTs21kWA