Middle managers wield too much power over IT choices, paralyzing decision making and adding to costs and complexity, according to the findings of the 2008 Pressure Point Index survey by HP.
IT chiefs have lost their grip on important IT decisions, as middle managers, external consultants and other stakeholders made their own purchasing choices, according to the survey. While this devolving of power provided results at the departmental level, it eroded CIOs’ ability to introduce company-wide benefits.
We’ve seen a balance of power change. Ten years ago the CIO ran everything, now we’ve got a generation of IT-literate users. The negative result of this approach is that it’s very fragmented and things tend to get optimized at the individual business unit and not overall, said Ian Miller, director of application services, HP Services EMEA. Such is the magnitude of change that some firms had scrapped the CIO altogether, he said.
Their shrinking influence has damaged CIOs’ ability to modernize the IT estate and deliver benefits across the business. One area where this lack of power was keenly felt was applications. Some 82% of the 234 senior business and IT decision-makers from the UK, France, Germany, and Italy surveyed, felt that having too many cooks prevented them from having a coherent applications strategy. Even though 94% of them identified that having a clear applications strategy across the business was an essential element of a successful company, 76% admitted that they lacked an effective policy.
CIOs were also hesitating over modernizing their approach to mainframe usage. Three-quarters of respondents (at companies with 1,000 or more employees) used mainframes, yet 57% of those companies were considering dumping them in favor of cheaper solutions such as open source. But their resolve was wavering over the cost implications and the resistance to change of senior management.
But HP pointed out that there were vast savings to be made for CIOs able to push through their strategic vision. A company paying $37m a year on its mainframe environment could spend just $8.5m in an open source set-up, while a smaller firm spending $4.5m could reduce this to $1.4m on open systems.
People are genuinely not aware of the size of the prize. We can take 70% out of the cost of an organization, said Miller.