CEO vs. CIO faceoff: Doing more with less has limits

Here's a scenario via TechRepublic that could turn out to be very ugly for this CIO. How do you think this CEO will react?

Guest post: Doing more with less has become the phrase of the times as companies struggle to meet financial goals.  The story below from Benny Sisko is hardly uncommon anymore, but is a healthy reminder that the “work box” is only so large.  Hard choices will have to be made.  More posts like this can be found in TechRepublic's IT Leadership blog.

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I was having a lunch conversation the other day with a CIO friend of mine across town.  He was lamenting YABC - Yet Another Budget Cut.  This time around, he lost a staff person - his shop had eight people and now seven.  Demands from his users - about 1,200 in all - have skyrocketed, equipment is failing due to a previous regime’s failure to adequately plan a replacement cycle - a mess he’s been working on cleaning up, his team has had to assume responsibility for telephony because of another team’s failure, and his CEO wants IT to play a strategic role in redeveloping the way the business operates; in short, he wants top-to-bottom process modifications to increase the overall efficiency of his business.

Now, don’t get me wrong - my CIO friend is very experienced, has a ton of drive, likes his job and the company and works hard.  However, it’s apparent to him that he and his team are quickly approaching a breaking point.  When does “doing more with less” become a recipe for failure?

The fact that his CEO has asked him to lead the process review is a good sign for my friend; if his CEO was unhappy with IT or with the CIO, leading that effort would easily fall to another executive.  However, because of budget issues, it’s been made clear that additional resources won’t be coming.  My friend knows that the value that can be wrought from business process changes is huge and can have major cost avoidance implications for the entire organization but without additional assistance, his staff is pretty well mired in the day to day operations leaving little time for new efforts.

His plan right now is to do the following:

• Tell his CEO that it will be slow going (and during heavy times, no-going) due to resource limitations.
• Request an increase in his consulting budget in order to be able to acquire skill sets when needed.
• Make small, incremental improvements and give up on the overarching “turn it all upside down in a day” approach to revamping processes. While the CEO would really like to see fast turnaround on these items, my buddy understands “Good, Fast, Cheap - pick two”.
• Take a really hard look at the services his group is currently providing and make a decision as to whether or not they’re all really necessary. He’s going to be up front with his CEO. His team (from what he said, most teams in his company, too) is stretched to capacity and beyond. His people are working extremely hard so in order to fit new stuff in, something has to go.
• Meet with other areas to determine where their staffing woes lie and, together, develop a plan of action that could result in hiring an additional IT staffer to help address the pain being felt across multiple departments.

I feel for my friend; his organization is really good and will survive the downturn, but they’ve had to take draconian measures to stay within budget.  His story is becoming more and more common these days as the markets continue to bleed and people feel the pinch.

My take: I feel for this CIO too. But I also wonder whether the CEO will throw all of these concerns back to the CIO and say "you come up with a plan because the budget reality and our need to change isn't going away."