INDIA'S FINAL FRONTIER FOR THE BUSINESS OF RETAIL
 
june 2005

   The CIO-CEO Tango:
  a retail perspective

- By Sivaprasad, head, Information Systems, Café Coffee Day
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Though the Chief Information Officer's position has gained considerable importance across all major industrial sectors, it is however an interesting fact that the average number of years an incumbent holds the position is well under two years! In the retail sector it is much lesser. No wonder that many in the industry believe that “CIO” stands for “Career Is Over”. The common reason that is often attributed for the firing of the CIO's is that relationships with the chief executive officer (CEO) gets strained rather fast.

It is particularly true of the retail sector that most CIO's are not regarded of having the necessary business skills in terms of transforming technological initiatives into tangible results important for core business operations. Though top managements of most retail companies' regard CIO's to be excellent technologists, they are apprehensive of believing that it would be technology that could be a prime mover of growth in the future. We may identify factors leading to the CEO- CIO divide.

• Position of the CEO in the organisational decision-making: Amongst major retail companies, the CIO usually regards the usage of IT as an integral component of doing business and considers that it is unfair to judge them on the basis of return on investment. On the other hand the management/CEO would regard that technological initiatives cannot be viewed in a business vacuum and investments need to transform into viable business prospects. The difference in perspectives often leads to the emergence of strains in the top management.

• The Communication Gap: Most of the technological initiatives/plans of the CIO usually fail to take off because of ineffective communication of IT related strategies. This usually happens because the language spoken by a technologist is difficult to comprehend by even the well-educated generalists/investors/top management particularly so in the retail sector. Also, there is usually a considerable age (& experience) difference between the CIO and the other management bigwigs and therefore needs to put in extra efforts to sell his initiatives to the CEO or the top management. This usually leads to frustrations and strains.

• Process management: Since persons having functional expertise manage core business processes in the retail sector, new technological initiatives of the CIO would mean infringement of areas that are otherwise manned by others. This is usually called “Resistance to Change Syndrome (RTCS)”. Moreover an argument that seems most relevant is that operating sophisticated technologies would be very difficult for the end user and ineffective use of technology is worse than not having technology at all!

Bridging The CEO- CIO Divide

It is commonly noted that CIO's hold the following arguments against CEO's and the top management.

• The CEO or the CFO do not think IT is strategic and no amount of persuasions can bring a change in their thinking.

• IT is often seen as an overhead or a cost centre in the company.

• The CEO/CFO does not understand what IT does nor do they wish to.

It is usually difficult for a CIO then to get out of this mindset because the CEO whom he reports to in the retail sector would never have occupied the position of a CIO during his career. Moreover, CIO's usually do not even aspire to occupy the position of a CEO of a retail company. As a result of such attitudes, CIO's never see themselves fitting in as good businessmen, let alone anyone else regarding so.

It is therefore important for CIO's to get out of their stereotypical mindset and see themselves as business leaders rather than crib about the whole thing. If one believes that IT is a driver of growth, he should also get himself prepared to take on the wheels and actually drive!!!

• CIO should also have functional expertise: It is very important to have decent knowledge of the functional areas of the retail sector of which one is a CIO. Within large-scale organisations, increasing compartmentalisation of tasks would result in alienation from work. Therefore one is confronted with a universalism vs. particularism dichotomy. An effective method to get over such situations is not to view them as dichotomous, but as a part of a continuum. Therefore a middle path would require a CIO to have strong technical skills backed by a decent functional expertise with fair marketing and financial knowledge. The academic fraternity has woken unto this challenge only now and most of the management courses include parts of conventional marketing, finance etc with specialisations in IT. Therefore maybe 5-10 years from now, the CEO Vs CIO gap would cease to exist and one might see greater retail sectors being headed by CEO's who were earlier CIO's.

• CIO should propose more business opportunities: Regardless of the industry, part of CIO's work also involves maintenance of the IT infrastructure. When IT infrastructure is huge, CIO's usually confine themselves to their tactical responsibilities. Most of the CIO's also take on all the responsibilities themselves and do not delegate tasks effectively. A CIO should focus on delegating more of maintenance responsibilities and devote energies towards finding opportunities to expand business.

• Plugging Communication gaps: CIO's usually get entrapped into a vicious circle of ineffective communication with the rest of the management. Because they feel that their language is not understood, they usually do no participate in senior management team meetings which further increases the CEO-CIO gap. Even 10 minutes to articulate their agenda and its business impacts during regular meetings would greatly help the cause of the CIO. Also CIO's should consciously try to avoid usage technical jargons that would come naturally. During presentations etc., the focus should never drift from core business domains.

It becomes rather necessary for a CIO to groom himself as a future CEO by deeper understanding of functional domains. This would help in establishing themselves as bona-fide strategic contributors, which would also require conscious efforts to change self perception rather than trying to change other's perceptions of one's self.

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