Information Technology Management with a Purpose

Nov 9 2010   4:37AM GMT

Are CIOs risk averse?



Posted by: S R Balasubramanian
Tags:
CIO career
innovation
language of business
risk tolerance

This is a question that I am not sure of asking. As of today, the CIO is an important functionary, and has a role to play in the improving organization’s capability to function in the market and beat competition. Companies, in an effort to grow and expand, take various business risks — an inherent process. As the CIO assists in this process, he may also have to take various steps that are out of the ordinary, and in line with the business’ expectation. This means that the CIO has to often take steps that help the organization leap frog in terms of efficiency, cost cutting, and seizing new business opportunities.

Does the CIO measure up to this task? Some CIOs may do so on several occasions, but many may not. I have generally found CIOs to be careful, playing safe, and generally risk averse. Let me share a few experiences to illustrate my point.

In 1993, while looking for a good platform to develop applications in a GUI environment, I stumbled upon Gupta-SQL. Foreign IT magazines had spoken highly about this product, and therefore I decided to test out their evaluation copy. Impressed with the features, I placed an order, started work on it, and developed wonderful applications. A few of my CIO friends were also evaluating the Gupta-SQL, but decided to stay on with their Oracle environment saying that they felt comfortable with it and do not want to make a change.

During early 2000, when I wanted to add more disk space, the vendor suggested that I go in for a storage server. I thought he was crazy, but when he took me through my future projections for storage and the consequences, I got the point, and set up infrastructure to take care of the future. I learnt that I was one of the early ones to adopt this solution. For a few years thereafter, I observed that many of my friends did not take that step, and continued with their earlier arrangement — despite having checked with me.

Another interesting episode was in 2006, when SAP felt increased competition from Oracle. I decided to bet on DB2 as the preferred platform, after research on the topic, discussions with industry watchers, and advice from the Gartner group. There were clear indications that for a Greenfield site, it was better to choose DB2 over Oracle DB for SAP. I went ahead, but none of my other friends dared to do so — even though I shared my study findings with them. They preferred to stay with the familiar environment.

Finally, I would like to share my experience with server virtualization. We are on VMWare, but when we spoke about shifting our applications on Microsoft and Oracle platforms, we were strongly discouraged by these vendors. We were told that their software has not been certified, except for the respective virtualized platforms. They even went as much as to caution us that they would not be able to provide support. Despite these warnings, we have successfully implemented this, and been able to benefit from the shared infrastructure.  I have shared the advantages gained at various forums, but I learn that CIOs still are averse to trying out this new step, preferring to stay safe with their current hardware arrangement.

So my take is that CIOs by and large are risk averse, and stay away from any adventurism. We are told in business that ‘no risk, no profit’ – perhaps that applies to business — not IT.

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