Time to fly for CIOs?
For some chief information officers, the long-awaited passing of the millennium could mean it's time to fly.
Analysts say several years of spearheading preparation for year 2000 and the large projects that have accompanied it have helped keep top technology executives locked down. Major information technology (IT) buying decisions made since January have revolved largely around Y2K.
But with the new year
lurking, the success of those decisions will come under scrutiny. Industry pundits predict several possible outcomes, including CIOs exiting in search of new challenges and executives being forced out by angry CEOs who question their vision, buying decisions or ability to stay on top of new trends.
There's also the prospect of cleaning up those Y2K disasters that do strike and tackling new strategic goals. In any case, it seems safe to say there's change afoot in the CIO's office.
In recent interviews, Ray Lane, president of database giant Oracle, said it's his "gut feel" that CIO turnover after Y2K will be great, as those who aren't on top of new technologies are shown the door and a younger crew is ushered in. Boards and CEOs have been reluctant to make those changes until Y2K has passed, he said.
Janie Tremlett, vice president of strategy at Internet services company Breakaway Solutions and herself a former CIO, says, "There are a lot of old-school CIOs who have still not adapted to the Web. CIOs will have to change and become extremely Web-focused."
But Peter McAteer, an analyst at Giga Information Group, doubts many CIOs will get the boot simply for lacking Internet savvy. He said relatively few CIOs have several years of Internet experience.
"It's easy [for CEOs] to say: We're interested in someone who has a great deal of Internet experience under the belt," he said. "But the reality is the Internet is a new phenomenon ... We don't imagine a lot of layoffs will occur. [It's] hard to find this talent."
As any recruiter these days knows, it is difficult to find a good CIO--or any CIO for that matter. IT consultancy GartnerGroup says the demand for skilled IT professionals currently exceeds supply by about 30 percent. The average rate of IT staff turnover is now about 15 percent. And it costs between $10,000 and $20,000 to fill a position, analysts say.
"Many companies are paying their CIOs [bonuses] to stay until Y2K passes," said Peter Gregory, a recruiter with Confidential Global Search. After Y2K it may not be the CIOs who head for the door, but the teams of people who did the hands-on work to prepare corporate computer systems to deal with the millennium date change, he said.
"There will be a whole host of other analysts and freelancers who will be freed up to move on," he said. "A lot of companies brought in experts but now that job ... is over."
Gregory said he expects many CIOs from more traditional companies will turn to start-ups, where, despite their lack of Internet experience, their systems architecture and business knowledge will make them valuable.
Don Hirschbein, a president at recruiting firm Management Recruiters International, said he doesn't expect much of a CIO turnover in the beginning of next year unless the CIO "really didn't prepare their company for Y2K."
Other analysts say it's more likely that CIOs will leave following a botched enterprise resource planning (ERP) project. Many corporations began implementing these projects several years ago to upgrade their financial, accounting and order-entry systems while preparing for Year 2000. If those projects are not completed by the Y2K deadline--or are not working out as planned--it could mean trouble for the CIO.
Some recruiters said companies are going to try to entice their CIOs to stay after Y2K passes, partly to help oversee any needed cleanup work. Market research firm Forrester Research, for one, expects that about 70 percent of global companies will "lock down" their computer systems for up to five months after making Y2K fixes to give them time to test.
"There are a lot of companies that have obsolete computer equipment so they'll be holding on to their CIOs until they can upgrade or have the budget to upgrade to newer technology," said Robert Riskin, who heads the executive search practice at RSM McGladrey, a consulting firm in Minneapolis.
Riskin argued that some CIOs who choose to leave after Y2K could simply be searching for a change of scenery.
"There will be movement [after Y2K passes] but it won't necessarily be forced termination; it'll be a movement because of new challenge," he said.