Filling the Void: Should You Hire a Temporary CIO?
By Lisa Valentine June 14, 2004 cio-today.newsfactor.com
CIO Today: NewsFactor Network

One of the most important tasks done by the temporary CIO is monitoring project plans. "Setting up a good project plan saves both time and money. It's money saved when you have a good temporary CIO checking in on project progress. It keeps everyone on their toes," says Matt Pasts of BTS Asset Management.

CIO tenure is on the decline: A typical CIO lasts fewer than five years with an organization, about the same amount of time it takes an undergraduate to make it though college.
And the process of hiring a new CIO can take up to a year, leaving the I.T. ship without a captain for a lengthy period, and possibly meaning mutiny among the staff.

Organizations must be prepared to deal with this rapid CIO turnover and the resulting lack of leadership.

A Temporary Solution

One solution is to hire a temporary CIO -- someone who run the departmentwhile the search for a permanent chief goes on, but who is willing to move on once the position is filled, says Alejandro Sarmiento, president, Topologe, a consultancy that provides temporary CIO services, as well as infrastructure planning and implementation, security systems and project-management services..

For example, Topologe has been providing a temporary CIO for a large corporation for four months -- and counting -- as the company looks to hire a new CIO to replace its former CIO, who left suddenly. The temporary CIO serves dual functions, leading the I.T. department while helping to screen CIO candidates.

The benefits of hiring a temporary CIO include not having to pay payroll taxes or benefits, and allowing organizations to take "baby steps" in securing a new CIO while still having someone on board -- however temporarily -- who can guide technology initiatives and provide leadership, Sarmiento told NewsFactor's CIO Today Magazine.

No Trend, Yet

But this is not yet a trend, Marc Cecere, vice president, Forrester Research, told CIO Today. "I see some consulting firms offering services that are usually a foot in the door for other services, such as a CIO mentoring service, or [they] will provide someone as an acting CIO, but it's not what I would call a trend," he said. "It's not institutionalized and is still a bit ad hoc."

Although not fitting the definition of a temporary employee who is hired for a specific length of time, Cecere does see companies bringing in CIOs as "agents of change" to solve a particular problem, such as downsizing or reorganizing the I.T. department. These CIOs typically stay about a year to a year and a half, but the arrangement between the CEO and the CIO is typically an informal arrangement, explains Cecere.

In addition, Cecere sees instances where the organization's incumbent CIO stays on, and the interim CIO serves as a mentor. A number of these interim CIOs are coaxed out of retirement by companies eager to learn from their previous experience or because they are big names in the industry, explains Cecere.

Small Fries

Trend or not, there are companies -- mostly small and mid-size -- that are making use of the temporary CIO services offered by boutique firms, such as Topologe.

BTS, a Boston-based brokerage firm with US$1 billion of assets under management, uses a temporary CIO from Topologe as a cost-effective way to benefit from the services of an experienced CIO without having to pay a CIO-size salary.

Since their I.T. organization is not large enough to warrant hiring a full-time CIO, BTS's temporary chief comes in a few days a week, explains Matt Pasts, president, BTS Asset Management.

Some of the services BTS' temporary CIO performs include assessing new software, such as the firm's recent purchase of an accounting package, and creating core recommendations for improving the I.T. department. To help BTS control costs on their outsourced programming, the temporary CIO managed the creation of a test library that streamlined development and improved access to production resources.

Planning Wisely

One of the most important tasks performed by the temporary CIO is monitoring projects. "Setting up a good project plan saves both time and money. It's money saved when you have a good temporary CIO checking in on project progress. It keeps everyone on their toes," says Pasts.

"If you can't afford a full-time CIO, this is a good way to go," he continues. "Our temporary CIO has definitely earned his money."

Billing rates vary based on experience, with Topologe charging between $150 and $300 per hour for its CIOs.

The temporary CIO has been showing up at BTS' doorstep for about a year, and Pasts plans to continue the relationship.

Structured Approach

For smaller organizations, a temporary CIO can save money by providing a structured approach to buying technology, says Sarmiento. In the past, small and mid-size businesses had an ad-hoc approach to buying technology, but "now that I.T. is an essential part of business for all sizes of businesses, companies need to give it more thought," he says.

"You'd be surprised at how these companies spend money without thinking. They don't have any leadership. Usually it's the CFO or the CEO who makes technology decisions, such as buying servers," explains Sarmiento.

There are disadvantages to having a temporary CIO, Sarmiento admits. "The biggest disadvantage is that the staff is in shock because each CIO has his or her own leadership style that may be hard to adjust to." There is also a ramp-up period as the CIO gets up to speed with the company's culture and staff.

The temporary CIO described by Sarmiento differs from the recalled-from-retirement "change agent" CIO described by Cecere. Topologe's temporary CIOs typically are individuals in the prime of their careers -- between the ages of 35 to 55 -- who have chosen the temporary lifestyle.

In either case, a temp CIO can provide the outside expertise that many companies need to get them over their I.T. hurdles.