IT cheat sheet for CEOs
- 29 September, 2005 13:35
There can't be a more daunting task for a new CEO (whether promoted from inside or recruited from outside) than to try to understand the status of the IT department. It's a difficult area to become comfortable with, since most CEOs aren't schooled in IT operations.
I believe it's the responsibility of the CIO to make that educational process as productive and painless as possible. CIOs who can do that have a much better chance of reporting to the new CEO.
In an attempt to help you help your new executive through this process, I've listed eight IT areas that should be the focus of the CEO and listed the questions a newcomer should ask. I believe this series of questions and answers could allow the CEO to get a quick handle on the IT operation and the issues that are important to top management.
Let's start with our equipment infrastructure. Please describe for me our data center environment.
- What kind of equipment is located in which facilities?
- Do we have equipment outside of our facilities?
- Are major upgrades planned?
What are our plans should a disaster such as a fire or flood incapacitate one of our facilities?
- Do we rely on a "hot" backup facility, or are we expecting to use one of our other facilities?
- Is the plan tested on a regular basis? If so, what have been the results?
- Please explain our current file backup and off-site retention policy.
How do our operational systems work on a day-to-day basis?
- What are the really critical IT activities that could affect our business?
- Have the systems been stable or volatile over the past six months?
- Do we use an enterprise system from a single vendor, or do we bring in best-of-breed applications?
- Do we have a lot of customized applications?
New System Methodology
How do we initiate new projects?
- Do you decide what we should work on, or is that the job of some type of steering committee? If the latter, how does that process work? If the former, how do you do it?
- Does each department pay for its own IT services, or is IT considered a corporate expense? Do you agree with this arrangement?
- Do we use consultants and/or outsourcers? If so, how is this usage determined?
- How do we track progress?
- Describe for me the major projects under development. Are any in trouble?
- How are we doing with Sarbanes-Oxley Act compliance? How about other regulatory requirements?
Please review for me the components of the IT budget.
- What percentage of corporate revenue does IT department expense account for? Has this percentage been changing over the past five years?
What is the breakdown of IT personnel, such as development or operations?
- Has this number been changing over the past five years?
- Can you review for me the makeup of your organization, its strengths and weaknesses, and your succession plan for senior leaders and yourself?
We've talked about physical security, but attempts to crack into our system and compromise our operations could be even more devastating.
- Who's in charge of security?
- Are you comfortable with his skill level and loyalty to our company?
- How do you monitor this area, and what is your assessment of our level of protection?
What is your vision of how we should continue to automate and digitize our company?
- Do we have a long-range plan for IT that supports our corporate long-range plan?
- Are you involved in that process?
- What are some interesting technologies that you think could help us?
This is by no means a complete list, but it will get the new CEO actively involved in the top-level issues that executives need to understand. The meeting to discuss these issues is one of the most important for you, the CIO. It will set the stage for the type of reporting relationship that will be established. Frame your answers in business terms that the boss can understand. Good luck!
Paul M. Ingevaldson retired as CIO at Ace Hardware Corp. in 2004 after 40 years in the IT business. Contact him at firstname.lastname@example.org.
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