IT GovernanceRisk Management

How Much Risk Should CIOs Take?

At the MIT Sloan CIO Symposium this past May, battle lines were drawn between academics and CIO practitioners. The academics explained how CIOs should be more agile, should attempt to take on as many projects as possible, promoting those that are successful and cutting the failures early of those that are not. The CIO practitioners, however, know that CEOs need justification for all actions of IT, and simply can’t shuffle projects as quickly as possible as this commentary article by Eric Lundquist indicates, CIO’s can’t “storm the ramparts” of business: But most CIOs aren’t rampart stormers; they’re executives who must take the pulse of their companies and industries and apply limited investment dollars to technology projects that will produce the biggest bang. Rather than embark on 1,000 projects and see which ones stick, they must limit their companies’ risk to those initiatives with the best chance of producing the biggest returns–those that drive the most revenue and do the most to raise customer satisfaction or reduce business friction. When a panel of CEOs was asked where they would like to invest additional technology dollars, they gravitated toward customer analysis and customer-facing systems. In the end, Lundquist indicates that CIOs have to make smart bets rather than brash decisions. By keeping a steady course, CIOs can gain the support of the CEO rather than trying to rush projects through and, potentially, having many failures along the way.

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