There are two sources of value that a CIO must bear in mind, one is growth oriented, and the other is leverage oriented. These can be at odds. It is important for a CIO to successfully managed this paradox.

It truly is a paradox. But it is the paradox that any business leader, any CEO faces. On the one hand, you need to innovate and be agile to serve the strategies of the business. On the other hand, you have a lot of activities that are commodity driven, and if you are not competitive with other entities that can provide those services, then you will be at a competitive disadvantage as a company. The more you can standardize, the more you can gain economies of scale and render the IT operation more efficient. On the other hand, the business needs non-standard technologies for innovation.

In my mind, business Nirvana is top-line growth. This suggests business-driven IT activity, and a high degree of IT agility. The businesses will want and expect new devices, new capabilities, new applications, new tools to reach and delight their customers. They are looking for social networking, iPad apps, smartphone apps, and linking into cloud-based services to reach their markets and deliver innovative products and services. IT nirvana is making everything the same, efficient, secure, leveraging economies of scale. In this scenario, IT controls things to a greater extent.

In many organizations, there is a pendulum that swings between these two scenarios, between Business Nirvana and IT Nirvana, never quite reaching either side before the momentum shifts in the other direction every three to five years. An innovative CIO is hired who focuses almost exclusively on enabling the business vision, and, for a time, achieves tremendous things for the organization. In many cases, this is a CIO within a business unit that is seceding from an overly controlled central function. In the process, our innovative CIO creates a shadow infrastructure, replicates existing functionality, and buys products and services at sub-optimal purchasing power and from unproven vendors. Projects fall behind, costs accelerate, and the desired speed and agility are not attained.

Next, a cost conscious CIO is brought in to rectify these issues. The business executives speak with great frustration about the cost and inefficiencies of the IT department and demand double-digit percentage cost reductions. That new CIO spends a lot of time fixing the mess, cleaning up the architecture and infrastructure, cutting staff, and instituting practices to make things more efficient. That CIO de-emphasizes innovative, top-line growth opportunities in favor of more efficient operations, greater buying power through standardization and scale, and more stable, reliable operations through solid IT processes. After a period with a lack of innovation, however, that CIO’s business leader peers become antsy about the lack of velocity and agility and the unproven top-line value IT is achieving, and the pendulum swings back again.