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CIOs and Central IT Departments Have Become Increasingly Less Useful

Posted Mar 13 2013 12:00am

Here's an interesting article from outside of healthcare about the lack of utility of IT departments and CIOs (see: IT Departments Have Become Completely Useless ), See if you agree with him. The use of the word "useless" in the title certainly overstates the case but most of the points in the article are sound. Below is an excerpt from it:

The role of the CIO, the Chief Information Officer, has been debated about as long as the term in itself exists. Rarely before has there been such a misleading description, because in many companies the person assuming the position of CIO was rarely seen as the chief 'Information' Officer....I teach a course at London Business School for the Senior Executive Program. Top executives from all over the world spend three weeks in London to learn about the latest findings in the exciting fields of Strategy, Finance, Marketing, Innovation and Leadership....The first thing on my teaching menu is to have them do a simple word association on their feelings about 'IT'. The responses tend to be crude: 'boring', 'complex', 'costly', 'always too late', 'annoying' are some of the kinder ones....CIO's have lost the edge. The tension between 'business' and IT has been around forever, but instead of getting better, it has gotten worse in the last couple of years. The reason is that digital has become ’normality’, and almost everyone now feels at ease with digital technology. In other words, the natural knowledge advantage of the IT department has eroded. To put it bluntly, since everyone and their dog started carrying around iPads, the IT department really lost their advantage on the 'frontier of technology'. I think the CIO is greatly to blame for this. In many companies the CIOs never fulfilled their roles as such and rather persisted in performing the more comfortable job of Chief Technology Officer (CTO). The reason being that the most of these people had been running IT before it was even called IT....Many IT departments seem stuck in their role as 'suppliers of technology'. Very few have really stepped up to what the CIO job description is really all about: having a solid impact on how companies are dealing with information....But very few (CIOs) had a solid influence on how companies deal with content, build up knowledge, and how they could innovate with information....That's why the CIO rarely had a real seat at the executive management table....But recently, we've seen the rise of a new breed of CXO: the 'CDO' or Chief Digital Officer....This next gen IT hero is the one who really understands digital as a means of innovating the company. His daring mission is to transform the business model of the company.

I have been pondering for many years why chief information officers (CIOs) in healthcare and other industries don't get much respect (i.e., a seat at the table). The answer was actually right in front of me. As the author of the piece asserts, these executives don't have much to do with the value and utilization of information within the enterprise. They function more as "chief information technology officers" and IT does not have the mystical aura of previous times. In fact, the status of hospital CIOs is getting degraded even further these days. Most hospitals are now spending tens or even hundreds of millions on EHRs and directions about how to best deploy the systems come straight from the vendors (see: Are You an Enterprise or Best-of-Breed CIO? Access to Cash May Make the DifferenceSome Hospitals Can't Get Past the Final Epic Deployment Step: the "Judy Check" ). 

All of this discussion got me wondering about the source of innovation in hospitals and healthcare. Think about your own company or hospital. Which personnel or executives are the sources of disruptive innovation, to use the Clayton Christensen's term? I hark back to a note I wrote four years ago that quoted him from a NYT article (see: Disruptive Innovation and Reform of Our Healthcare System ). Here's a quote from the that article:

Disruptive innovators in health care aim to shape a new system that provides a continuum of care focused on each individual patient’s needs, instead of focusing on crises. [Clayton] Christensen and his co-authors argue that by putting the financial interests of hospitals and doctors at the center, the current system gives routine illnesses with proven therapies the same intensive and costly specialized care that more complicated cases require.

Christensen's fertile mind and attention to innovation and reform in our healthcare system is still at work. You want want to scroll down to his critique of ACOs in a recent note (see: ACOs Won't Work According to Clayton Christensen in the WSJ ). He is still emphasizing the fact that we are putting the financial interests of hospitals and physicians center stage and not changing the set of incentives as we strive to reform our healthcare system.

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