CIOs and the Rise of the Regulatory State

Not long ago, I received a newsletter from my alma mater promoting a lecture for attorneys considering a mid-life career change. It’s a sad but true fact that for many lawyers, the job just didn’t turn out to be what they’d hoped for.

I believe that the same is true of CIOs. Recently, an Information Week blogger suggested that the number of CIOs will decline over the next five years. His reasoning is that outsourcing of infrastructure and development will rob CIOs of their raison d’être: oversight of the legions of programmers, systems administrators, and others who comprise the bulk of the IT organization. While his reasoning is generally sound, there is a somewhat more fundamental dynamic operating as well: CIOs are simply dissatisfied with their jobs.

The data are mixed. While a 2010 study reported that “career fulfillment among [US] CIOs” was “down significantly over previous years”, a more recent study suggests that CIO satisfaction has stabilized. The numbers may be hard to interpret: when a CIO reports that he is “not seeking a new position”, is that because he’s incredibly happy where he is, or because there are few really good opportunities out there, and it’s simply not worth the effort to look?

These should be salad days for IT. With so much happening in technology—Social networking! Cloud! Virtualization!—one might assume that CIOs would be excited by the many new tools at their disposal to help them drive and operate their businesses. And, no doubt they would be… if they had the time and budget to focus in those areas. Instead, however, their energy is increasingly consumed by the technology trend that isn’t technological at all: regulatory compliance.

Compliance isn’t new, of course, but the degree to which it has overtaken every IT budget and strategy discussion is unprecedented. As a result, I view compliance as the leading technology story of the century to date—and it doesn’t look like things are going to change any time soon.

When I spoke on the topic of CIO challenges at a conference a few weeks ago, one attendee confessed that she had recently asked her boss to find her a new position in the firm. Why? Because she didn’t want to spend the rest of her career dealing with compliance issues.  Nor is hers an isolated case. In my last enterprise technology leadership role, I spent well over half of my time seeking, implementing, and managing compliance solutions, with only a sliver of my energies actually devoted to finding ways to help the business reduce costs and increase revenues. Take a look at any of your major capital projects involving IT: what percentage of resources is spent on SDLC and PMLC bureaucracy that exists primarily to satisfy the PMO and compliance officer, rather than on actual development and delivery?

Many CIOs will begin to feel that they simply didn’t sign up for this. Whether they came to the role from IT, or through the business, CIOs want to believe that they’re making a direct contribution to the success of their enterprise—not just keeping regulators happy (and executives out of jail). Businesses still need the benefits that a great IT organization can provide, such as agility, innovation, and efficiency. It may take a rethinking of the roles of the CIO, Chief Compliance Officer, and others in the executive suite to ensure that those benefits can still be realized in the modern era of zealous regulatory oversight.

BIO:

E. Scott Menter is the VP of Business Solutions for BP Logix, a provider of business process management (BPM) solutions to corporations, government agencies, and non-profit organizations. Scott is the former head of technology for WaMu Investments, a national retail brokerage. In addition to technology leadership positions he held in financial services and higher education, Scott spent over a decade leading his own identity management software firm. Scott invites you to contact him at Scott.Menter@bplogix.com or on Twitter at http://twitter.com/ESMatBPL.