Interim CIOs are on the rise

In the old Westerns, the taciturn hero would drift into town, and with a "yep" and a "nope" he'd see off the bad guys before riding into the sunset. These days, the household names of British business are increasingly likely to turn to a hired hand for help in a crisis. And while interim CIOs are hardly the stuff from which gunslingers are made, there is more than a whiff of the OK Corral about their tales from the frontiers of IT management.

The use of interim CIOs grew by more than 55 percent over the past year, according to Paul Botting, chairman of the Interim Management Association, which represents the agencies that find temporary managers. Driving this growth, he says, is the increasing pace of business and a greater willingness to outsource.

"The growing complexity of projects means that organizations need to buy in skilled and highly paid specialists," Botting argues. "In some ways, they are trouble-shooters brought in to manage change. The change may be a merger, an acquisition, a startup or a turnaround. Whatever it is, it involves a risk or a problem."

Sometimes an interim CIO may fill in when a permanent manager has become ill or has left suddenly. It is quite common for an interim to be hired because they have particular expertise -- in e-commerce or in relocating IT facilities, for example. Very often, they walk into demoralized departments without proper leadership, where something has gone badly wrong.

Big project experience

Agencies that specialize in interim managers like to talk about temporary CIOs being over-qualified for the jobs they are doing and there are certainly many interims who made their names on big IT projects in the 1980s and 1990s. Bill Limond, for example, oversaw the introduction of systems for a completely new, deregulated gas industry. At the time, he pioneered outsourcing in the UK and transferred 2000 British Gas employees to a third-party supplier in the process.

For the past eight years he has been an interim manager, even finding time to set up an agency for interims called Patina People. "I found it a real challenge to be responsible for achieving results in a limited time-scale and then to move on," he says. "You've got to be over-qualified, very experienced and know how to prioritize."

Not that Limond has ducked many challenges as a freelance. He worked on a strategy assignment for BT, as CIO at the -Audit Commission, and had a similar role at Transport for London, where he introduced an online journey planner and reorganized the outfit's SAP system.

Those involved in the business are quick to draw a distinction between the qualities a manager needs to run a department in a steady state and those required when an organization experiences the IT equivalent of a Big Bang.

"The vast majority of situations are crises of some kind or another," says interim CIO Kevan Robinson. "There is a problem to solve or an organization that is not working well. This gives you freedom to operate. We are not career-threatening [and] we can say things others couldn't say -- we are extremely honest brokers."

Robinson, who was a permanent IT director for investment bank Robert Fleming and EMI Music, says no two assignments are ever the same. One of his tasks saw him introduce worldwide management change at international law firm Clifford Chance. The project involved persuading partners to adopt the same processes. "Partnerships are very difficult because there is no single decision maker," he comments.

At Companies House, the organization that handles the legal side of business registrations, Robinson had to cope with a depleted boardroom, no chief executive officer and a "rudderless" IT department.

Typically, he has a few weeks to agree a plan of action with his employers and three to six months to complete his assignment.

"It is well paid but you have to find your own pension and have money for a rainy day. It doesn't necessarily suit everyone because some career people may be concerned about not knowing what is going to happen next."

The pay is certainly attractive. Fees can reach £1000 (US$2,003) per day or more, although the average day rate for an interim manager is £622, according to the Interim Management Monitor, a survey produced by agency Russam GMS. Although the top-line figures may look good, CIOs who find work through agencies -- and most will be registered with a number of them -- must take account of agency commissions, which are around 25 percent.

Botting, who is also managing director of the commercial sector interim practice at agency Odgers, talks about the 'one per cent rule' which means that, as a rule of thumb, the day rate an agency charges is equivalent to one per cent of the permanent salary for a position. So, if a job pays £100,000 per year, the day rate would be £1000 and the agency fee would be £250.

Banking and finance are the biggest employers of IT interims, and account for nearly 40 per cent of all assignments. Manufacturing and retail follow. Surprisingly, despite the well-established contractor culture in IT, there were proportionately more interims working in the finance, human resources and marketing roles last year.

However, CIOs can take comfort from the fact that in 2007 IT specialists commanded the top rates: higher than general managers who were on an average daily rate of £610, or sales and marketing executives who earned £595 a day. The NHS, fast-moving consumer goods companies, utilities and professional services firms paid the best, although interims willing to work overseas got the highest rewards.

Nor does the image of the semi-retired interim manager in their fifties gently easing into retirement hold good either: interim managers are getting younger, according to Russam GMS. Whereas interims in their fifties previously secured the most work, 56 per cent of interims on assignment at the end of last year were in their late twenties and thirties, says the firm.

Nick Dearden is currently running IT at media giant News International. Although Dearden has also worked at Trinity Mirror Group, he has had an eclectic career with spells in financial services, insurance, retail and telecoms. "You don't need to specialize in a particular industry," he says. "It is all about technical issues and understanding the business."

Several short-term roles in private capital firms gave Dearden a taste for the life of an interim. "I enjoyed that pressure and focus," he says. "One of the best results is to be able to hand a project over to another team knowing that it's going to work."

His most satisfying project was a spell at the AA after the car breakdown firm demerged from energy company Centrica and before it merged again with Saga. "I had to take a big program of infrastructure improvement and knock it into shape. I had to adapt the program to fit what was possible then build businesses and find contractors to see it through."

Instant results

He believes that the use of interim CIOs is bound to grow because of the results that interims can achieve. "Usually it's the case that the existing management have become stumped. But there is always a way to move forward. It involves understanding the issues, feeding those back to the board and making recommendations. There are always some quick wins."

However, interim management is not for everyone. Colin Beveridge, for example, worked as a freelance for over 16 years, putting in time at BACS, British Telecom, DHL, Kellogg's, Anglian Water and Powergen. He even set up his own association for interim managers. In the end he gave up because, he says, there was an oversupply of managers and "too many bottom feeders".

Interim CIOs face competition from consultants who may offer to implement the IT programs that they themselves have devised. With an organization to back them up, in-house tools and methodologies to aid development, they can be an attractive proposition. But consultants will cost more and their primary loyalty will be to their organization, say those involved in interim management.

"An interim manager is a doer as opposed to a strategist. They are loyal to a business objective rather than to a consultancy firm," says Gary Fay, principal consultant at agency Hudson Global Resources.

Insurance is one industry that has embraced the interim way of working more enthusiastically than most. "Insurance hasn't been viewed as sexy in the past," acknowledges Dave Pye, CEO of the Highams Systems Services Group agency which specializes in insurance and financial clients. "However, online competition from new players such as MoneySupermarket and Go Compare has made the insurance industry sit up and think. I have heard that 90 per cent of insurance business will be conducted online by 2012."

Jonathan Barber had already clocked up some 60 projects for 25 clients when Highams got him a berth at the Liverpool Victoria insurance group. "I was brought in to be responsible for a sizeable chunk of IT while Liverpool Victoria worked out what IT should look like," he says.

LV's IT had been outsourced to EDS but the UK's largest friendly society wanted dramatic business change and needed to know what kind of IT would best support that. One of the key questions, says Barber, was what sort of relationship with suppliers would suit the company -- in-house or third party. "We brought business engineering, design, strategy and governance in-house and opted for a third party for operational and development activities."

Barber stresses that interim managers need to be tactful. While he was working at savings company Skandia he was brought in over the company's senior IT director while he went off to design the future of the firm's IT.

"It's absolutely vital to be sensitive. If you take on difficult things it's hard not to upset people. But you have a duty to take the company forward; you have to look at what's best for the company. The most rewarding aspect is being able to make an impact quickly. The frustrating thing is not being there for the long term."

That may be true, but many interims go back to the same client or specialize in a particular industry. And since knowledge transfer is often a key objective in hiring an interim, they can at least have the satisfaction of having left a legacy behind.

David Miller, who has his own consultancy called ITDynamics, has worked a lot in the not-for-profit sector. Most recently he had a spell as IT transition manager for the crime reduction charity Nacro. The assignment involved replacing the entire IT department and recruiting new staff.

"In any situation there is a lot of leadership work to be done," he opines. "You have got to motivate people. At Nacro I had to create a new IT function and work with the people who were leaving. You can't do that if you abuse your position."

Tom Ganham, formerly at BT, is an interim who has worked in the public sector both at the Financial Services Authority and now at the Carbon Trust, a government agency tasked with publicizing carbon usage. At the Carbon Trust, Ganham has spent four-and-a-half months running IT after the previous CIO resigned.

"They haven't had a lot of continuity so I'm focusing on getting the IT right, setting up an IT steering committee. I've always been quite a restless person and although I get offered permanent positions I turn them down because I like doing this."

Although many interim CIOs take assignments with the largest organizations in the UK, not everyone likes to think big. Adrian Best worked for 10 years at pharmaceuticals giant GSK, but now spends his time helping small and medium-sized firms. "As companies grow they become more complex and multi-faceted," he says. "My job is to take out the cost of growth and help them get back to one process."

Best follows a formula he calls POST, standing for process, organization, system and technology. "Organizations tend to work in silos, so getting the process right is the first objective," he explains. "Technology is the last thing you put in place."

Interim CIOs, like Western gunslingers, might keep moving on, but demand for their services is unlikely to diminish. As long as there is trouble with IT, companies will be looking for a troubleshooter to come in and sort it out.

This story, "Interim CIOs are on the rise" was originally published by CIO.

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