Who Controls the Tech Project Purse Strings?

By Baselinemag  |  Posted 2006-03-02 Email Print this article Print
 
 
 
 
 
 
 

Most of the time, the ultimate decision about a big information-technology project isn't the CIO's call.

On Baseline's Top 10 Projects in 2006 survey, 62.7% of respondents said business executives—up to and including the CEO—get the final sign-off on the "most critical" technology projects. Meanwhile, just 16.3% said their company's CIO has the final stamp of approval.

Does that mean most CIOs lack clout? Not at all, says Mark McDonald, Gartner's group vice president in charge of executive programs. He argues that an increase in boardroom-level sign-offs on big I.T. projects is "a signal that there are fewer 'technology-only' investments ... rather, there are business or I.T.-intensive investments that need to be approved at the enterprise or corporate level."

Note, however, that CIOs in larger organizations seem to have more autonomy. In our survey, 23.4% of those working for companies that spend $10 million or more annually on information technology said CIOs have final sign-off on major projects, compared with 12.8% for organizations that spend less than $10 million on I.T.

And, in practice, major technology decisions often are made by an executive committee, not a single person. Norm Fjeldheim, CIO of Qualcomm, recalls that when the wireless communications equipment maker was weighing enterprise resource planning packages from both PeopleSoft and Oracle in 2004, the steering committee couldn't reach a unanimous decision about which one to pick. Either enterprise resource planning system would have required a significant investment. "There were pros and cons with both of them," Fjeldheim says.

Click here to download a PDF of the print versionof this story, including more details and charts of spending priorities and who's making the spending decisions.

Qualcomm CEO Paul Jacobs, who was president of the wireless and Internet group at the time, was the deciding vote since his division was directly involved in the project. He opted for Oracle as the better strategic partner.

"You need the CEO to say, 'Here's what's most important to the business,'" Fjeldheim says. But he adds: "Most decisions don't reach him—just the critical ones."

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