Does demand for interim CIOs spell new era for IT leadership?

As companies race to complete critical short-term projects in the midst of economic uncertainty, should CIOs consider contracting amid increased demand for interim CIOs?

As companies race to complete critical short-term projects in the midst of economic uncertainty, should IT managers consider contracting as demand for interim CIOs increases?

According to research by IT recruitment firm Computer People, the average pay for an interim CIO is now £96 an hour – an increase of 10% compared with last year and up 4% between October 2011 and November 2011 alone.

The hourly rate could rake in more than £160,000 a year, working seven-hour days, five days a week, for an average of 48 weeks a year – that’s more than double the average salary for permanent CIOs and IT directors (£76,549 a year).

Short-term IT managers popular with tech firms

An Interim Management Survey 2011 report released earlier this year showed the technology, IT and telecoms sector was one of the largest industry sectors using interim managers.

Sid Barnes, executive director at Computer People, said this is a direct result of demand from organisations for interim CIOs to finish off short-term projects and shape long-term strategy.

 “Organisations are realising that long-term strategic change starts at the top and with the right people in position,” he said.

“As such, the interim CIO who has a proven track record in change and implementation is in huge demand. This demand has steadily been increasing throughout the year as organisations realise that long-term change must start now, regardless of the uncertain economic climate,” he added.

Barnes said the increased demand for contract work will focus attention on maximising efficiency, driving better value and achieving short-term goals.

“The CIO should be a critical part of the executive board as it is their responsibility to position the business so that it can achieve its wider objectives,” he added.

CIO recruitment on the rise

Barnes said the overall CIO recruitment market is experiencing a surge. According to Computer People research, the average salary for permanent CIOs and IT directors is now £76,549, up 4% year-on-year.

In comparison, overall permanent and contract IT staff salaries increased 6% and 5% respectively as businesses hired in staff to complete critical projects. 

However, the CIO role is now taking precedence over recruitment for other roles within organisations.

Gary Stewart, founder and director of IT professional services firm Xceed, said businesses are relying on CIOs to maintain competitive advantage.

“IT is an essential part of almost every business, and in today’s economic climate, organisations are increasingly looking to IT to help them address efficiency and cost issues. As businesses continually upgrade, integrate and restructure their IT, it is becoming clear that today, more than ever, organisations are turning to CIOs to give them a competitive advantage,” he said.

Highly effective, highly paid

But interim management could be the most popular way businesses turn to CIOs.

Upgrading, integrating and restructuring projects may be better suited to an interim IT manager role. A permanent CIO may not be best placed to make unpopular changes, which inevitably lead to staff disruption and job losses.

One interim CIO told Computer Weekly: “You get things done if you’re an interim. You have to acknowledge internal politics, but it doesn’t affect you in the long run. Companies pay interim CIOs an average of £1,000 a day, up to £1,500 a day, so they won’t waste time not listening or acting on CIO advice, or they’re wasting money."

There is currently a “scramble” for interim heads of IT. “The phone rings from agencies every couple of days. Back in the summer, you’d be lucky to get any calls," he said.

“However, part of working as an interim CIO is accepting downtime and free consulting. Interim CIOs typically only spend 60-70 days a year working,” he added.

Others expect the spike in demand for part-time CIOs to be a longer-term trend.

Tony Perks, founder of 2CiO, said on his website that hiring a full-time CIO or IT director can be too costly for many medium-sized businesses, commanding up to £250,000 per year in salary to provide the IT strategy needed to drive business goals.

He said a “part-time” CIO can be hired “at a fraction of the cost”.

But the focus should be less on "how" and more on "what", according to Colin Beveridge, a former interim CIO and principal analyst at Freeform Dynamics.

“Price is usually a function of supply and demand. It is also a distraction, however, because the fundamental questions are all about delivered quality and value, not the cost,” he said.  

While cost may not be important for all organisations, economic uncertainty has cemented the significance of the CIO to organisations to drive business targets and remain competitive. However, as cost-cutting remains prevalent for businesses, the interim or part-time CIO may become a more and more common occurrence – and a good opportunity for IT leaders.

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