CIOs For Rent

Outsourcing to temporary CIOs can make project management easier

By Ramin P. Jaleshgari and Jennifer Mateyaschuk

Application service provider Breakaway Solutions Inc. has added a new service to its portfolio: the ability to "rent" a CIO. Its CIO Advisory Service is designed to let small and midsize companies enjoy the expertise of seasoned technology executives.

"Replacing a CIO or hiring one for the first time can be a difficult process, taking up to a year or so," says Janie Tremlett, VP of CIO services at Breakaway. "This way, a company can outsource the function to us and receive one of our four CIOs to work with them on a regular basis."

Companies have several options when outsourcing a CIO: They can choose to have a CIO work on a specific problem, or they can hire the CIO to develop an entire IT strategy. The CIO can be a full-time employee, reporting to the CFO or CEO for the length of the contract, or can work on a part-time, as-needed basis.

Breakaway maintains that its own outsourcing business won't interfere with its ability to make objective decisions for clients of its CIO service. "In fact, our customers see a benefit in our having a services organization because the CIO is backed by a strong team of people in the organization," Tremlett says.

Breakaway has four CIOs for hire, including Tremlett, who ran her own consulting firm prior to joining the ASP. The other three are Paul Warren, formerly CIO of Forrester Research; Drew Natinson; and Pamela James-Sommer. The CIO Advisory Service ranges in price from $50,000 to $300,000 depending on the number of people involved, time spent at the company, and services rendered.

When Rick Bunker came on board as chief technology officer at Internet Capital Group, a startup venture-capital firm in Wayne, Pa., he was faced with creating an IT department, strategy, and implementation plan. Not wanting to spend an exorbitant amount of money to hire an entire IT team while searching for a full-time CIO, Bunker chose Breakaway's CIO Advisory Service.

Missing Elements
Bunker says he also talked to two of the Big Five consulting firms, as well as to some regional consulting firms, but couldn't find what he needed. "These firms were great at saying they could create a database or make an application and integrate it, but they didn't give me the in-depth strategy, planning, and design that I needed," he says. Natinson and a team of three IT employees traveled to all three of Internet Capital's locations and inter- viewed executives to evaluate the company's IT requirements.

"Breakaway was able to establish an IT initiative that incorporated everything from LAN, WAN, E-mail, voice mail, databases, financial, recruiting, and human-resource applications for our business," says Bunker. The team started working with Bunker in May and plans to have Internet Capital's IT infrastructure in place by year's end. Afterward, Bunker says he'll use Breakaway's CIO service as well as its application development and outsourcing offerings to create more applications and a database of the company's investments. Bunker has since hired a director of IT to work closely with Natinson.

Other companies are also turning to temporary CIOs. The Related Cos., a property-management firm in New York, hired Adam Yahre, a contract CIO who is on call full-time but works mainly on specific projects. Michael Brenner, Related's CFO, says filling his company's top technology spot on a contract basis has been beneficial because Related isn't as technology-dependent as other companies, so there's little or no need for a full-time technology chief on staff.

Yahre, who secured the position on his own, manages Related's 10-person IT staff, which in the midst of rolling out an accounts-receivable package to 110 of Related's remote property-management sites. Yahre does most of his work remotely from Tampa, Fla., spending a part of each month working at Related's New York offices.

The reasons companies hire temp CIOs are many, but why would executive-level technology professionals hire themselves out as contract workers? Yahre says this kind of arrangement lets him spend time on other technology projects, such as starting his own business. "It's an attractive circumstance for someone like me who has been in executive positions but at the same time hopes to be an entrepreneur." Yahre's startup, Tampa-Bay Systems, develops template-driven, Web document-management systems and tools.

Another draw, Yahre says, is that keeping his hand in as a CIO lets him gather knowledge on how technology and business functions work. "Related is a fairly complex organization with business needs that I wouldn't be exposed to and learn about if I was in a glass house developing software all day," he says. "In the end, working for Related helps me learn how to run my own business."

Analysts say hiring temp CIOs is akin to the trend in recent years of bringing in CEOs on a contract basis to turn around business processes or jump-start strategic initiatives. "This is exactly like the trend of CEOs hired as turnaround artists," says Julie Giera, director of research for IT services at Giga Information Group. "Seeking CIOs as contract workers to help with specific problems is a natural evolution."

Giera says businesses of all sizes are candidates for temporary CIOs. A large company, for example, could use such an executive for a large implementation with definitive time frames, such as an enterprise resource planning application, while midsize companies and startups might hire a temp CIO to lead them through a strategically sensitive time.

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