CIO Connect magazine. Summer 2007 issue. "My hardest decision". Written under name of Sue Norris.

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The ability to make difficult decisions under pressure sets good leaders apart from weaker ones, but what's the key to effective decision-making when there is so much riding on the outcome? Is it about comprehensive consultation and deliberation? Or is it more to do with applying speed and urgency - despite the potential risks - and being prepared to carry the can if it all goes wrong?

The biggest test comes when there is no obvious right answer, a situation many CIOs now find themselves in as they attempt to help lead their organisations through transformational change on an unprecedented scale.

With this in mind, we asked five current and former CIOs about the toughest decisions they have faced in their careers. For several that crossroads came during a make-or-break time for the business.

Here's what they had to say…

Name: Amal Chaudhuri

Company at the time: JP Morgan in the US

Position: MD of global systems and architecture

(Current position: President, Chief Operating Officer, SignaCert)

Decision: To outsource JP Mogan's portfolio accounting function
In 1996, Amal Chaudhuri was brought into JP Morgan as CIO to spearhead a major change programme. The organisation's portfolio accounting systems, each over a decade old, needed to be replaced. However, it soon became clear that more radical changes were needed, particularly when JP Morgan later embarked on its merger with Chase Manhattan, bringing further complexity, and urgency, to the situation.
"Extensive research was carried out and a shortlist of vendors identified, but it became clear that the only problem we would be solving by sourcing new systems (at the cost of several tens of millions of dollars) would be that of age," Chaudhuri says. "The complexity of supporting multiple accounting systems would remain, as would the eventual replacement cycle for the 'new' systems."
In a decision that took six years to bed down from the point that Chaudhuri joined the company, JP Morgan outsourced its portfolio accounting activities lock, stock and barrel to a third party - the Bank of New York. "This was the first decision of its kind in Wall Street's history," he notes, adding that $500 billion of managed assets were at stake.
So why was it such a big deal? Outsourcing the activity involved the recognition that portfolio accounting was not a competitive differentiator for the organisation, so the decision has huge political and cultural implications. Hardly surprising, then, that it took a long time to bring this option to the table. The initial agony was simply in choosing the right systems to run in place of the existing legacy systems.
"The difficulty of the decision was compounded by the fact that there were multiple business units involved, the demand for portfolio accounting across markets was growing fast, and the introduction of new products was running well ahead of both technology and operations to support," Chaudhuri explains. "It was not clear, either, whether simply buying technology was going to solve the problem. The level of investment required to stay current was so high that we could not be sure whether the technology vendors, who were all small, would be able to sustain the investment required."

The other option on the table was to outsource the entire accounting function to a provider that would support both the operations and technology aspects of the business.

"What was originally a technology project around accounting system replacement, became an outsourcing project for the accounting function," Chaudhuri says. "This had a major structural impact on the business - essentially returning the business focus to its core competency of managing money."

Reaching the decision, which took a year, involved commissioning an independent study of the state of the industry, sending out RfIs to a variety of providers, and broadening the discussion to include the firm's functional and regional heads, human resources, corporate technology, corporate compliance and, eventually, the board. "Since we would be divesting ourselves of an entire function, we had to ensure that the people in existing positions would have a home in the provider's operations," Chaudhuri notes. (Over 200 people were transferred to the Bank of New York operation.)

For Chaudhuri, the proof that the decision had paid off was when the merged Chase business moved over to the new outsourced platform too. That, and when the head of Fixed Income in London found he no longer needed the analysts that had been employed only because the previous infrastructure had been in such a bad state. "London Fixed Income invests in everything so is a very complicated animal so, when the chief here says he's very pleased, that's a massive plus," he says.

Of course, it wasn't all plain sailing, and the fact that it took until 2002 to bed down the new arrangement (a good two years later than Chaudhuri might have hoped), says something of the hurdles that had to be overcome.

So what did he take away from the experience? "We should have phased the project more," Chaudhuri concludes. "Our phases were too big - 18 months at a time, based around mergers and de-mergers, etc. You really need shorter, standalone phases. And you can't underestimate the people dimension, no matter what you do. In retrospect, we should have added more in the way of staff support during the transition - training, communications, retirement plans, everything. People assume the worst.

"If possible, minimise the number of parallel activities to ensure that your good people have enough time to get the primary activities done. The best decision we made was to pull our best people off the line to focus on the transformational project. If we had not done that, it's unlikely we would have been successful."

Name: Alan Belt

At the time: Goldfish Bank

Position: CIO & operations director

(Current position: Managing director, cards and transformation, EA Consulting Group, a financial services management consultancy)

Decision: Whether to abort a major data migration project that was going off the rails and start again from scratch, with just months to go before the deadline

Alan Belt uses moon-landing analogies to describe his hardest decision. This was made while on secondment from Lloyds TSB to the then new Goldfish Internet and telephone bank, launched by British Gas owner Centrica in partnership with Lloyds TSB.

Belt was assigned to Goldfish in September 2001 to oversee a major business transformation, migrating the organisation's original credit card processing activities from its joint-venture partner Centrica to a new card transaction processing provider, First Data Europe. The move was designed to support Goldfish's plans to offer a broader range of banking and financial services products, available online or via the telephone, backed by an innovative loyalty scheme.

"There was already a blue-chip systems integrator in place who was reviewing the options but, about 4-5 months into my tenure, the situation had become more complex and costly than expected and it soon became apparent that continuing as we were would have required a lot more money from the shareholders," Belt explains. "The dilemma was whether to stick with a systems integrator that the shareholders were happy with and move the timelines or, with just 7-8 months left, rewrite the books and do something radical."

The existing migration schedule was timed just before the busy Christmas period when credit card transaction activity is at its highest. If Belt had missed the November slot, the next window of opportunity would not have been until the following April.

It was at this point that Belt had his 'Apollo 13 moment', flagging the problem. Luckily for him, a newly appointed MD agreed that drastic action was needed. "I got hold of every 'radical' person who knew the technology and put them in a room in Slough for two days," Belt says. "My right-hand man assured me that we could achieve our goals, but that this would mean a brand new system infrastructure and architecture, building a call centre from scratch and building a new business operation!

"It wasn't quite Jim Lovell with a spare sock and a CO2 scrub-up, but we used proven technology and pulled it off," Belt says. "There was just one problem - we didn't have anyone to host the system!"

With the clock ticking, Belt had to make a decision. "I went to the exec with choices, and the radical approach was accepted. It was my decision, so my job on the line - and those of my colleagues." The MD, Ian Peters, stood alongside Belt, putting his own job on the line. "This meant that we were all driven to succeed," Belt notes.

The new systems integrator, Fujitsu, was appointed two weeks later. "We now had seven months to do something that should have taken two years," says Belt of the pressure he was under. Four months in, a power spike took out all the PCs in the new call centre, sending the project back to square one. "But, on November 9th 2002 we hit our deadline and the new system worked and at 2.30pm that Saturday afternoon we sat down and watched England-New Zealand in the rugby!"

For Belt, going live by the deadline with a fully functional system provided complete vindication of his decision. "If we had continued on the original path we were going down, we would have faced customer services issues and financial challenges. We had to take a radical decision, as the other way was too complex and could have involved writing a blank cheque."

Twelve months after the project had been successfully delivered, Belt and many of his colleagues now work within the business transformation and card solution business as EA Consulting, where they are putting their experience to good use for others in a similar boat. So what lesson did Belt learn above all? "Don't shy away from what you believe is right," he says. "The easy decision is not always the right decision. Confidence in yourself and your team's abilities is key."

Name: Alastair Behenna

Company: Harvey Nash

Position: Global CIO

Decision: To take IT off the business agenda

Concurring with Alan Belt's conclusions, Alastair Behenna, CIO at international recruitment firm Harvey Nash, says he has learnt the hard way that seemingly 'easy' decisions can stay around and haunt a CIO for longer than difficult decisions.
For Behenna, the decision that has had the most painful ramifications was the one he took comparatively quickly - to remove IT from the business agenda. This was soon after he joined the company six years ago.

He refers to the resulting situation now as the 'Baggins Paradox' (in reference to The Hobbit). "This decision has spawned a legacy that haunts me to this day," he admits. "Every meeting I attended had IT failure as a significant agenda item and the department was demonised as a major chokepoint to business progress. Some of this was fact, but a far greater part was perception as there was no 'championing' strategy in place. The result was far worse than sheer physical failure. IT, in the minds of the business, was awful but, more destructively, this was affecting the morale of the IT staff who felt they were failures. This, in turn, had become a self-fulfilling prophecy."

After putting in place some 'stabilisation' measures, Behenna concluded that the solution was simply to remove IT from the agenda by putting out the fires of discontent and in the background, quite invisibly, building an infrastructure and team that would deliver world-class service.

"This was such a successful strategy that we are now off the agenda entirely and almost invisible to the business as a whole," he remarks, agreeing that Nicholas Carr had it right when he wrote 'IT doesn't matter'. Once the business comes to see IT as any other utility, it stops being the focal point and loses value in the eyes of the business.

"But if you aren't on the agenda, you don't exist and you don't get heard," Behenna complains. "Thus the Baggins Paradox. Slip the One Ring on and become invisible to your enemies - an excellent result until you suddenly realise your friends can't see you either."

With innovative projects planned, including Web 2.0 (second-generation Web)-based services such as blogs, wikis and communities of interests, Behenna needs the backing of the business. "Everything is changing in our world and we need to be right at the cutting edge." So what's his strategy? "To drive more engagement with the business, through a guerrilla marketing campaign! We also need to find a way to quantify the value of IT to the business - for example, figures that show what money we've made through the web as a channel. Perhaps we need to crash some servers to get some attention…"

Name: Dan Wagner

Company: Global Crossing

Position: CIO & executive VP of enterprise services

Decision: Identifying the role the IT organisation would play in helping Global Crossing through its business restructuring process following bankruptcy

In 2001, amid great publicity, telecoms firm Global Crossing filed for bankruptcy, owing $12 billion. In the aftermath, the IT organisation found itself having to do more with much less. Bravely, it determined to do more than just keep the existing systems running. With an extremely tight budget - just 2% of revenue - CIO Dan Wagner decided that the only way forward was to be bold in everything his department did: "We were, and it's been successful," he says.

"This was a very difficult decision because we had to look within the corporation to cut costs," Wagner explains. By working heavily in conjunction with the various business leaders, the IT organisation was able to support a 75% reduction in headcount, a 57% reduction in operating expenses, a 74% reduction in provisioning cycle time, and an 80% response-time reduction.

As a result, the IT department proactively implemented a comprehensive systems overhaul and delivered 'remarkable' improvements in critical business processes that have been credited with successfully restructuring the company, Wagner says. "Customers report increased levels of satisfaction, too - among the highest in the industry," he claims.

Wagner and his team have also transformed Global Crossing's global IP network company into a global software-powered services company by creating an 'operational support system'. "This differentiates the company in operational efficiency, service creation, user empowerment and revenue generation," he explains. "Rather than just supporting platforms that assist the inter-operations of the business, IT functions are now broader and establish an automated factory that allows customers and partners to interact directly with our back-office systems and services.

"Simply put, the role of IT was transformed from back-office support, to key implementer of the corporate strategy."

Perhaps the biggest lesson Wagner has taken away from the experience has been that, for IT to become a vital and integral part of an organisation, it has no choice but to interact directly with the leaders of the organisation and its customers. "With direct leadership support, the IT function can be transformed from merely an internal operations process to a driving force of change and innovation," he concludes.

Name: David Bason

Company at the time: A global metals distributor in the aerospace sector

Position: CIO

(Current position: IS director at Shoosmiths, one of the UK's fastest-growing national law firms)

Decision: To outsource the entire IT department

During 2001 and into 2002, as CIO of a global metals distributor in the aerospace sector, David Bason and his team were well into the global roll-out of SAP. External consultants had been used for the first part of the business, while an internal team had been trained for the remainder of the roll-out.

After almost two years, Bason was in a position where he had established a team with excellent all-round SAP experience, particular areas of expertise that were rare in the market, and business knowledge that would be essential to the future growth of the company.

But, as an SME metal distributor, the company found itself unable to compete with the salaries and opportunities presented by larger multinationals and consultancies, so Bason's department started to haemorrhage its key staff. "This presented a substantial risk to the business," he says. "The successful implementation of SAP across the firm was seen as key to winning a contract to supply the new super Airbus contract and virtually doubling the turnover of the firm."

Taking a gamble with his own future, Bason proposed outsourcing his own department - with the sole objective of staff retention. "It was a bit like a turkey voting for Christmas," he says wryly.

Bason helped the board to identify an organisation that could provide a career path for his staff while securing the continued roll-out of SAP. "The staff were consulted extensively and were involved in the selection of the managed services company," he notes. A contract was then structured which explicitly reflected the company's objectives.

After an extensive search, he found a company with a close cultural fit, he says. "All of the staff and I transferred to the managed services company. There, they had improved benefits and significantly better career opportunities, and the firm retained the key resources at no additional cost."

Effective communication was key to this successful outcome, according to Bason. "Communicate with your staff at all times," he advises, based on his experience. "Involve them in the decisions that affect their future, and obtain their support.

"Be brave," he adds, recalling his own decision to make himself redundant. "However unlikely it may seem, it is possible to meet the both the interests of the organisation and the individual."