The CIO at a midsized utility company was facing a soft economy and a massive investment in a regulatory compliance project. So she decided to free up some budget funds by slowing down the rollout of an enterprise software suite. The saleswoman from the enterprise vendor, seeing her commission at risk, quickly mobilized the political resources of her firm to launch a CEO-level "lunch and letter" campaign against the CIO (who asked to remain anonymous).
The campaign was designed to create the impression--in the minds of the CEO, CFO and select members of the utility's board of directors--that the CIO had made the wrong choice. At this point, the CIO realized that she and her software vendor had a different definition of the word "partner."
This story ended well, however. Unlike many CIOs, this one had invested time in building good personal relationships with a broad constituency of business colleagues, so the vendor's effort to outflank her backfired. The other company executives were so incensed by the vendor's shabby behavior, in fact, that they're considering dumping this supplier for another and have considerably slowed down the product rollout.
Political threat is only one of several significant risks--financial, operational and technical--that enterprise software carries for top IT executives. As Vince Campitelli, senior vice president and chief IT auditor at Charlotte, N.C.-based Wachovia Corp., puts it: "Software equals risk. It is that simple. The question is, how do you manage that risk?"
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