Dealing with CIO Reality

Today’s abundance of compelling technology means even software vendors with great offerings won’t win deals if they can’t manage the "soft factors" of selling.

By Mike Nevens, Retired Managing Partner, McKinsey & Co.
High Tech Practice

Pity the poor CIO. The IT budget is flat, slightly up or, more likely declining a bit. Only 5 percent to 20 percent of the IT budget is available for new projects. The rest is consumed by operations, support, maintenance, business continuity and the like. Of that small slice available for the "new, new thing" a big piece is driven by security, pressures for mobile access and helping the business comply with Sarbanes-Oxley, HIPPA, Basel II and other regulatory mandates.

The CIO of one of the largest retail banks in the US recently told me that he has about 60 new projects under evaluation. About half of them will pass technical, functional and investment hurdles. He will then fund 4 to 6 over the next two years.

That means that 25 or so projects that meet all objective criteria will not go forward.

Software vendors and investors need to understand and deal with this reality.

2 Global Tech Events Next Week

The Silicon Valley Indian Professionals Association (SIPA) annual event on Saturday, Nov. 12 in Cupertino, Calif. The one-day gathering will focus on the dramatic market shifts and opportunities created in the area of technology-enabled services. Sand Hill Group’s M.R. Rangaswami will moderate a software-as-a-service panel with four leading CEOs - Joe Kraus of Jotspot, Zach Nelson of Netsuite, Umang Gupta of Keynote Systems and John Roberts of SugarCRM. Visit www.SIPA.org to register for the event.

On Thursday, Nov. 10, the Israel Venture Association (IVA), a consortium of Israeli VCs, will host the High-Tech Venture Capital Conference at the Santa Clara Marriott — the first time the event will be held on the West Coast. Speakers include H.E. Daniel Ayalon, Ambassador of Israel to the U.S. and a variety of prominent VCs and press. The event will include an overview of the Israeli VC community and a variety of investment opportunities. Click here to see the complete schedule.

Governance for the Governance Vendor

Last week, upstanding software citizen Mercury Interactive replaced its top executives in response to allegations of improper stock dealings. Tony Baer of onStrategies takes a look at what it means for customers and what it means for the company in this week’s post to the SandHill.com Blog on Software Intrigue.

Share your insight on the software business. Email editor@sandhill.com with your submissions to the SandHill.com Blog.

New Executive Positions Available

A new crop of software executive searches from executive recruiter Sterling Hoffman is available on the SandHill.com job page. SandHill.com receives visits from tens of thousands of veteran software executives every week. Post your job on the site and reach the Web’s most qualified pool of candidates. Visit the community page and click on ‘Want to Post a Job?’

Poll: Oracle Adrift?

CFO Maffei resigns after just four months. What does that say about Oracle?
Take our Pulse Poll >>

Last week, SandHill.com visitors speculated about whether a forecasted rise in IT salaries is good news for the technology industry.
Give your opinion and see the perspective of SandHill.com visitors >>

More at SandHill.com:

Geac and FrontRange targets of LBOs.
Read the most important enterprise software industry news of the week >>

Akimbi Systems receives $8 million.
Monitor the latest software venture capital deals >>

IBM buys iPhrase Systems.
Size up last week's software M&A deals >>

Mindjet appoints Eric Borrmann as CFO and Richard Barber as VP of Engineering.
See who’s made it to the top in our list of recent software executive appointments >>

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Parting Thought

"A real leader faces the music, even when he doesn't like the tune."
— Anonymous

Courtesy of Malcolm Kusher, The Kushner Group