Why are CIOs who anticipate the future rarely allowed to do anything about it?

Esty Scheiner was especially frustrated, even for the CEO of an AI startup. Her team had figured out a better way to deliver deepfake audio detection and met with various IT groups at key enterprises. Most agreed this is going to be an issue that needs to be dealt with — and could use Scheiner’s software.

But since the deepfake problem is months, maybe a year away, Scheiner’s company couldn’t get the backing to do anything about it.

Therein lies an IT problem I’ve seen in just about every vertical. 

It would be easier to accept if IT pros were routinely caught offguard by opportunities or problems they didn’t anticipate. Alas, that’s not the case. To be blunt, IT decision-makers in the US often see the train charging down the tracks, but they’re not permitted to do anything about it until it’s pulled into the station and crashed.

Wall Street’s obsession with quarterly earnings has made it extraordinarily difficult for most enterprises to spend on long-term investments or even mid-term investments. 

The United States isn’t the only country that enjoys such short-term IT vision, but we are competing with lots of regions where corporate leaders actually like being prepared. “Some European countries are way more proactive. America is much less prepared,” said Scheiner, the CEO of Shiboleth AI

The exceptions, sadly, prove the rule. Apple in February rolled out a new security approach for its messaging platform, its version of post-quantum cryptography. (To nitpick, it’s certainly not post-quantum. It’s not even trying to be post-quantum. At best, it’s designed to work well in an age of functional quantum systems, not after that period.)

But the point is that quantum is not yet here and yet Apple has invested in something designed to counter it. Yes, Apple was acting as a vendor and not an end-user, but let’s admit that no one else has even gone that far.

Realistically, I get why proactive IT can be so challenging. CIOs will say, “We want to be aggressive and proactive, but the bean counters such as the CFO and the CEO won’t let us.” And the CFOs will counter with something like, “Nonsense. We have given the CIO millions of dollars in their budget. They can choose to spend it on forward-looking investments if they so choose.”

Both arguments are true, but the CFOs are not offering the proper context. IT budgets are woefully underfunded. When a CIO can’t afford to deliver items that are scheduled to go live in three days, there is no way he or she is going to spend for the future. If the enterprise wants to keep operations running smoothly, it needs to sharply boost IT spending. 

Ultimately, this is likely to involve SEC filings and shareholder litigation. When your people have to document known risks, they are eventually going to have to list all of the issues the CIO knows about but can’t fund. And when rivals move more quickly, how do you think that will likely go over? 

This problem is not new. More than 13 years ago, I wrote about Amazon getting beaten up by Wall Street when it had the audacity to invest in IT long-term. 

In some cases, the problem is less about budgets and more about perceptions. In Scheiner’s case with the AI deepfake audio problem, she said some executives looked at such fraud efforts “as social engineering and therefore saw it as a training problem and not a technology problem.” Others focused on anecdotes about staffers being tricked into thinking the CFO had signed off on a money transfer. Those people saw it as a controls issue, as in “Why was the CFO allowed to make that huge-dollar transfer with no one else signing off?” — not an IT matter. 

As much as finger-pointing is a cherished American business tradition, when it undercuts a business’s ability to function and to be competitive, it ceases to be fun.

This is a matter of priorities. Enterprises seem to have no problem investing in today’s bright shiny object (hello, large language models), but when it comes to preparing technology for a future we all know is coming, there’s suddenly no discretionary money. 

CIOs need to dip into their persuasiveness. Making the case to the board and the CEO is fine, but that often doesn’t work. Instead, make the case of what lies ahead to every line-of-business chief you can find. Put more bluntly, convince the division chiefs who deliver revenue and the CFO and CEO will listen.

Copyright © 2024 IDG Communications, Inc.


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