Why You Might Need a Virtual CIO – And Tips on Getting There Successfully

The leadership structure of diagnostic providers varies depending on their size. In some organizations, there is a full-fledged CIO or CTO, while in others there’s a very lean IT organization that may be missing key skills or leadership experience. As business strategies evolve, a change or augmentation of IT skills and experience may be required. The perfect option in these scenarios? A Virtual CIO. 

I’m often in the position to provide positive or constructive feedback in these scenarios. The constructive feedback is that your IT department may not be supporting your business effectively, resulting in lost efficiency, and likely, customers. The positive feedback is that a Virtual CIO is a viable solution, and when done with the right team, is the most direct path to a smooth-running operation and greater profitability.

The question then becomes, are you, or is your CEO, in a position to step back and explore both the truth and the solution?

Inevitably, every single company in our industry comes to this crossroads – maybe several times. Lab owners and managers have a great deal in common with entrepreneurs in any field: An idea is hatched, a niche is spotted, and at great risk you start a company (or perhaps decide to dramatically grow one you’re now a part of). There’s some stabilization, clients are acquired, and key positions are filled. Growth ensues. But now processes that worked five years ago are simply not holding up to the strain of growth and the demands of today’s customers. Reports are coming out that have errors and inaccuracies, causing customer concern. The product is increasingly becoming sub-par. 

And you can only ignore it for so long.

Three Case Studies

When do you need to consider a Virtual CIO? In one example, a CEO and his board of directors was lamenting their situation as they had tried to roll out a new product three times, failing every time because of their IT system. They were at the cusp of throwing good money after bad in hiring yet another software architect to come in and “fix it.” Instead, they brought in our Virtual CIO team to come in an evaluate the situation. It became clear to us that it could not be fixed, and that they were better off starting from scratch with a system that served their needs far into the future. It was a successful turnaround. 

Here’s another example: A successful group of entrepreneurs grew their company into a $45 million-a-year business with 350 employees. They had nine IT people who had built their software in house. As I got involved and spent a year and a half with them, I saw that a Virtual CIO would be their best solution. Their IT people were good but had been hired 14 years ago, when the need was for people who were “jacks of all trades, masters of none.” Typically, they ran on a shoestring budget in the beginning years just wanting to make it through the year, and so building an IT system that would last 5, 10, or 20 years was not on their agenda. So when they hit a growth spurt of 25% in one year, inevitably the haphazard IT system was not able to support their ability to serve their clients. There were breakdowns, system failures, and every day their IT people went to work just to put out fires and dispense Band-Aids. This is where the “Can you handle the truth?” mantra comes in: We got in front of the board of directors, and politely said they were living in the past and were somewhat in denial. We identified what they were good at – they were good at many things – and focused on what was missing. Their adaptation of a Virtual CIO proved to be not only successful, but a cost-savings in the long run.

One more convincing example: We were brought in to help a company whose IT manager had suddenly quit. This person had custom-built software that turned out to be impossible for anyone else but him to support. Placement of a Virtual CIO allowed us to jump into the arduous task, which included downloading all the data from an existing unworkable system, converting it, and replicating in a manner that made more sense to any IT professional. They were able to get through that challenge successfully, and the CEO slept better at night having a strong Virtual CIO team in their back pocket.

The choices for a growing lab business are complicated, especially when it comes to their IT departments: They inevitably explore hiring another IT professional to address growing inefficiencies and problems, or perhaps even a new manager. That costs salary, benefits, and time spent training. It’s a gamble. The advantage of hiring expert consultants with years of CIO experience in this specific field is simple: They can quickly identify problems and can expertly create opportunities to overcome them. 

Also imperative is this: A team of consultants is better than a single consultant. Look for two minds with great, but different, experiences. It’s better to bring in a team of two who offer differing viewpoints between each other who can then, in collaboration with professionals at the company, come up with better options and ultimately the best solution. Through a process of challenging and double-checking viewpoints, you end up with a more robust product, with stronger opportunities to forge successful solutions. 

Discovering Opportunities

After the evaluation of your IT operations, you want someone who will present the “bad news” – or as I call it, the “opportunities to be better.” Problems should be identified, categorized, and prioritized. The solutions need to resonate with the laboratory board and/or management team. Warning: usually the road to being more efficient is difficult. This might involve reducing employees and removing someone who has in the past done a good job, but whose skill set has been outpaced by the company’s growth. Further investment for the sake of the lab’s future will likely be necessary.

So you’re ready to take the next step. How do you evaluate a Virtual CIO for your company? Your Virtual CIO should be taking these essential steps with your business:

Identify Objectives

• Listen and learn to understand company objectives
• Evaluate technology and staffing
• Build a strategic vision
• Ratify a plan of action that will move the technology department and the company towards efficiency and profitability

Implement Objectives and Strategies

• Upgrade staffing if required
• Stabilize IT platforms for maximum efficiency
• Establish communication channels
• Ensure proper tools are in place for successful execution of plans

Follow-Up with Plans for Support, Advice and Fail-Safe Ideas

• Communicate and report progress
• Monitor and make adjustments, supply alternate pathways to success as needed
• Reevaluate progress to allow for course adjustment

Sometimes it is hard for the person running the company to truly understand all that is negatively affecting the company; maybe you don’t see that there is a backlog of 70 tickets in inventory, or you’re not hearing when people say your IT system doesn’t do the work the way a competitor does. There can be a tendency to live in the past – processes, and personnel that were acceptable, or even excellent, when the company was smaller, may not work now for reasons you may not completely understand. But you will, once you put your Virtual CIO team in motion and they get you to a place where you’re pushing forward, not falling behind.