The Avenue of Ideas
Innovation and the strategic application of technology to support current activities and permit new avenues to be explored is what delivers competitive advantage to both corporations and nations. It may be up to the world's economists and management gurus to spell out to chief executives and governments around the world the link between innovation and competition, but a lot of the donkey work of making it happen will fall back to CIOs.
Brian Finn, a former managing director of IBM Australia and currently the executive chairman of winemaker Southcorp, is fully aware of the fact. "The CIO should be a catalyst to stimulate the thinking of . . . executives and to help identify areas where technology can bring competitive advantage. To do that, the CIO must develop a clear understanding of the key drivers of the business and must be able to communicate with other executives about business issues," Finn says.
"Information systems can be a key differentiator and attract outsiders - whether they be shareholders, customers or potential merger partners. They can be assessed in some respects in the way that management capability is assessed and can be just as important a consideration in evaluating a company," Finn adds.
Information systems can also support increasingly global structures, the need for real-time information flows, and provide networks that allow staff to work flexibly and remotely, which may prove highly important for knowledge-based industries where retention of key human capital is seen as a huge competitive challenge.
Keith Roscarel, the CIO of the Nine Network Australia, is as keenly aware of the need to be seen to be delivering value as any of his peers. Not only does he work for the ultra-competitive Kerry Packer in the highly-contested television market, he also has a new boss - John Alexander, now in charge of all PBL media operations - who intends to strip about $30 million of costs out of the business while maintaining or growing its competitive positioning.
Roscarel, however, does not see the appointment of Alexander as a source of increased pressure, but rather as a "positive affirmation" of what he was doing in any case, which was to pump up the value within the organisation by providing information systems that can, for example, help drive up advertising yield. As a CIO, Roscarel is a prime example of an executive who is fluent in the language of the business and focused on corporate revenue stream. It is reflected in his attitude to information systems.
"We have always maintained that our projects are a business solution. It would be very rare to have a project for IT's sake. Even for infrastructure we tend to ramp up the business case; the essential driver for infrastructure is the business," Roscarel says. That infrastructure then allows overheads to be cut; drives down the business cycle of an order; supports sales and marketing applications; develops information indicators, which allow executives to better understand the business, and at the same time improves efficiencies for customers and drives more business towards the Nine Network.
Ultimately the purpose of the information systems is to improve the advertising yield, which is Nine's primary revenue stream. The information systems therefore are "more of a value proposition than a strategic proposition", Roscarel says. He does not, however, shy from the need for a strategic vision; but he characterises this as a mentoring rather then a lecturing opportunity. "It is the CIO's role to question, to inspire and to mentor executives about technology for the betterment of the overall company; to identify opportunities in those spaces," Roscarel says.
"Go back to the 1970s when technology was the new kid on the block and it was owned by IT. Whatever came over the partition was what the business had to use," Roscarel says. Today, though, IT has no right to claim ownership of the information systems that are used by the business, he says. Ultimately it is the executives in the business who are accountable for how they perform, so they should claim ownership of their tools and support systems. The CIO's role is more of a mentor, steering the business towards valuable information systems - but ultimately leaving the business to make the decision and the investment.
But Roscarel cautions that a CIO who wants to be taken seriously as a mentor, or even as a change agent within a corporation, first has to ensure that today's tactical information systems are delivered on time and on budget. "That is fundamental," he says.
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