The Epicentre of Competition
Dane Anderson, the Hong Knog-based vice president of consulting and IT research for analyst IDC, claims that IT is now the "epicentre of competition" for most sectors. That factor, combined with technology's ever-increasing orbit beyond the back office and the improvement of technology support, is altering the CIO role.
Anderson says that if an organisation is intent on using information systems to make it more competitive it must "require CIO accountability for achieving improvements in business processes". This must be in tandem with another significant shift: no longer can business identify an information system it needs, throw the specifications over to IT, and then take delivery of the finished computer system. Rather, the business unit has to be made accountable for the success of the IT project. And, he notes, CIOs who really are able to boost competitiveness will have to take on more of a consultancy role within the corporation, rather than "thinking you can do everything yourself".
To really deliver value, the CIO has to focus most of his or her efforts on converting IT investments into business value. That said, although the CIO must establish IT priorities and building and maintaining information platforms and architectures, the legwork ought to be delegated. CIOs ought not to be cutting code.
"Too many CIOs remain focused on the technical minutiae," Anderson says, an issue he considers as potentially career limiting, especially as corporations become less dependent on in-house technologists and more enamoured of third-party service providers such as EDS and IBM GSA. Ultimately Anderson believes that many of the CIO's current responsibilities with regard to IT strategy will be taken on by CEOs as they become more IT-savvy. But he maintains that there will always be a need for a senior executive "who understands how to [act as the] bridge between the company, the IT department and external resources".
SIDEBAR: Adding Real Value
Paul Rizzo is Dean of the Melbourne Business School. His migration into academia comes after a long and varied business career. Most recently Rizzo served as CFO of Telstra for seven years. Prior to that he was the chief general manager of retail banking with the Commonwealth Bank of Australia, and before that CEO of the State Bank of Victoria.
Given his unique perspective on corporate values, CIO magazine asked Rizzo how a CIO might add real value to an enterprise, above and beyond supplying information systems that allow it to run efficiently from day to day.
CIO: When you ask a CFO how he has added value to a business he can point to the balance sheet. But how can a chief information officer demonstrate what he has achieved?
Paul Rizzo: Value is best seen in two areas: having information and technology that enables strategy and product development which is ahead of competitors; and the provision of accurate and timely core information.
CIO: How well does business understand how much value can be added to an enterprise through well-constructed, well-run and efficient information systems?
PR: The concepts are well recognised but the deficiency is in capturing and using the actual advantages.
CIO: How can a CIO make a business more attractive to an outsider? For example, more valuable as a takeover target.
PR: Through having a demonstrable track record of success in using management information for strategic gain and operational excellence.
CIO: Ought a CIO to be content providing IT solutions to support the business, or actively work to change the business to make use of technology's potential?
PR: Clearly, the latter; the first is a passive role.
CIO: How best can this be achieved when there seems to be a continuing antagonism between CEOs and their CIOs, with neither claiming to speak the language of the other?
PR: A key is for the CEO to create a supportive climate for excellence in information management, and for the CIO to be seen to actually deliver.
CIO: From your unique vantage point, how has the CIO role matured in Australia and why does the CFO continue to exercise more clout still than does the CIO?
PR: The CIO role has matured largely because we are in the information and technology age. But, the CFO continues to dominate because the role is the only one after the CEO that has a full company-wide perspective and is the window for the market into the company. I don't see real difficulties in the current relationship.
CIO: Do you see a time at which CEOs will have to be as astute about their technology dealings as they are about their financial operations - or risk being accused of failing in their duties?
PR: Absolutely, as more CEOs succeed or fail on the back of their technology.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.