The dreaded Y2K date is a month away. For more than four years the problem, its dire consequences, the remediation dollars spent and who was and wasn't compliant were grist for the IT press mill. Seminars abounded. Cobol programmers got rich. The issue captured the attention of mainstream media throughout 1998 and 1999 and we were subjected ad nauseum to stories about planes falling from the sky and bunker mentalities. Come January 2 -- if we survive it -- what will replace Y2K as the new priority?
That's exactly the question I put to some of Australia's leading CIOs in a survey sponsored by Computer Associates. Once the Y2K monkey is off their backs what new pastures will CIOs explore over the next 12 to 18 months? What technologies will they embrace? What problems do they need to resolve? Do they see their role changing and, if they had the good fortune to find a magic wand, where would they apply it?
With the benefit of 20-20 hindsight, most of the CIOs interviewed felt the Y2K problem was a blessing in disguise. For those seeking to update and standardise their IS infrastructure Y2K was a godsend. One CIO described it as a chance to "clean out the cupboards of IT". For the first time, IS was able to capture a complete inventory of all the business systems that underpinned the organisation's operations.
Some CIOs admitted that Y2K activity at their organisations did not really consume systems development resources. After the analysts identified the problem, the work was usually outsourced and the main demands were on business users for testing and debugging. Nevertheless, they acknowledged that some more strategic investments had been postponed. Almost without exception CIOs reported that once freed from the Y2K burden they would focus on e-commerce initiatives. However, it was also clear there were two distinct approaches.
First, for the CIOs in the finance sector, e-commerce was a component in their distribution strategy. It allowed them to be open to their clients 24 hours a day, 7 days a week, 365 days a year. The advent of the new economy was so important for the businesses that they had established e-commerce steering groups chaired by the CEO.
On the other hand, organisations in the manufacturing and distribution industries viewed e-commerce in terms of supply chain management. It streamlined the interaction between companies. It allowed distributors to check the inventory of suppliers. It linked forecasting and production. It optimised logistics and integrated the invoice and purchase order paper flow. For these CIOs e-commerce was the linchpin of the supply chain.
CIOs in the public sector have a foot in each camp. As with their finance counterparts, they saw the customer service implications of the Net. It provided an infrastructure that allowed some services -- for example, motor vehicle registrations -- to be performed in remote locations. These CIOs also saw the workflow implications of a supply chain management approach to e-commerce. In an organisation like the Police Association, intranets and extranets provided the channel for transferring documents through myriad departments, such as the courts, prisons and public prosecutors.
Despite these aspirations, there was general acknowledgement that most e-commerce investments were speculative. No CIO was certain how the Internet would ultimately impact the business; it was still something of a magical mystery tour. St George's John Loebenstein remarked that where we are at present with the Internet is the equivalent of the Model T Ford phase of the motoring revolution.
A significant proportion of CIOs had concerns about a more Net-dependent world. Most recognised that much more needed to be done in areas such as security, robustness and integrity over the long term. A number used the phrase "industrial strength" when describing the need for engineering dependability in the IT environment. Qantas CIO David Burden pointed to an automated online world, without any manual intervention, where reliability was much more critical.
Zero Disruption
The CIOs elaborated on these concerns when asked what caused grief in their day-to-day operations and what long-term problems did they have difficulty overcoming. Many yearned for a world of zero disruption, where they could evolve and replace systems as easily as a light bulb. There was frequent frustration with the fragile balance of today's IT environment. Slight changes to parameters in one place caused unfathomable disruptions elsewhere. Yet the whole dynamics of business were such that upgrades or additions to the IS infrastructure were relentless. One CIO believed his job entailed his walking a constant tightrope.
The CIOs conceded that this was a reflection of an attitude where near enough was good enough in some instances. Many believed there was a need to imbue a quality mindset in the development of IT. The dilemma was the constant battle between a speed-to-market business imperative and doing it slowly and methodically but getting it right the first time. However, many CIOs were keen to reduce lead times between users' specifications and generating system outputs by improving the IT development cycle.
In fact, systems development was a key issue for most of the CIOs. There was a consensus that good project management skills are seriously deficient among the workforce. One CIO mentioned that businesses focusing on operations had a tendency to want to drive things through. In these circumstances companies became transfixed on a delivery date rather than on whether the overall quality of the product was up to scratch. Another CIO lamented how ignorant the recruitment industry was of the significance of good project management skills. Yet another queried why high schools and universities do not educate their pupils in these disciplines.
Knowledge management was also a topic of interest. Concern centred on better harnessing the information an organisation acquired through its business experiences. CIOs were anxious to explore strategies for the management, cataloguing and distribution of business knowledge and how it could be applied for operational advantage.
The other common area of concern centred on the value of IT. There seemed no way to measure objectively the contribution IS made to the business. Even decisions about return on investment are subjective and rarely simple. The result is that many IS purchases require an act of faith by the top executive. For CIOs this entailed long-winded and laborious political lobbying to overcome the sceptics in the business. One wanted snapshots of the effectiveness of IS, over time.
How much of an issue this was for CIOs depended largely on which side of the credibility gap they sat. One group of CIOs was comfortable in the knowledge that their business peers recognised IS as the nervous system of the business. More often than not these CIOs reported to the managing director and sat on the senior executive team. The focus of these CIOs was strategic, looking at how IS could enhance the business going forward.
Alternatively, the other group of CIOs found much of their energy was still spent proving the potential of IT. They suffered from the IS credibility gap. Typically, their business counterparts were operationally focused, with limited horizons. Frequently, they deployed IS tactically for short-term returns. As such, most of these CIOs had responded by addressing the IS infrastructure within the business. They had implemented ERP to integrate the businesses and to provide data consistency for operating unit comparisons. They had standardised the desktop to simplify support and to accelerate problem resolution. In effect, they had laid the foundations and were now looking to leverage these investments for business advantages.
Increased Investment
As the next millennium fast approaches, the dynamic business world of the 90s continues to rule. Aligning IT to the business remains the CIO's responsibility and most agreed that business had increased its investment in IT.
There were few surprises in responses to the question asking what were the business drivers behind IS investments. The most popular choices were operational efficiencies or better customer service. Efficiencies were envisaged through cutting costs or saving time. The business yardsticks for customer satisfaction were measures such as increased revenue per customer, greater customer retention and higher repeat business. The other key business driver for IS investment was its ability to influence business outputs.
In the non-commercial world there is one other variable. This is the political business driver. The volatility of country Australia in recent years has fostered a need "to keep the bush sweet". This has seen call centres and data centres located in provincial cities. It has encouraged the upgrade of network facilities to maintain services in regional Australia. Furthermore, some of the business drivers for e-commerce initiatives in the public sector have been service delivery to remote locations.
The political influence on the public sector was also evident in its strategic planning process. By and large, it was only CIOs from this sector who acknowledged the direct input from customers in the overall business planning process. In the commercial world business units interpreted what they believed their customers wanted. Nevertheless, from then on there was a remarkable degree of similarity in the strategic planning process across businesses. Typically, the business operating units prepared three-year, long-term strategic plans, and IS devised one-year operational or project plans to satisfy these needs. At the same time IS often took a horizontal corporate view to see how IS investments could be leveraged for maximum return across the company.
No Magic Wand
Surprisingly though, when offered a magic wand to turn their aspirations into reality, not all CIOs accepted. Some felt the challenge of bringing projects to fruition or resolving problems was part of the excitement of the job. A number of CIOs dreamed of some objective, indisputable, accurate metric that identified the value IS investments gave the business. Others wanted to shorten the product development cycle. In particular, a common request was to accelerate the evangelical phase when the CIO is convincing the doubting Thomases of the business that a potential investment has merit. The remainder visualised instantaneously completing the IS foundation stones of integration, standardisation and a state-of-the-art network. They saw that this would then enable them to start realising the potential business advantages IS could offer.
Interestingly, when asked what they would like to achieve over the next 18 months, it was noticeable how business outcomes prevailed. One CIO mentioned that he wanted his company to "kick some butt in the e-commerce arena".
Typically, the goal was to help the company achieve its objectives. As one CIO said: "It's not much use running the best IS department in the country if the business is unprofitable." Nevertheless, there was a common factor of operational excellence in the responses to this question. A number of people spoke of creating a world-class robust environment and instilling a quality culture in all IS delivered. Australian CIOs also have to grapple with a special problem in 2000: the GST. Along with business tax reform, local CIOs viewed this sort of work as part and parcel of their bailiwick.
Final comments from the CIOs centred on their role as a manager. For these, building a motivated IS department where people aspired to work would be sufficient reward.
Overall, CIOs recognised their role was changing. Five years ago their focus was largely operational. At that time there was an almost universal perception among business users that IS had failed to deliver on its promises. These users were disillusioned with their IS departments and many were actively investigating outsourcing as the solution to their technological woes.
Since then, most CIOs have invested their energies in correcting the sins of the past. Issues such as standardisation to improve support, replacing ineffective and disparate business systems, and establishing a solid, dependable infrastructure have dominated their thoughts. Today, many CIOs see, or desire, a much more visionary responsibility within their work. They view themselves as change agents. While they certainly believe they need to be abreast of new technologies in the pipeline (see, "Just Tell Me What You Want"), of most importance to them are the business dynamics of their company.
These include questions such as:
¥ How is the business performing against its key performance indicators?
¥ Where can IS improve this performance?
¥ How can IS facilitate mergers or alliances?
¥ Where can IS streamline business service delivery?
¥ What information can IS collate to enhance decision making? and ¥ What can IS do to boost customer satisfaction?
In effect, the questions reflect an increasing maturity in the thinking of the IS profession. Most of those interviewed reported to the CEO and felt that this showed the importance the organisation now gave to the IS function. No one in the top IS positions in this country seemed to aspire to be a white-coated technological guru. Nobody argued the importance of deep technical understanding. Instead, CIOs wanted to be seen as a trusted adviser, acknowledged for helping the business achieve its goals.
At the end of the interviews I was left encouraged that those at the top of the IS industry in Australia are taking us in the right direction. They understand we live in a world where no one owes IS a living. As the information custodian, the CIO has to be able to give his or her business counterparts the information to succeed. This means IS must understand what business wants and determine how to get there.
As we are now on the cusp of the e-commerce revolution, IS is, at last, showing how business can be transformed. Many appreciate we are only at the beginning of this journey.
Woolworths' Stephen Bradley best summed this up when he quoted one industry sage, who believed that business will change more in the next 10 years than it has in last 50. Since this was the era that gave us computing in the first place, one can only ponder the extent of the changes that will eventuate. Still, all of those I interviewed seemed excited at the journey that lay ahead for them in the next millennium.
Going One-on-One
To ensure the sample was representative I sought to interview CIOs from a cross-section of industries to provide some balance to the responses. CIOs I interviewed are:
ANZ Bank -- David Boyles (Banking)
City of Melbourne -- Mike Healey (Public Sector)Finemores -- John Brown (Transport/storage)Lion Nathan -- Darryl Sessions (Manufacturing)Merck, Sharp and Dohme -- Paul Satchell (Manufacturing)NSW Road Traffic Authority -- Greg Carvouni (Public Sector) Qantas -- David Burden (Transport)QBE -- Ian Hannam (Insurance)Southcorp -- Wayne Saunders (Manufacturing)St George -- John Loebenstein (Banking)TabCorp -- Peter Broberg (Recreational services)Victoria Police -- John Purvis (Public Sector)Woolworths -- Stephen Bradley (Retail)I organised one-hour, one-on-one meetings and followed a structured format agreed with Computer Associates. However, I was seeking trends across organisations rather than specific observations.
-- P Hind
Just Tell Me What You Want
While it was clear that none of the CIOs I interviewed professed to be a technocrat, it was also clear that they recognised that certain technologies could provide their organisations with significant opportunities. Rather than specifying the technology, the CIOs tended more to describe the business issue they were seeking to address.
An example of this was the need confronting several CIOs to interface multiple foreign business systems. These could include those of recently merged companies, or else they could be those of business partners or alliances. While CIOs expressed this as a need, only one or two took it a step further by saying they saw a role for "middleware" to act as the bridge between these disparate systems.
In a similar vein, the issue of robustness and uptime was a concern among most of the CIOs. This would seem to imply a need for effective enterprise systems management tools that would enable CIOs better to monitor and fine-tune the running of the IS environment. Again, it was the business problem that was described rather than a specified technology or IS solution.
The increasing evolution of the online world will see an expansion in new technologies to underpin it. Many spoke of using browser front ends in their existing business systems. Similarly, one or two CIOs envisaged adapting the Net portal concept to their information management strategies.
Almost without exception, CIOs embracing e-commerce were conscious of the network implications of a significant growth in this level of business. They recognised a need for establishing bigger communication pipes to increase bandwidth and to improve network capacity. One or two also spoke of the potential of fibre to address these needs. These investments were also seen as necessary to open up the potential of CTI (computer telephony integration) and remote computing. However, there was also a view that the expense of these solutions today held back the adoption of these technologies.
Some of the technologies the CIOs mentioned were industry-specific. For example, broadband TV was seen as likely to open a number of business opportunities in the recreational services and betting industry. Its interactivity would allow a consumer to place a bet or purchase a product through a remote control device while watching TV. One or two CIOs were curious about the impact this would have on traditional business advertising.
The final technologies that are intriguing our leading CIOs can loosely be described as biometrics. This is the use of fingerprints, the voice, or the iris of the eye to provide a unique identifier for a customer. Several CIOs spoke about the cumbersome security offered by passwords, smart cards and pin numbers. They anticipated that if the systems could recognise some of the unique physical attributes of a client there would be faster systems access and a likely reduction in fraud.
-- P Hind
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