CIO — Jeff Orton’s 1997 promotion to CIO and vice president of logistics at Wilsons the Leather Experts wasn’t the smooth transition he had hoped for. No one had heard of an IT guy, one without logistics experience no less, running a supply chain organization?particularly for a company as large as the $720 million a year Brooklyn Park, Minn.-based apparel maker. Not surprisingly there was resistance, typified by a lunch meeting with a supply chain management vendor Orton wanted to replace. The vendor listened as Orton described his plan to expand Wilsons’ supply chain system from the point of sale to the manufacturing floor, and his concern that the vendor’s flow of goods software wasn’t robust enough to handle the increased information load. Rather than explain how the software could help, the vendor insisted that the problem was Orton’s logistics ignorance. "It was years ago, and I still get mad thinking about it," says Orton. "I may not have had logistics experience, but I am a good businessperson."
The redesigned supply chain has been in place for four years now and has saved Wilsons millions?a far cry from the spectacular failure the vendor predicted. Skeptics may call Orton’s success in wearing both hats a fluke, but the fact that other companies are tapping their CIO to head up the supply chain suggests that the idea has merit. And this faith in the CIO as a business process leader as well as an IT chief is yet another indication of the increasing role that CIOs are playing in central business decisions.
The dual role makes sense because the supply chain is the most technology intensive part of many companies. In the old days, retailers bought something for $20 and sold it for $40?the classic markup. Today many retailers can mark up their goods only a fraction of that. Profits require bulk sales and an efficient supply chain. Good automated systems are the best way to keep track of and manage the entire process, from the ordering of raw materials to manufacturing, shipping and delivery.
In essence, IT has become the driver for those businesses, and the CIO understands IT better than any other top executive. As the role of IT in a company grows, so does the CIO’s strategic importance. The quintessential example is ERP applications, the colossal software packages that provide a common system and data format for every department. An ERP rollout touches every part of a company, often connecting all previously existing systems. The result is that CIOs not only become familiar with how other parts of the company do business, but in most cases they actually redesign the business processes to work with the enterprisewide system.
