Moving Past Old Technology to New Value

CIO Executive Council — As CIO, you are out in front of your company, thinking through trends in market conditions, technology innovation and customer behavior. Sales and marketing leaders are out there with you. But unlike them, you are tethered by the cement footprint of data center, hardware and software choices made in a different computing age. Those decisions weigh heavily on how flexible, scalable, innovative and cost-effective you can now be.

“Our sales and marketing teams’ heads are swimming with ideas about how to accommodate the digital consumer, but we’re living on a legacy servicing system,” says Daniel Priest, CIO of Toyota Financial Services. “Their ability to imagine what’s possible far outstrips our ability to accommodate them.”

And so it seems we have stumbled upon a new paradox: archivist versus futurist. Below are some CIOs’ tactics.

Don’t maintain Band-Aids. “CIOs used to split their focus between running and transforming,” says Priest. “We need to split that transformation piece in two: the workaround short-term fix and the long-term, large-scale transformation.” Priest’s team recently issued iPads to their sales execs, but the platforms Toyota is currently using are not designed to work with those devices. As a workaround, the team virtualized the desktop, giving iPad users access to all the company’s applications. Priest knows this fix can’t be permanent. “The long-term solution should be more modern platforms designed for modern devices.”

Be a market expert. “I cannot think only about technology; I need to be thinking about the business,” says Priest. When leaders make urgent requests for technology innovation, Priest relies on his own market knowledge to pace those investments. “If I understand our market dynamics, I can be a voice in how we invest and show them that they don’t need it all right now.”

Manage your portfolio. “Most organizations are a palimpsest of one-off decisions, made by people who are no longer there,” says Leslie Jones, CIO of Motorola Solutions. Before you attempt to balance the past and the future, “you must know exactly what you have: every application, what it does and who it impacts.”

To manage this, you need a rock-solid portfolio process, says Jones. “At Motorola Solutions, every single thing we do, every project, every dollar, every person is in the system.” This allows her team to create an array of what-if scenarios to manage customer demand.

So, how do you build a portfolio-management system that everyone uses? “This will take several years of unrelenting hard work,” Jones says. “This was an internal IT goal that we did not talk about publicly until we had results to share with our business partners.”

Embed IT in the business. Communication is critical to managing this paradox, so many CIOs are adding relationship managers to the IT team. The key, says Stephen Woerner, chief integration officer at Constellation Energy (CEG), is to fully embed those people in the business. “We have centralized infrastructure and architecture teams, but the rest of IT reports to the business,” he says. Constellation is currently replacing a customer care and billing system in one of its operating units. “This is a process-improvement project that happens to have a software component,” says Woerner. “Having IT in the business shifts us from department thinking to an enterprise view.”

To make the embedded IT model work, says Woerner, tie IT executives’ compensation to the P&L. “I collaborate with the business unit leader on performance review and compensation for IT staff,” he says. “Compensation ultimately rolls up to P&L.”

Martha Heller is president of Heller Search Associates, an IT executive search firm, and is a co-founder of the >CIO Executive Council. She can be reached at martha@hellersearch.com.