Does the CIO matter?

Back in 2003, Nicholas Carr of Harvard Business School created a stir in the IT world with his Harvard report Does IT Matter?

Putting aside the appalling pun, the title (Harvard is obviously no comedy apprenticeship institution), the essence of the report was that IT was, in reality, the database application, and as everyone had them, the differential advantage of IT to an organisation had disappeared.

In an age where the database application was a commodity, it was no more the differentiation of a business’s activity than electricity — a basic resource.

Followers of this column know that I am one of the few merciless reviewers of these armchair industry prediction peddlars.

If we plot the course of IT since the report, I would contend, Your Honour, that Mr Carr’s case should plainly be dismissed.

In reality the ability of an organisation to optimise web and e-commerce interactions — now central to today’s business and crucial for survival — meet ever more complex regulatory and legal process.

The explosion of social media content and non-database applications around unstructured content are all key to confirming one’s competitive advantage.

Web optimisation alone is regularly lifting sales by 15 per cent, using the same infrastructure, inventory and business model.

So Mr Carr’s is wrong.

However, the fat lady has not yet sung (as she never does in IT) and so last week I heard a new version of the Carr argument.

It goes like this: as all servers move to the cloud, the CIO will need to be good at one thing — negotiating service level agreements (SLAs).

As this is a definable process, the CIO will cease to matter.

Although at first sight this argument has a compelling case, it is falling into the same trap as the good Mr Carr.

It defines the landscape, like so many have done before it, in terms only visible today. It is indeed true that some existing IT functions will become cloud-based commodities and, yes, the CIO’s art will be the SLA.

But innovation will continue, new functionalities will appear, new business models, new ways of working and new forms of data will always be shaking up the market.

The CIO will have to understand these technologies, work out how to relate them to the business need, pick and choose from the candidates and place his or her bets on which ones will succeed.

Whether they are in the cloud or not, some of these new ideas will confer competitive advantage, at least for a while.

Miss them, or get the bets wrong, and the organisation will suffer.

Although delivery may or may not be cloud-based, the explosion of change around non-database information, video, audio, text and social media, combined with the growth in mobile computing, means the options are opening up, not closing down.

Thus the CIO will have to be more, not less, skilled to navigate this shifting environment.

As organisations move to deal with customers online rather than physically, the CIO is more core to business and less in a support role.

As the amount of information around each interaction with a customer or supplier increases the possibilities of wringing out an advantage, by exploiting this knowledge and optimising it the CIO becomes more, not less, important.

As recent events at News Corporation show, an inability to understand your own content in a timely manner can turn a crisis into a disaster and no one is betting the business world is going to become a simpler, more forgiving environment.

Whether it be missing emails or leaked data, or a temporary interruption to the online site’s availability that stops all business for four hours, IT has become not just a commodity, but absolutely critical.

Then think about change, for the known unknowns: mobile strategy, social media on demand, augmented reality and countless other possibilities.

By analogy, just when evolution looked like it had reached commodity status, up pops a change and an abundance of new life forms explodes.

Trilobites had it pretty good, once. At this point, one could get very philosophical about the concept that evolution is about the propagation of information — as indeed is IT — and both certainly function in a model of survival of the fittest.

But both also function in a changing, not static, environment. Sometimes those changes are not even external. Too many successful grazers optimised for a habitat will, in turn, change that habitat.

So, today’s CIO faces a different type of challenge — how to adapt to the times, environment, innovations and developments in order to stay on top of the game, facilitate growth and protect his or her organisation.

This adaptable, insightful, resourceful CIO is not an endangered species at all, but organisations that don’t understand the CIO’s importance are.

Mike Lynch is the founder and CEO of UK software company Autonomy