by Christine Hodgson, Capgemini

The CIO role turned upside down

Jan 26, 2011
Data CenterIT LeadershipIT Strategy

Until very recently the focus for many CIOs has centred on automating internal processes with the aim of reducing costs and improving operating effectiveness in largely stable markets. Today many aspects of those markets have changed.

The enterprise focus for using technology is shifting towards external goals that can lift revenues, market share, and margins – and lift them with the extreme rapidity required by the CEO.

The new focus is on working with people from across the organisation, communicating and collaborating with them to understand and satisfy their information needs, and getting organised to keep pace with them — even the ones demanding instant results. For many CIOs, this requires a new approach to working with users and a fresh look at their technology.

It is also important to acknowledge the increasing number of complaints from many people that they are less well supported by IT at work than they are at home. As a result, when faced with a new project they will often use their own resources, rather than rely on company applications to get the data they need.

If people want to find the right holiday destination, restaurant, music or car, they know they can get all the information they want wherever they are. But that’s not happening at work, which is why increasing numbers of employees want to use their own equipment and applications in the workplace. And for the CIO that is both a challenge and an opportunity.

The situation is reminiscent of the early 1990s, when many CIOs embraced client/server and ERP solutions to regain order in a corporate environment threatened with anarchy by the uncontrolled spread of the PC in the late 1980s.

This time around, however, the stakes are higher, for the CIO and for the enterprise. We can see clearly that in market after market, it is the companies with the traditional internal focus — on costs and efficiency — that are falling behind.

Success increasingly depends on two things: a strong external focus to reveal what opportunities are bubbling up, and the agility to respond rapidly and cost-effectively to those opportunities. And the hard truth is that these are the things that are often poorly supported by traditional corporate IT.

Not surprising then that many senior managers, in sales, marketing and procurement, have tried a go-it-alone approach, perhaps using their corporate credit card to buy instant services via the cloud, despite the risks non-professionals take when plunging into the IT world.

Far better, surely, for the CIO to forge stronger links with department heads across the business and collaborate to give them what they need. And that will often mean being more open to trial and error, and more able to stop as well as start new initiatives. It also demands CIOs who are willing to develop their knowledge of all aspects of the business including products, markets and customers as opposed to the historical focus on financial processing.

Many surveys have shown that old-style IT is good for big projects but poorly attuned to providing instant support for those new products, new markets and new ideas that inevitably start small but are the real key to future growth and success.

Indeed for the CIO in a typical multinational, the sheer weight of the legacy portfolio can be a big resource barrier to taking on any new challenges. After all, it can be tough to find the money and the people for any kind of innovation when 70 per cent of your budget is eaten up by maintaining existing systems.

It’s easy to see why many CIOs have been taking a hard look at cloud computing, and at the power it seems to offer to deliver new applications and services instantly with little or no drain on their investment budget. They have also been figuring out how to reconcile cloud-world with legacy-world, and especially how to achieve a structure which combines the data security and top-down control of existing IT with the range, flexibility and speed of the cloud.

A growing number of organisations, up to and including some of the largest multinationals — and not excluding the public sector — have built up knowledge and experience of the right roadmap to follow to combine old and new.

In my own company (and in many of our big competitors) there are case studies that clarify the benefits and pitfalls, and the do’s and don’ts, of harnessing the fast-growing facilities of the cloud.

The day is rapidly approaching when shaving 10 per cent off the IT budget or 5 per cent off the organisation’s distribution costs won’t impress the CEO as perhaps it did five years ago. The real challenge is to ensure that IT is geared up to generating revenue and supporting new business opportunities. It means a bigger role for the CIO, at the centre of the organisation’s whole future. But it surely also means a more rewarding one.

Christine Hodgson is chairman of Capgemini UK

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