From the CEO – What Kind of CIO Are You?

Are you using IT to drive transactions or to generate business transformation?

This question usually arises when your CFO tries to argue that your IT budget should be flat—or should even be shrinking—based on the notions that outsourcing is here to stay, Linux is “free,” and a dollar today should get you more than it did yesterday. The intensity of the debate that ensues tends to depend upon whether your CXO peers view IT as a cost center or a means to drive innovation.

But I always find this either/or formulation misguided. It disparages the amazing work many IT organizations have done improving the business by cutting costs in a very difficult economic climate. It ignores the fact that IT has done this while dealing with nightmarishly difficult issues like compliance, project backlogs and security. (For the hard numbers on these issues, see our “State of the CIO” research at www.cio.com/state.) And it implies that if you are not transforming, then you are not strategic.

To me, this is nonsense. We just don’t live in that kind of black-and-white world.

Given the complexity of IT’s role, it’s fascinating to read the recent McKinsey article, “The Next Revolution in Interactions” (which can be found at www.mckinseyquarterly.com). McKinsey argues that competitive advantage can best be sustained if one moves from transactional or transformational IT to tacit IT, defined in the article as the ability to analyze information, grapple with ambiguity and solve problems. (Christopher Koch’s blog, “Koch’s IT Strategy,” provides a terrific overview at www.cio.com/blogs.) Tacit work creates capabilities and advantages that rivals can’t easily duplicate.

Former Secretary of Labor Robert Reich recently stated that “any professional service that can be boiled down into predictable steps, even if they are complicated steps, is now exportable to South Asia.” CIOs now more than ever need to move beyond technology to provide business leadership and clarity while maneuvering in a very complex world. McKinsey gives some additional evidence that doing so will not only benefit your business but also help make you, personally, exportproof.