CIO Role Must Evolve
Stephanie Overby’s recommendations on how to run IT better, supplemented by behavioral cosmetics, just will not do (“The Incredible Shrinking CIO,” Oct. 15, 2003).
CIO readers would be better served by understanding how the influence of the CFO has evolved from cashier, to bookkeeper, to accountant, to investment adviser, and to the current position as the fiduciary whose name appears in the filings with the Securities and Exchange Commission and reports to the investors. Always remember that the position of the most senior financial employee has very humble origins.
The lesson to be learned from the progress of the CFOs’ role is that of a continued expansion in the scope of their functions. In contrast, the role of CIOs has remained largely stagnant over the past 40 years because they’ve focused on inserting information technologies into a reluctant corporate body. As long as CIOs continue to concentrate on IT as their primary charter, their role will keep shrinking until they get the badge as the CTO.
To grow, CIOs must seize the opportunity to manage the total cost of information (that is administrative transaction cost). In a median U.S. company, the cost of information is now greater than the cost of goods sold and 10 times larger than the IT budget. The competitive challenge to U.S. companies nowadays is not IT efficiency but total information productivity. Applying the tools for achieving information productivity gains should become the basis for expanding the role of CIOs.
To extend their influence, CIOs must seize the opportunity to safeguard, protect and develop knowledge assets. In profitable U.S. companies, the value of knowledge capital is three times greater than the worth of plants and equipment plus financial assets. CIOs have an opportunity to seize the protection of all information assets as the basis for enlarging their roles. In an increasingly hostile world, we will witness global competitive contests waged for the possession of knowledge capital. The era of information-based warfare has ceased to be a purely military form and has now infused global commerce, with the United States in the position of greatest vulnerability. Potentially the CIO is best qualified to guide such campaigns since the current accounting systems have blindsided the CFO to record only a fragment of what constitutes assets.
Paul A. StrassmannAuthor and Former CIO
A call for I.T. Unions
I am writing in response to your Nov. 1, 2003, publisher’s letter, “The Specter of IT Unions,” in which you asked whether IT workers should unionize. All companies exist for the same purpose, to return an increasing profit to their investors. That cannot be accomplished in the long term without cost reductions, and a significant amount of the cost of any IT organization is labor.
Naturally, this may mean the fulfillment of select job segments in lower-cost parts of the globe. However, American economic history demonstrates that as lesser-skilled positions move to low-cost regions, the workers who formerly occupied those jobs will enrich themselves and take on larger, highly skilled roles. Ultimately, this raises, not lowers, the nation’s output and helps the United States remain at the top of many industries.
It’s ironic you spend 143 pages on using IT departments to increase shareholder value with less people yet devote a full page to decrying the same thing.
Paul D. Thompson
Publisher Gary Beach responds: The key issue for the United States is this: A broad-based coalition of industry, government and academic leaders must craft a long-range national technology policy addressing the key education, science and technology initiatives that America must undertake to ensure displaced workers will be able to “enrich themselves and take on larger, highly skilled roles.” According to a recent CIO poll, seven in 10 IT workers support such a policy.