What this week’s CIO Magazine Tells Us About IT

This issue (June 1, 2008) contains some powerful — and disturbing — news for CIOs.

On page 16 two surveys are described:

One, from IBM, surveyed more than 1000 CEOs around the world. It found that 83% of them expect significant change in their business over the next three years. The top drivers of change identified were: market factors (48%), people skills (48%), and technological factors (35%).

The second, from Booz Allen and CIO itself, concluded that corporate executives hold their IT departments in low esteem. Corrie DeCamp, a principal at Booz, noted that certain approaches to IT, like shared services, may achieve cost savings, but at the price of making line organizations feel they can’t get their business needs met.

These two surveys sum up the problem — not for IT groups; they’ve got additional problems — but for CEOs regarding IT.

CEOs face a world that is increasingly IT-intensive and software-infused. That technological factors cited in the first survey? That’s primarily software, as software powers most technical developments these days. Drug discovery uses bioinformatics. Logistics uses supply chain communication. Automobiles use online communication. All software-based. And I’d argue that category called “market factors” also has a healthy slug of software in it, too. When your competitors can out-collaborate you via Internet-based joint partnerships, you may call it market factors, but it’s being driven by IT; that is, by software.

And then you look at the second survey and it essentially says that other parts of the company — in other words, those parts needing to create and sell software-infused products in this ever-more-competitive market factors world — and they don’t trust IT.

I may not know all the answers, but I know for sure that if you don’t trust part of your company to deliver what you need to compete, you’ve got *big* problems. Today’s world is all about innovation, because we live in the most rapidly changing times in human history. If you aren’t integrating IT — and the IT organization — into what you’re doing, you’re fighting today’s war without today’s weapons.

One trend in IT is appointing non-technical people to head it. I think the philosophy is that these folks will be able to communicate with peers in a more common business language rather than technical jargon. As you might expect, I don’t really align with this. I mean, in a drug company, I don’t think anyone says to the head of research, “you know, all that talk about protenomics is just too confusing. Can you put it in terms I’m comfortable with?” No, in drug companies, everyone recognizes that drug discovery is a critical competence, with enormous implications for the success of the business, so they learn to understand the jargon and meaning of the field.

Later in this week’s issue is an article on increasing diversity within a utility IT organization. Even utilities, historical bastions of static, rate-based business (and I should know, I started my career at the phone company!) are experiencing rapid change due to increasing costs, uncertainty of supply, and the need to reduce operating expenses (I mean, isn’t reading meters manually a bit out of date now that Internet connectivity is here — sure it is, which is why IT-intensive remote meter monitoring is a big initiative in the industry).

One question I mused on about having IT headed by a non-IT individual (I think the CIO described

in the utility piece comes from a non-IT background, as far as I could tell) is whether peers would be more likely to accept innovative initiatives from an IT organization headed by a non-IT person.

I may not know all the answers, but I know for sure that if you don’t trust part of your company to deliver what you need to compete, you’ve got *big* problems. Today’s world is all about innovation, because we live in the most rapidly changing times in human history. If you aren’t integrating IT — and the IT organization — into what you’re doing, you’re fighting today’s war without today’s weapons. Viewing IT as an annoyance to be managed to “lowest possible cost” is a recipe for falling short in creativity and innovation. I just wonder what can change the dynamic.