One way to tell how much a company values IT–or how much the CEO values the CIO–is whether the CIO participates in the company’s earnings calls with Wall Street analysts. Few do.
It’s not a surefire metric, of course. Surely there are CIOs of companies where IT is considered game-changing that, for whatever reason, don’t appear at the financial dog-and-pony show. Maybe he’s not a good presenter. Maybe there are other topics to discuss.
But pay attention when you see a CIO at these events. You’ll know right away not only that the CIO has arrived, but that the CEO gets why it’s important to have him there.
Christopher Perretta, CIO of the giant financial services firm State Street and a CIO 100 award winner, appeared at an annual meeting with Wall Street last week to talk about a massive transformation project started in 2010. Perretta, nearing the halfway point in the project, provided some details about how State Street plans to use cloud computing to change application development, expand and contract computing power on demand and provide all sorts of new data analysis capabilities to customers. It’s compelling stuff that will change how State Street competes globally. It’s a big deal.
As Jay Hooley, the company’s chairman, president and CEO, put it during the call, “This is revolutionary.”
Even on its “About” page at its Website, State Street has a tab for “technology,” telling all about the competitive advantage IT provides and offering this tidbit: “Historically we have devoted between 20 and 25 percent of our full-year operating expenses to technology development, helping to ensure we can respond nimbly to the rapid rates of change in the industry.” For 2011, that would have been about $1.7 billion spent on IT development. When you spend that kind of money, your CIO ought to be able to explain how and why. Perretta’s very good at that. (He had some intriguing things to say when I interviewed him recently about how the technology you choose for a given task influences your decision making.)
Wall Street analysts should care more about IT strategy. When I listen to some of these calls, I can almost hear the collective snore in the audience when the CIO steps up to the microphone. There’s no way an analyst can make a responsible and sound decision about a company’s prospects without understanding its IT strategy. But after the CIO speaks, there are often no questions, no comments. That tells me Wall Street doesn’t get it.