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strategy and business
 / Spring 2008 / Issue 50(originally published by Booz & Company)


The Practical Visionary

Openness, Intelligence, Interoperability
The cultural walls that have long separated the CIO from his or her business-oriented colleagues must be torn down, and that can happen only if the CIO can transform himself or herself into a true “chief of information,” not a chief of technology, or of the network, or of security. The issue isn’t the bits and bytes that make up the technology in IT. As strategy+business Contributing Editor Nicholas G. Carr argued in a notorious 2003 Harvard Business Review article titled “IT Doesn’t Matter,” information technology has be­come a commodity, and as such, it cannot be counted on by corporations to create a sustainable competitive advantage. “What makes a resource truly strategic,” wrote Carr, “is not ubiquity but scarcity.” Carr was right that the technology has become ubiquitous, but the talent and wisdom required to use it strategically — to successfully capture, analyze, and employ information to the greater end of profitability and growth — are all too scarce.

That’s why, in practice, the quality of the CIO — and of the IT staff — has proven to make a difference in competitiveness. Now, however, the need for better, faster information on the business side and the requirement to optimize global business processes, combined with new technologies that can significantly increase the value of the information generated by the IT department, has created a golden opportunity for information chiefs to make an even greater strategic contribution. First, the business side is demanding more open technologies — nonproprietary, open source, with open standards — that won’t slow the business down or trap it in outmoded, stolid ways of operating. These include standardized, global “off-the-shelf” solutions, such as ERP (enterprise resource planning) and CRM (customer relationship management) packages, as well as low-cost, standardized IT infrastructure elements.

Second, enterprises are turning more frequently to a variety of “business intelligence” technologies with which they can analyze the supply chain and manufacturing, on one side, and markets and customers, on the other. These technologies must have the ability to digest massive amounts of information, analyze it in ways that can aid the business side in both day-to-day operations and longer-term planning, and then provide those results on a real-time basis to everyone in the enterprise who can benefit from it. The technologies’ success depends on the ability of their handlers to use them to add business value and further the company’s mission.

Finally, the business units are looking to CIOs to provide technologies strong on interoperability. They must work together seamlessly, allowing the enterprise maximum flexibility in how it uses the information it gathers and the ability to look at its information in new ways that can suggest new opportunities.

For the CIOs who step up to a more strategic role, success will depend in large part on having the ability to minimize the many operational, budgetary, and other distractions that typically trap them in the role of chief technician.

Strategic CIOs must also maintain a consistent focus on the core mission of their organization — its strategic goals and tactical plans. Doing so demands that CIOs be able to clearly explain the role technology plays in boosting the long-term health of the organization. This requires the abil­ity to knock down the cultural walls that have traditionally separated IT from the business side, at all levels of the organization — to ensure, for instance, that the company’s technology strategy is seamlessly incorporated into its overarching corporate strategy, and that those two are never separated. The goal: to gain recognition as the organization’s lead information strategy planner and visionary.

Managing the Information Life Cycle
Strategic CIOs must stress the “I” in CIO, working with the business to make certain that information as a critical asset is optimized, and that the organization’s information management program, and the technology on which it depends, is not a hindrance to strategic and operational flexibility but rather an enabler on which the business can depend in its quest for competitive advantage. To that end, strategic CIOs must manage the entire life cycle of information, from collection, to maintenance, to analysis and use. And they must do so in a way that maximizes its value to the business side, by helping determine what kinds of information are most valuable in making decisions. They must also learn to package that information in ways that will encourage its use by those who can most benefit by it. That also means being able to measure the value of that information and its overall effect on the organization’s performance.

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  1. Allan E. Alter, “The Role of the CIO: Setting a Strategic Course,” CIO Insight, April 2007: Last year’s very informative update of a long-running survey of top IT executives on CIOs and their position within their companies.
  2. Marianne Broadbent, The New CIO Leader: Setting the Agenda and Delivering Results (Harvard Business School Press, 2004): This tough-minded survey of how top IT executives succeed offers advice rooted in the realpolitik of the world of the corporate CIO.
  3. Nicholas G. Carr, Does IT Matter? Information Technology and the Corrosion of Competitive Advantage (Harvard Business School Press, 2004): The book-length version of Carr’s seminal, and controversial, article on IT and corporate strategy. A must-read for those interested in either subject.
  4. Rich Kauffeld, Johan Sauer, and Sara Bergson, “Partners at the Point of Sale,” s+b, Autumn 2007: Description of how shelf-centered collaboration among manufacturers and retailers provides a major new opportunity for the strategic CIO.
  5. National Basketball Association Web site: Even if you aren’t a basketball fan, it’s worth taking a look at the state of the art in Web site technology.
  6. For more articles on IT and technology, sign up for s+b’s RSS feed.
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