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Published: April 1, 1997

 
 

The C.E.O.'s Information Technology Agenda: Seizing the Right Opportunities

The paybacks and risks of failure are now higher than ever. The new I.T. landscape can -- and should -- have a direct impact on most, if not all, of the top C.E.O. agenda items. Today's I.T. product capabilities, coupled with key market-driving capabilities (particularly those relating to globalization and time-to-market demands), can finally make good on the promise of consistent information for running the business at all levels around the world.

In a few short years, the I.T. frame of reference for business leaders has evolved from the automation of a single function, such as human resources, to the enterprise-wide level -- where the full value-chain of financial, supply chain and customer service transactions is rooted in a single network of integrated information systems. Moreover, the advent of Internet technology and its potential to build extended enterprise capabilities with customers and suppliers have raised both the potential payback and risks to a level that most C.E.O.'s and senior managers could never have imagined.

The I.T. agenda has become much more complicated. In the late 1980's and early 90's, the major thrust of I.T. agendas at most corporations was related to replacing legacy information systems and reducing associated I.T. costs. Today, the agenda has been greatly expanded as a result of several initiatives that were virtually unheard of a few short years ago. For example, enterprise-wide software, which integrates business processes across a corporation's key functions, is relatively new. But it is almost always the single most expensive and complicated I.T. initiative ever undertaken by a company; it has driven up the typical project cost-profile by 500 to 1,000 percent.

At the same time, globalization initiatives have precipitated the need to send messages and documents around the world at all times. The challenge of consolidating existing communications infrastructures while building the capability to accommodate a full-range of equipment, software and specific in-country communications structures has also contributed to the new, "fewer and larger" project mix. And once again, the advent of Internet or Web-based technology has not only spawned the knowledge management era, but it has also unleashed the huge potential inherent in the ability to communicate easily with customers and suppliers.

THE KEY ACTION STEPS

There are differing opinions on whether I.T. is now -- or even should be -- on the C.E.O. agenda. This debate has raged for more than 20 years without arriving at consensus, let alone resolution. Unfortunately, as is the case with most political and religious debates, the various positions have become deeply entrenched over the years.

But hope -- in the form of well-respected business leaders -- hovers on the horizon. Some recent, high-profile testimonials support the position that I.T. definitely is on the C.E.O. agenda. More importantly, it is not just a placeholder on the agenda, something to which the C.E.O. pays lip service. Some of the most highly respected business leaders are realizing that capitalizing on I.T. opportunities is crucial to the overall success of a corporation's key growth initiatives.

The General Electric Company's chief executive, Jack Welch, has put the proverbial stake in the ground in an extraordinarily public manner. In G.E.'s 1995 annual report, Mr. Welch characterizes I.T. as one of the top five growth initiatives that the company has ever faced: "As the millennium approaches, this company will pick up the pace ... to seize five of the biggest growth opportunities in our history: Globalization, New Products, Information Technology, Installed-Base Service and Quality."

The reality -- and importance -- of the issue notwithstanding, the real debate cannot and should not focus on reprioritizing the C.E.O. agenda. Instead, the C.E.O. must engage the organization to ascertain the current state of play on the I.T. front and to evaluate if, and where, there are real I.T. issues to be considered at the chief executive level. Generally, there's no call for debate on I.T.'s historical standing in the corporate world; a corporation's position on I.T. typically can be ascertained in less than 15 minutes with the right set of optics to guide the litmus test.

 
 
 
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