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Chairman, SCC Sequoia
- 50-year career split 50/50 between serving as an IT executive and as an IT consultant.
- CIO for Xerox Data Systems, American President Lines, and Interim CIO for QANTAS, Lam Research, Tencor Instruments, Tri Valley Growers.
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Management of IT for Competitive Advantage
Chairman, SCC Sequoia
- Software as a Service operations are moving IT services toward commoditization.
- You can go out and buy IT services pretty easily these days. The emergence of cloud services and SaaS services in the cloud are pushing IT toward becoming a purchasable commodity. IT becomes a sort of consumer product to be procured. One major Silicon Valley company demoted the CIO and had him report to the chief procurement officer.
It is amazing some of the things that you can just order up and your vendor will tell you: “Well, we’ll have that up and running tomorrow.” Of course, there is the little issue of training and there’s the issue of data transfer between systems. IT leaders who understand these changes will have roles to play and may avoid being demoted to a position under procurement.
Still, the pressure remains as all manner of software is available to help you move your data from one system to another, from one SaaS vendor to another. It’s not always easy. There still aren’t any standards. I think eventually there will be, but that whole area has become less of a worry. There are a lot of companies that are signed up with two or three SaaS vendors, and they are being reasonably well served.
- Big Data is here to stay.
- Big Data is not a passing fad. Those CIOs who hunker down and say, “Somebody else will handle that," are dead wrong. Companies that recognize the importance of all their customer data have a marketing advantage, and many have done exceedingly well there. Some companies even have created a separate executive position for business intelligence, separate from the CIO.
In the end, it seems likely, though, that many of the IT, data and digital systems and processes will consolidate under the CIO. In some ways, the real question is what does the “I” stand for these days? One person has called it the "chief imagination officer." There can be a long list of things that begin with the letter “I," and each of them fits the job description in some fashion. Some include:
- Chief innovation officer
- Chief infrastructure officer
- Chief information officer
- Chief integration officer
- Chief imagination officer
- Chief irritation officer
- Chief innovation officer
- Bring-your-own-device computing and communication is now an accepted business practice
- Laptops, tablets, smart phones and other portable devices are irreplaceable for most businesses. The biggest issue for companies and users revolve around intellectual property and privacy. One company in the Bay Area — a firm with a lot of online sales — did an information security assessment. They were appalled at the lack of knowledge their people had with regard to just the fundamentals of security, with respect to passwords and so forth. This underscores how IT needs to be sure that security of corporate information and access to it is well thought out.
- CIOs will face growing pressure to materially improve overall workforce collaboration and productivity, particularly external to IT.
- A large portion of the traditional role of the CIO was just to keep the basic systems up and running – payroll, general ledger, accounts receivable, manufacturing bills and material, etc. That has now been pretty well commoditized by SaaS providers operating in the cloud. It's now almost a secondary responsibility of many CIOs.
Top management is looking to the CIO to do something more than just manage a bunch of vendors. They want tools that remove silos within the company and create opportunities for cross-functional collaboration – all with the goal of enhancing overall productivity, agility and speed.
The best CIOs already have pushed down in their chain of command the responsibility for all the traditional responsibilities like keeping email up and making sure that the paychecks get printed (or better, issued by EFT). Top management needs CIOs to focus on making the company work better together. In some cases, that can mean collaborative tools and processes that facilitate projects that cross multiple company boundaries (vendors to company to end customers).
- CIOs will face growing pressure to materially improve their company's cross-functional business processes, particularly those external to IT.
- Companies are beginning to realize they really need to get their acts together. That would be "together" as in working together – collaboration – involving multiple basic business processes. As a result, IT departments are facing increasing pressure to provide collaboration mechanisms and tools that cut across company functions and processes as well as across distance and time.
As an example, a company that struggled with providing timely financial projections for its quarterly reports looked to its CIO to resolve issues surrounding the problem. The reporting system for projected revenue wasn't tied into the firm's cash-to-quote system, which provided the basic data for the projections. IT clarified the process, automated major aspects, and shaved weeks off the time required to pull the data together. It was a matter of rationalizing the system.
Such collaboration between teams and processes is closely related to the concept of BPI (business product improvement). The concept, in many ways, is terribly old hat. Consultants who worked in this area are mostly retired now. But as it raises its ugly head again, we find that it's not such an ugly head after all. What has happened is that as companies have grown, they often have grown like that old phrase – growing like Topsy. What you see in such companies are highly unplanned processes. They work, but slowly. The new IT department will be tasked with cutting through that fog and making the company more productive and efficient.
Management of IT for Competitive Advantage: Key Trends