Leo Apotheker, the former CEO of both Hewlett-Packard and the German software company SAP, compares chief information officers to air traffic controllers or the backstage crew in a theater. While that may not sound like the most impressive job description, the comparison refers to the number of moving parts a CIO typically must juggle.
When an HP customer wants to order a PC online, for instance, “you need to set up the back-office systems to see if the PC is in stock,” explains Apotheker. “Then, you need to produce an invoice, make sure the customer’s credit is good, organize the shipment—and you want it all to happen seamlessly, in the shortest way possible.”
Now, add one more component: ever-faster, ever-changing digital processes underpinning the air traffic, the theater, or the company. “The CIO will be the person who will help senior management to turn a business into a high-speed, real-time digital enterprise,” says Apotheker. “The CIO is probably the only function in the company, together with the CFO, that touches every division in the company.”
Indeed, as technological innovation has worked its way into every part of a company—from product development to consumer service to marketing—the CIO has become a key figure, the one who knows the technology best and can connect all the players both inside and outside. “IT today is looked at as part of the profit center, part of the strategic discussion, and not a cost center,” says Chuck Miwa, who serves as both the CIO and chief operating officer of Informa Research Services, a $30 million market research company headquartered in the Los Angeles exurb of Calabasas:
The CIO can play a range of roles in strategic direction. Miwa, for instance, launched a two-year operational audit at Informa in the mid-2000s that ended up reconfiguring some departments and giving many managers IT training.
More recently, the focus has been on cloud sourcing. In PwC’s most recent annual survey of about 500 U.S. companies’ uses of digital media, published in January of 2012, between 44 and 87 percent of the respondents said they planned to invest more in social media and the public cloud in 2012 (depending on the particular type of technology and the particular group of respondents).
The CIO’s Best Friend
Social media—including group sites like Twitter and Facebook, as well as direct contacts via smartphones and tablets—has become a primary way of communicating with staff and customers. In addition, these apps have become tools for data mining, as they track customer actions, such as purchases, visits in real time and also customer interactions with other shoppers.
“There’s not aday that goes by that we don’t receive some kind of question about social media from board members,” reports Chris Curran, PwC’s chief technology officer. Such technology has changed the nature of the dynamic between CIOs and their chief marketing officer peers, forcing the two to forge a closer, working relationship. They might seem the ultimate odd couple—the glad-handing marketing guy suddenly BFF with the tech nerd. But experts say the two sides need each other.
“They are strange bedfellows,” laughs Mark Polansky, CIO/IT executive search practice leader at Korn/Ferry International. “The CEO has to be the matchmaker—to get them to [sit] down together and make them responsible for setting goals,”
Even better, the CEO can try to find both sets of qualities in one person. When a major pharmaceutical company was seeking a new information chief last summer, the CEO specifically asked Korn/Ferry to scout for candidates with experience in the consumer products world, rather than pharma. The company wanted potential hires “with the understanding of how to have the conversation with the consumer,” Polansky says.
Coordinating the Cloud
However, social media is just one way of using the vast electronic cloud. Much of what used to be done in-house, both hardware and software, is now outsourced. That puts the CIO at the center in two ways—coordination and quality control.
“If you’re getting CRM from one vendor and HR from someone else and getting data about local events from another place, you have to be smart about how each of these vendors works and how to integrate them all,” Curran says.“The CIO is the head consultant, head advisor [and] chief integrator doing this.”
Moreover, Apotheker points out, “not all clouds are created equal. The CIO has the ultimate responsibility for the quality and integrity” of the various vendors.
Cloud outsourcing has been a particular boon for small- and medium-size businesses. While they can’t afford the massive investments for in-house hardware or staffing that might be necessary to launch a new program, renting time and space on an outside platform is well within their budget.
Without the cloud’s networks of data, Miwa says that he would have needed to nearly double Informa’s IT staff of 15 to supply and manipulate content for Microsoft’s new Windows 8 personal finance portal. Or a regional retail chain could use cloud-based software to test a frequent-shopper program, suggests Mark White, the chief technology officer of Deloitte Consulting’s technology practice.
For bigger companies, the orchestration can get complex. When Baloise Group—a $9 billion insurance company headquartered in Basel, Switzerland—came up with the first personal-insurance customer website in that country six months ago, according to CEO Martin Strobel, his CIO had to work with marketing, customer service, HR and security to gather, personalize, present and protect the information. Security plays an especially key role in the European CIO’s job because of the strict privacy laws there.
Similarly, when a large health-care company recently came out with games for mobile devices to encourage young people with juvenile diabetes to think about healthy lifestyles, according to White, it required the CIO to oversee a combination of cloud-sourced distribution, data analysis, cyber-security (because patients’ medical information was being sent electronically) and social media.
How did this new product come about? The CEO had stopped by the IT department’s “strategy retreat.”
Strobel of Baloise ticks off a list of key C-suite questions: “What is the role of IT in making a more efficient, agile company? How can we change our business model toward more [of] the Internet model? How can we employ social media?
“Everything you do in this company,” he sums up, “has to do with IT.”
Sending Your CIO Back to School
Looking to add to your CIO’s toolbox? Here are two executive education courses CEOs recommend:
· Center for Information Systems Research, MIT
What: For mid-to-senior level executives in large organizations, emphasizes setting strategy, making better decisions, and managing change in the way organizations use IT for critical business processes.
When: June, five days
Where: MIT Sloan School, Cambridge, and Massachusetts
Cost: $5,500 full session, or $1,200 per day
CIO Institute, Carnegie-Mellon University
What: Focuses on helping IT leaders better utilize and coordinate staff, processes and technology.
When: Monday-Wednesday; monthly except June, July, August and December
Where: CMU’s Software Engineering facility in Arlington, Virginia
Cost: $2,950 per monthly session
Certification: Chief Information Officer Certificate;
On the other hand, if the CIO is becoming a corporate player like the rest of the C-suite, a program geared to IT may be the wrong approach. “I’m probably going to encourage him or her to get the same MBA as any other manager,” says Mark Polansky of the executive recruiter Korn/Ferry. “You want to give that technologist more of a business perspective.”