Economic woes force IT to be flexible

Front-line IT leaders should make sure their groups are flexible enough to handle continual adjustments in strategies because of changing business conditions and needs or else suffer the consequences.

That was the mantra espoused by panelists during a session on IT leadership in challenging times at Computerworld’s Premier 100 conference in Palm Springs, Calif., last week.

“A CIO’s job is 90 per cent change management and organizational and 10 per cent technical,” said Craig Luigart, CIO at the U.S. Department of Education.

As an example of the need to be flexible, Luigart said the economic recession’s pinch on tax revenue prompted the Education Department and other federal agencies to speed up online government projects aimed at reducing their costs.

Because of the ongoing economic challenges, Luigart and other panelists emphasized the importance of breaking long-term IT projects into two- or three-month increments so that their value to a company’s business operations can be measured on a regular basis.

Michael Ragunas, chief technology officer at the online division of Framingham, Mass.-based office supply retailer Staples Inc., said the economy prompted him to have’s IT staffers “challenge” business managers on what they’re expecting from key IT projects “and what they’re out to accomplish. I’m asking our people to be more aggressive.”

But Staples isn’t standing still. One recent project was aimed at luring shoppers to use self-service kiosks in the company’s 1,000-plus U.S. stores to buy build-to-order PCs that are made for Staples by third-party hardware vendors. That has helped generate an additional US$4 million in weekly sales for Staples while reducing its inventory costs, Ragunas said.

Tom Murphy is one CIO who was willing to resort to Plan B on his company’s IT strategy as well as his own style of leadership.

When Murphy joined Miami-based Royal Caribbean Cruises Ltd. three years ago, he was told that its IT organization had no vision. He managed to improve the 400-person department’s standing within the firm, thanks partly to the initial execution of a $200 million systems upgrade, called Project Leapfrog.

But Murphy said during the Premier 100 conference that he eventually found himself asking some hard questions about his effectiveness as an IT leader. Murphy said he thought he wasn’t communicating well and sensed that the IT department was “moving sideways.”

After attending a leadership class, Murphy said he realized he had always been concerned about “building a legacy.” But, he said, when the going got tough in earlier jobs, he got going out the door.

At Royal Caribbean, he instead decided to empower his staff and encourage them to be honest about his leadership. Now, his managers “can lead themselves,” Murphy said. “I can’t think of a better legacy to leave behind than that.”

That approach was crucial after Sept. 11, when Royal Caribbean’s management ordered massive budget cuts. IT offered to go first and took the biggest hit, cutting nearly half of its staff and shelving Project Leapfrog, Murphy said.