Chief information officers (CIOs) who want to succeed at their jobs must see that an IT culture permeates their companies, according to Dane Anderson, vice president of consulting and research at IDC Asia-Pacific.
Speaking at the Asia-Pacific IT Forum here Tuesday, Anderson said there is no easy route for CIOs to improve the value of IT to their business, especially in a time of tightened IT budgets.
“There is no quick fix, It needs to be a culture of IT permeating companies,” he said. “And with IT budgets falling, CIOs need to set priorities and deal first with those issues that keep them awake at nights.”
Anderson said that the role of CIO will not vanish, but is in a state of flux.
“There is considerable change to the CIO role for several unstoppable reasons,” he said. “The roles of CIO and CEO (chief executive officer) will overlap more in future.”
As reasons for the changing role of the CIO, Anderson cited:
— the expanding IT orbit. IT now permeates all parts of a business, from human resources to distribution, logistics and strategy.
— IT has become the new epicenter of competitive advantage, capable of enabling strategic flexibility, precision of information and creating a corporate community
— support for IT, both in external terms from outsourcers and in internal terms from IT-literate workforces, has become much better recently.
These factors all shift the CIO role towards the center of a company’s operations and away from the purely technical aspects, according to Anderson.
“CIOs must change or have change forced upon them,” Anderson said.
In successful companies, there will be no barrier between the IT function and the business function, Anderson said.
“Companies must integrate the IT and business units,” he said. “You cannot simply throw a business problem over the wall at the IT department. You must reshape the business and ensure accountability (for the value of IT projects to the business).”
Anderson illustrated his points with the example of the two giant U.S. retailers, K-Mart Corp. and Wal-Mart Stores Inc. K-Mart recently filed for protection from bankruptcy under Chapter 11, while Wal-Mart remains one of the most highly-valued U.S. companies.
“In 2000, K-Mart invested US$1.7 billion [B] on IT which initially sounds good,” said Anderson. “But the subtext was that before that K-Mart had not spent anything on IT for far too long.”
This contrasted with Wal-Mart, which had built its business around IT for over 20 years, creating a strong corporate IT culture, and now maintained a database second in size only to that of the U.S. Department of Defense, Anderson said.