'CIO role will be more effective in coming years'
Jan 4, 2008

Patrick Gray is the president of Prevoyance Group, an IT consulting firm based in New York and author of Breakthrough IT-Supercharging Organizational Value through Technology. The book outlines steps organizations need to take to move IT from a utility role to a strategic one. In an e-mail interview with Tabrez Khan, Patrick Gray discusses the challenges and issues facing CIOs in 2008 and the strategy they need to adopt in the future

Can you explain in brief, what the Breakthrough IT concept all about?

Breakthrough IT means moving IT into a new mode of operating. In the past, IT shops were usually an engineering-type function, that delivered a service at another business unit's request, then got out of the way. More recently, IT has focused on providing these same services, but at the lowest possible cost, a model that can only continue for so long, as costs cannot be cut beyond a certain level.

Breakthrough IT is the next step, where CIOs are able to move their basic operational services, things like keeping the network going and making sure their workstations are upgraded, off their radar, either through outsourcing or "insourcing" to an internal organization. With this accomplished, CIOs focus on actively identifying business problems IT can solve. For example rather than waiting for sales to demand a CRM solution, the Breakthrough CIO suggests a process improvement that can be implemented for very little cost with a high quantifiable return.

Rather than managing the daily operations, the Breakthrough CIO identifies and executes on these projects, and tracks their returns and corresponding risk levels, until IT becomes a predictable investment.

In your book you talk about a methodology for transitioning IT from the "old way" of doing business into a Breakthrough IT organization. Can you briefly outline for us the steps involved in doing this?

There are several steps in this process, roughly outlined by the sequence of chapters in the book:

* Resource your "continuing operations" (i.e. keeping the servers up and networking running) either to an independent internal structure, or to an outsourced provider.

* Shift conversations with colleagues towards strategy and away from technology, using the Breakthrough IT concept as a driver.

* Shift the IT organization from one based in technical competency, to a cadre of process experts.

* Gaining a holistic view of projects across the IT organization, and grouping them in terms of their risk profile and likely returns. Refine this project portfolio in a manner similar to how one might refine an investment mix.

* Gain competence managing projects and tracking their returns, with the aim of being able to accurately predict future returns on IT investments.

You say in your book that IT should deliver and execute business strategy-not just provide a portfolio of commodity services. Can you elaborate on how this can be achieved?

CIOs need to stop thinking about their purpose in life being to maintain all the machines in the server room. IT is a means to a business objective, and that objective should be more than just cost control. If you look at a business problem there are often process changes combined with technology that can solve it. IT's role should be about solving these problems.

What guidelines would you prescribe for the CEO and CIO to move their relationship from one of customer and vendor to one of partners in fueling business growth?

CIOs need to become students of their business, learning the company's products, its competitors and its current challenges and opportunities in the marketplace. This is the language of CEOs, not talk of ERP and CRM. Once the CIO can speak this language fluently, he or she can begin gaining insight into the CEO's strategy, and offer thoughts on how IT can help. The CIO must frame these discussions in terms of business benefit and solving business problems, not in terms of technical "solutions."

As the CIO gains credibility by implementing strategic projects, this cycle builds upon itself until the CIO truly becomes a trusted advisor to the CEO.

How can CIOs develop process expertise within their organization?

IT is uniquely positioned in most companies in that it works with every other business function in the corporation, and has visibility into their processes. The CIO can leverage their knowledge to suggest process-related improvements that come from this increased visibility.

Building this competence into the IT organization can also be accomplished by bringing line-level business experience into the IT function. CIOs can institute a "tour of duty" program whereby people from IT spend a year or more working in a business function, and vice versa. CIOs should also look beyond mere technical competency when hiring.

As an IT consultant can you tell us whether there is a technology gap between western and Indian enterprises? How can it be bridged?

There is not a technology gap in terms of hardware, software and basic technical services, but there is a management gap. By that I mean that many Indian enterprises use technology to provide a service, perhaps even as the core of their business as is the case with companies like Wipro or Satyam. Few companies in the west are using IT to truly drive business returns, and even fewer companies in India are doing so. With so much IT happening in India right now, this may be on the verge of changing for the better however.

What about on-demand software; there is a view that it is more suited to SMBs, what is your view on it?

On-demand is fine for any size enterprise, as long as it is viewed as a means to an end. On demand should allow your CIO and IT organization to shift their focus from the core utility-type services provided by on demand software, to more strategic initiatives. If a CIO or IT manager sees on demand as the central focus of an IT strategy, he or she is stuck in an operational rut; there is nothing strategic about on demand computing.

What are your views on virtualization and Web 2.0 technologies? How do you see enterprises benefiting from Web 2.0?

Again, these technologies are means to an end. If we look back to the "Web 0.0" days, if you had a website it was wonderful, and it was regarded as this technical marvel that needed to be crafted by technical people, and we ended up with that online world of grey websites with Times fonts. All of a sudden, people woke up and realized the web was just another communications medium, and general principles of good design and quality copywriting applied. Web 2.0 will run the same course. For now it's amazing to have your company's toothbrush on Myspace or Facebook. In another few months this trend will run its course and all the Web 2.0 hoopla will be just another element in your digital marketing strategy.

Virtualization is exciting in that it allows for applications to no longer be tied to a single hardware platform, and moves you several steps closer to having your hardware infrastructure be just another utility that can have its capacity raised or lowered with relative ease. This brings about obvious benefits in terms of energy consumption and physical space, but again, it's really not strategic and focuses on the "how" more than the "why." CIOs need to be focused on the "why," which is where they can truly impact a business.

What according to you are the key challenges and opportunities CIOs should look out for in 2008?

Here are a few:

* The C-suite is rapidly becoming overcrowded. From Chief Compliance, Risk, Marketing and Coffee Officers, there is a looming sweep where C-roles that do not deliver organizational value will fall by the wayside. If you are not a trusted partner of the CEO, you will likely find yourself relegated to a purely operational role.

* CIOs are increasingly falling into two categories, those that are excellent operational managers and who can keep an IT organization moving, and those that have all those traits but can also communicate with C-suite colleagues, understand the organization's vision and strategy, and use IT to facilitate its implementation. The later will become increasingly important as companies rationalize their C-suite.

* CIOs must become business leaders if they wish to thrive and move beyond the CIO role. CIO's are in a unique position as IT spans all organizational functions, from accounting to marketing. If they can parlay this position of influence across the business the CIO role will become incredibly effective in the coming years.