CIO Wisdom – Preface
Best Practices from Silicon Valley’s Leading IT Experts
First edition; 412 pages
( by: Dean Lane)
By Regis McKenna
I’ve had the good fortune to work with many information professionals during my forty years in technology and business marketing. Contrary to the popular notion that the IT professionals are technical nerd or incapable of addressing the needs of customers, I have found that they have much to offer beyond their functional expertise.
More often than not, I am stimulated by their imaginations ands their innovative visions of what is possible. They are men and women who love to exchange ideas, to explore the impact they and their decision have on their companies and customers, and to discuss the nature of their work as well as business processes, leadership, and financial management. Often our conversations revolve around qualitative ideas such as process management, customer empowerment, branding, and the governance of information technologies. IT is taking then to places they had not anticipated, and teaching them to explore well beyond the silos of traditional, hierarchical organizations.
Consider for a moment that IT spending, as a percentage of total corporate capital expenditures, has grown steadily over the past 40 years from roughly 15 percent to an expected 50 percent in the near future. It is no surprise that in this age of information, IT has become a powerful strategic asset, vital to the enterprise. Worldwide expenditures by IT professionals are expected to exceed $1.5 trillion by 2005. This means that the talents, expertise, and investment decisions of the CIO and other information technology professionals will have profound effects on every business process within the modern enterprise.
The term “information age” is not simply a cliché. Indeed, the evidence of its significance is everywhere; it is clear that the modern enterprise has developed an insatiable appetite for easily-accessed, real-time, user-defined information. IT transforms everything- employees, processes, costs, operational inter-dependencies, cultures, competition, productivity, R&D, marketing, and customers. As a result, every industry and business today faces market demands and unforeseen challenges far more complex than ever before. For one thing, IT infrastructures are much more powerful, distributed, complex, universally accessible, and costly than in the past, and these trends will continue. Even as they address the needs of the present, however, executives cannot fail to keep looking beyond the observable horizon.
The most important business trend we have seen in the past few decades, emerging from the dramatic reduction in IT and communication costs, is the growth of network and software-based service economies. Indeed, almost half the employees in the advanced economies of the world market-the United States, Britain, Germany, Japan, and France- are employed in the service sectors. As services evolve, IT becomes a more crucial resource in maintaining customer relationships, managing distribution, discovering value-added revenue growth opportunities, and sustaining competitive productivity.
In the industrial era of the past, many leading corporations saw their manufacturing-based positions fade due to lack of competitive factories and increasing labor costs, which resulted in declines in productivity and competitiveness. When labor began to consume a large percentage of production costs, automation changed the economics of manufacturing and new leaders emerged. This same phenomenon dramatically altered the structure and leadership of the retail and banking industries.
Today, all businesses are facing a similar challenge- only this time, it stems from rising service costs. With approximately 80 percent of American jobs currently related to the service sector, the pressure to expand services while improving productivity will hasten the development of IT supply chain and self-service solutions.
Already, we can see the trend toward IT- based services with such advances as CRM, real-time service networks, dynamic content management, supply chain management, personalization tools, identity management, and the synchronization of diverse data centers with transaction access points. Marketing, for example, is rapidly becoming architecture of mass-customized services. More than half of all marketing infrastructure functions will soon be fulfilled by software and intelligent networks.
The extent to which the modern enterprise has become, in effect, an information resource broker points to the emergence of the information professional and a new kind of leadership. This new leadership has both the general business and relationship skills and the specialized expertise needed to make informed choices and judgments concerning the management of the enterprise’s core asset- information.
The new IT-smart leadership understands that the creative application of information technology is essential for coordinating all the various elements of the business: operations, investment, and innovation, as well as sustaining competitive market positions and customer loyalty. The fact is that most successful enterprises today are energized by high-speed information networks and applications tailored to every function and business process. Functional silos are giving away to networked organizational models, and those who have grasped this concept are well ahead of the game. For it is the IT network that provides the glue that holds the enterprise’s knowledge assets together, and most IT professionals understand very well that it is incumbent on them to understand both the user’s needs and the technology in order to deliver dependable, quality solutions.
Out real-time, complex, inter-connected world demands a rethinking of how best to manage the enterprises of the 21st century. We need more and better knowledge of the information infrastructure and process in order to express imagination and creativity in the necessary context- that is, within a competitive, purposeful, value-added, sustained business process.
Great business leaders are made, not born. Unique, personal experience is what equips individuals to lead. Not all information professionals will bring together the right mix of experience, knowledge, and insight to become successful CEO’s but the CIO is well-positioned to grasp the golden ring because he or she is already on the fast-track learning curve, dynamically engaged with every core function and asset of today’s enterprise. Every element of a successful information age business will find that innovation lies in the knowledge and understanding of the IT-smart executive.
This book was written by a group of IT executives. It is a brief but rewarding glimpse into their thoughts and ideas, not only about their future as IT professionals but about the emerging IT-smart enterprise of the 21st century.