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In The Spotlight

Senior executives want their IS managers to be more than plumbers
By Mark Mehler
Issue date: Jan. 27, 1997

Thanks to the World Wide Web, the IS department has stepped into the corporate spotlight. Top executives like Marshall Industries Inc.'s Rob Rodin realize that the Internet has the potential to dramatically change their businesses. CEOs, chief financial officers, and other top managers are embracing their IS chiefs as important members of the inner circle for strategic planning and execution. The Web is the killer app that melds business and technology, the Big Ka huna role that IS has sought for decades.

"Suddenly, content, applications, and infrastructure are one and the same," explains Bruce Guptill, an analyst with Gartner Group Inc., an IT advisory firm in Stamford, Conn. "That forces IS to be businesspeople and businesspeople to understand the role of IS."

In the two years since Marshall Industries created its Web site, the IS department has been instrumental in redefining the company, which had $1.2 billion in sales in fiscal 1996. Though Web sales are only a small part of the company's revenue, they're growing much more rapidly than direct sales, officials note. Marshall's site offers audio and video presentations for its engineering customers, industry news, and more than 300,000 pages of product information.

Rodin structured the company to optimize IS's influence. Each operating unit has its own IS manager, who reports directly to the CEO ( see interview , p. 74) .

Rodin and Marshall Industries are not unique. Top executives in a variety of industries say they increasingly view their IS managers as key contributors to high-level, early-stage strategy sessions.

Indeed, some IS managers are even taking center stage. "Our systems people are no longer trolls hidden away in the back room, supporting our technical disciplines" such as computer-aided design programs, says Sandy Stevenson, general manager of the Grand Rapids, Mich. facilities practice at URS Greiner Inc., an architectural engineering firm in San Francisco.

Stevenson's group designs "smart" schools built to take advantage of the latest computer technologies. "The Web is completely redefining how we deal with clients," he says. "If IS is to help us make that vision work, they've got to get face-to-face with customers and understand exactly what we do."

Higher Hopes
URS Greiner has ambitious goals for its Web site. In addition to posting newspaper articles on its key projects and an i nteractive newsletter, the company wants to set up chat rooms and bulletin boards so its public-school clients can swap information on bond referenda, reengineered curricula, and design ideas.

Achieving such goals requires centralized leadership, and many organizations are relying on their IS managers to take the reins. In a telephone survey of 100 InformationWeek readers, 54% of their organizations had the Web-related development and operational staff reporting to an IS manager. Approximately 40% of the sites said that the Web-related activities were supervised in a matrix of business unit officials and IS managers.

CEOs and other top officials view their IS managers in three new but somewhat overlapping roles. For simplicity's sake, call them conductor, plumber, and interior decorator.

The most visionary executives want the IS department to orchestrate the Web effort for the whole company. URS Greiner's Stevenson, for example, is looking for an IS manager to implement and manage the site, set ha rdware and software standards, provide a design framework, help create content, and pull the whole enterprise together to project a unified face to the world.

Other companies take an even broader view of the IS manager as Web conductor. A CIO can help
coordinate the Web activities of the sales, marketing, administration, and product development departments. "There's enormous potential for a conductor to add strategic value," says Rick Fernandes, senior VP of interactive services at CUC International, a Stamford, Conn., mass marketer of discount home shopping, travel, dining, and other services to 60 million consumers.

"For example, key to our Web marketing is consumer profiling," Fernandes explains. "Anytime someone comes in for a look and doesn't buy, we need to capture an enormous amount of data on that person to help us make better decisions in the future. IS's role encompasses everything from the database architecture to how we use the information. I need my CIO to be a businessman. He's got to set me up with supreme flexibility to manipulate data in ways we haven't even defined yet."

Who Rules?
While such a broad and comprehensive role for IS managers may be somewhat ethereal, everybody wants and needs the down-to-earth skills of what could be considered a Web plumber. IS, at the very least, must enforce standards across an organization, no matter which department runs the Web servers. Operating units may be in charge of Web-related activities at decentralized companies, and the marketing department owns Web operations in centralized companies, but IS makes the rules.

"The conductor role is a gray area for us, but the plumbing function is absolutely central to the success of the Web," says Tom Shea, VP of marketing at New York Life Insurance Co., which launched its first Web site in November. The site features three home pages linking the insurance, asset management, and health benefits units.

"IS has to evaluate what kinds of lines to connect to and what kinds of servers to use, and evaluate proposals from Web developers to determine if they have the skill sets to do the job," says Shea. "It must formulate and set policies for developing a Web site and make sure that, once the policy is set, all the pieces come together."

Web plumbers are reversing a long-term trend toward business units doing an end-run around IS. "It may have been practical to go outside and buy a simple client-server solution," says Shea. "But no business unit has the Web skills or the ability to cement the links throughout the company."

IS managers may not think of themselves as interior decorators, but some of their clients do when it comes to the Web. These organizations have decided that color schemes and other look-and-feel issues are not the sole province of the marketing department. Some banks, for example, are modifying their home-banking software, automated-teller machines, and Web sites to use a common interface that is designed and executed by IS.

Some senior managers expect their I S staffs to be a combination of conductors, plumbers, and interior decorators. For example, Tektronix Inc., a Beaverton, Ore., maker of sophisticated electronic instruments, is a highly decentralized company that looks to IS to provide a mix of infrastructure, operational, and consulting services.

"IS sets the guidelines for look and feel and the hardware and software tools we use. IS runs it and coordinates regular meetings of the Webmasters in each division," says Gerry Perkel, president of the color-printing and imaging division, which accounts for a third of Tektronix's annual sales of around $2 billion.

Indeed, the Web responsibilities of some IS managers have made their departments a unifying force within organizations. Executives say broader roles may help IS managers finally assume the strategic importance they've craved for years. "At last, there's some basis for clarifying the role of IS in large corporations," says New York Life's Shea. "With the Web, there's a real reason for IS to be at t he board table. Now, it may get that long-overdue respect."

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