InformationWeek

February 21, 2000

The Strategic CIO:
The Constant Internal Consultant
What other job, besides perhaps a chief financial officer, touches as many areas of the business as a CIO?

By Larry A. Olson

Larry A. Olson uring a recent dinner with some chief financial officers, the conversation turned to a definition of the CIO in today's business environment. We focused on the strategic value CFOs and CIOs can bring to the business world. One of the CFOs, Doug Tatum, president of a national partnership of interim CFOs, said, "As CFOs, we are getting more and more involved in technology issues that directly impact the corporation's financial position." I responded that today's CIOs not only need to "live" their budgets, but also must understand the financial impact a technology project will have on the company's bottom line.

Throughout dinner, I kept asking myself how would I define the role and responsibility of today's CIO. I felt I had a pretty good idea based on my past experience--simply put, the strategic bridge between technology and business. I also realized that one person was a pretty small and not-very-scientific sample. That's when I decided it would be a valuable service for InformationWeek readers if I surveyed other CIOs to learn how they operate within their constantly changing companies.

For my first subject, I picked Bob Napier, the senior VP and CIO of Compaq. Bob has had more than 25 years of experience as a senior IT executive and reports directly to Mike Capellas, who after a short run as Compaq's CIO was made president and CEO last July (a revealing event in its own right).

Bob and I initially talked about the typical IT organization in 1995; back-office-oriented, safe, low risk--the world of the IT director. Bob quickly pointed out that yesterday's IT director has been transformed into today's CIO, who now owns both the front and back offices--a much more noticeable and risky environment, to say the least.

This really hit home. In 1995, when I was made Pennsylvania's first CIO, I found the state's technology organization decentralized, reactive, and underachieving. When I left last year, technology had become one of the most strategic and successful tools for making Pennsylvania competitive in the 21st century.

Today's CIO supports not only business systems such as human resources and finance, but also the supply chain and, more recently, the selling chain. What other job, besides maybe the CFO's, touches so many areas of the business?

Bob told me he spends most of his time working closely with the heads of Compaq's business units, learning how they operate and what they need. "There's no secret sauce for success," he says. "The CIO's focus and passion needs to be on the business bottom line, not the technology behind it." Bob works daily at understanding his customers' supply chain and has become, in his words, the company's "constant internal consultant."

We also discussed the creation of the "E-corporation" and how it's changing the strategic role of the CIO, whose customers are no longer just the internal business units. The new "E-CIO" is beginning to touch the company's customers directly by supporting the selling chain. To be successful in this new environment, Bob says, the CIO will not only need a solid knowledge base in technology and business, but also in strategic planning, contract management and negotiations, mergers and acquisitions, finance, human resources, marketing, and public relations. As a pre-E-CIO, I feel these traits are critical for any successful CIO--today and tomorrow.

Bob made another interesting point: As the CIO position increases in strategic value to the E-corporation and its board of directors, the job's professional risks will also increase. No longer will the CIO be able to sweep technology mistakes under the carpet or have the luxury of taking down systems for scheduled maintenance. In the new order, mistakes could quickly affect a company's market capitalization, and new E-business systems must be available globally and be able to run around-the-clock.

As I survey other CIOs in future columns, it will be interesting to see how their experiences and insights compare with Bob Napier's thoughts. With change being a constant in today's technology-fueled business environment, the CIO will be a strategic keystone in shaping the future of his or her business. If you know other CIOs from whom you would like to hear, please let me know.

Larry A. Olson is a principal at aligne Inc., a strategic technology practice and a Safeguard Scientifics company. He is the former CIO of the commonwealth of Pennsylvania. Reach him at lolson@safeguard.com.

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