January 8, 2001

http://www.informationweek.com/819/roundtable.htm

IT Execs Speak Out On Technology

ne day before the presidential election results were made official on Dec. 12, a group of CIOs met at Manhattan's venerable 21 Club at InformationWeek's invitation. Led by the maitre d'hotel through the kitchen and along a labyrinth of corridors and stairs, the group convened in a subterranean dining hall lined with wine bottles. Once a swank Gotham speakeasy, the wine cellar on this day was the setting for a luncheon discussion on the topic these executives are most passionate about: technology. In particular, InformationWeek was interested in finding out what these technology managers might want to say to the incoming chief executive. Participants included Peter Bavoso, VP of E-commerce for Darby Group Companies; John Carrow, VP and CIO for Unisys; Mark Goldberg, CIO for Goodwill Industries International; and Sharon Sibigtroth, managing director at AXA Client Solutions. Excerpts of their discussion follow.

InformationWeek: To start, what are the general issues in terms of technology the new president should attend to?

Sibigtroth: Security. Some of the issues related to encryption. Companies have to deal with these issues. We don't always agree with where the government is going; sometimes we're not sure where they're going.

Carrow: There have been some limitations in terms of exportability of U.S. technology products, and legislation has been enacted or is pending in terms of some open border regulations on shipping. The president needs to recognize this is key to the U.S. and global economy, and exports ought to be opened up on a broad basis.

Bavoso: We have a manufacturing plant in the United Kingdom, and we're upgrading the equipment there. We took things for granted because we were simply going to put in new workstations, file servers, and software. Getting the products into the U.K. was one thing. Getting the licensing and everything was something else.

Carrow: There are a lot of global businesses, and the situation just described is indicative of how companies that want to be global need to have flexibility to do things in a very global manner. And there are laws and regulations associated with that--export controls and taxation laws.

InformationWeek: Does the administration need to continue relaxing export controls, or is it more about countries working so we're all on common ground regarding encryption?

Carrow: It's the latter. The flexibility that has been extended by the current administration needs to be continued, and where there are pockets of resistance toward export controls, we ought to try and get those relaxed. Everything is done in balance. We recognize national security interests and this has to be considered, but from an economic perspective, we ought to want to have a fairly moderate policy toward export controls.

Bavoso: The general perception is that it's a whole lot easier to get stuff into this country than it is to get it out. That's the bottom line.

Carrow: There are also the workforce issues. We've got a lot of highly technical workforces outside the United States. We have limitations in terms of [obtaining] visas and coming in to the United States at a point when we have tremendous demand for technical labor.

InformationWeek: That's a hot-button issue. Not everyone agrees more visas should be issued.

Carrow: But look what's going to happen--if you don't do some of that, then the work goes offshore.

Sibigtroth: That hits on another issue as well. We don't seem to invest in our educational system so that we're developing the kind of skilled labor the country needs.

Bavoso: We've all experienced the problem of hiring. I would love to be able to hire native people here if they would come through the door; they don't even come through the door.

Carrow: In the long term, the emphasis has to be on getting the labor from here, whether it's through different educational structuring within universities or through programs within inner cities or workforces that we know exist but aren't trained properly.

Goldberg: It doesn't necessarily have to be funded only by the government. It should be done in conjunction with the private sector.

InformationWeek: What does the president need to know if the IT labor shortage and education aren't addressed?

Sibigtroth: We will fall behind and it will impede our growth.

Goldberg: And we'll continue to bring in offshore resources and workforces. It's about a commitment to look at the digital divide, which is what we're talking about, then turning it into a digital opportunity--and training people and funding programs in the United States. We've got a large group of people who can be retrained to perform high-tech jobs and fill these shortages.

Carrow: The government probably understands the digital divide. The question is whether it's a national priority and whether it's getting the leadership from the top. It's getting to the point that in order to have peace and a good economy, technology has to be a dominant agenda item. And we need skills to support technology.

Sibigtroth: I agree with you. It's similar to those who looked at IT as an expense for many, many years.

Bavoso: Representation in the administration should be more than just someone who thinks about technology; it should be a person who's in a position to do something.

Sibigtroth: Maybe it's a secretary position.

Bavoso: A Secretary of Technology. I don't know what they would call it.

Carrow: There's a bill floating through Congress to do that. Over time, we've seen the role of the CIO become increasingly important, but in my mind it has to go beyond that. It still takes leadership at the top of the organization for a CIO's effectiveness to take place. Just creating a position, whether it's a secretary or a federal CIO or whatever, isn't enough. There has to be the head--that's the president, in this case--of the organization, the administration, to say there's an emphasis on this.

Goldberg: So there has to be support at the top. It sounds like if this were to happen, it would have to be a Cabinet-level position reporting directly to the president.

Bavoso: Because if you're a CIO in an organization that doesn't have the emphasis, or won't put the emphasis on technology, then you're going to lose.

InformationWeek: We know it took years for businesses to understand the potential of IT. Are you saying that it's time for the government to have a better understanding, not just of business and commerce in this country, but also of the role that technology plays in it?

Bavoso: Both for the economy and for improving every American's life. Technology is, whether we like it or not, threaded through our personal lives and our business lives.

Sibigtroth: Today things are not dissimilar to the Industrial Age 100 years ago. It's the same kind of situation--wild and without controls.

InformationWeek: Doesn't it go against the grain of private industry and the private sector in this country for the government to "impose" itself?

Carrow: There's a balance that has to be achieved.

Goldberg: Done in partnership with private industry. Let's work together.

Carrow: Look at the automobile industry. Regulation has brought it from where it was at the start of this century to a fairly refined industry at this point in time.

Bavoso: I grew up in the telecommunications industry. Back in the early '80s my job was very easy, when AT&T did it all. Now we've come full circle, and things are a lot better. My job is a lot more difficult because of the diversity and all the services that are available. But from a consumer's perspective, we can take advantage of the fact that we have more than one provider in the world.

Goldberg: Competition is good.

InformationWeek: One thing the government is talking a lot about is privacy.

Carrow: With privacy, you almost have to talk about security, too. These need to be agenda items. Otherwise, we'll be driven by the rest of the world, and we'll be limited in terms of some of the rules and regulations. If we had better security associated with our systems and our data and how that data is handled across the world, then maybe privacy would be modulated some. I hate to talk about regulation, but maybe there needs to be something more in terms of security than what we have today.

Sibigtroth: With some of the privacy laws--at least from what I've seen with New York and some of the other states--is that early on, the government asked us to get involved in the discussions. They didn't want to come up with an onerous set of rules that no one could actually implement.

Bavoso: But we've got technology. Talk about customer-relationship management--it's nothing more than collecting an enormous amount of data about potential customers. As a business we need it and we think it's a fantastic asset for us. As a private citizen, when I put stuff on the Internet, I'm saying to myself, "Should I really be doing this?" On the Internet, it's kind of free range right now because there are no rules and regulations.

Carrow: But at the same time, we want to be a little cautious about goading the government for regulations.

Bavoso: That's the dilemma.

InformationWeek: There are some standards already--the fair practice standards. But studies indicate Web sites aren't following them. What will standards do if nobody abides by them?

Bavoso: That means there has to be some enforcement.

Carrow: We clearly have the capabilities to do that at the federal level.

Bavoso: But the methodology we can use to collect data is really different on the Internet. People may not even know someone is collecting data about them.

It's not a question of notifying or having regulations. We're technicians. We love technology and the ability to use it is fascinating, but where do you draw the line? When does it become legal or illegal?

Sibigtroth: I do see a change. Since AXA is a financial-services and insurance company, we're seeing a lot more focus on privacy. Our auditors are asking about our privacy policies. They're asking what we do in terms of letting customers opt out, how the data is built into the systems, what we do with the data. Do we sell it externally? How do we utilize it? We're also spending lots of time on the development of some consistent privacy rules on a global basis. It's tough, because you also have to consider other governments' rules. We were talking earlier about having our president work with other countries to get some consistency around the world. Clearly, that's going on in Europe with the European Union.

Carrow: They're normalizing the privacy picture across Europe; as a matter of fact, there's an ISO standard associated with it that provides some pretty good guidelines. It hasn't totally been accepted by U.S. businesses.

InformationWeek: One of you brought up enforcement.

Carrow: The cybercops. The president does have an intelligence community, and they're probably doing some of this already. I know that the FBI is involved in terms of viruses and things like that to try and pinpoint sources. So there are law enforcement agencies that are engaged and doing some policing.

Bavoso: It goes back to our discussion on having priorities and focus. The whole technology arena, and all of the good and bad that's associated with it, has to be focused. Not so much for regulation purposes, so that Big Brother is watching over everything. But certainly the government needs to work with the business community so it can police itself, which is difficult. Let's be honest. This is a capitalistic society, and everybody is looking for an advantage.

Carrow: Theoretically, all this data mining is supposed to make for a better customer experience.

InformationWeek: Do you feel that your businesses understand the issues and are safeguarding consumer privacy?

Sibigtroth: I believe we are. We're spending a fair amount of time with this now and will spend an awful lot of money on it next year, because we don't want the government to come in and start putting in place laws that might be too onerous for us to have to implement.

Bavoso: Because of the products we sell, we're fairly responsible. Most of the data that we collect is about what they purchase. There's really not a lot of private data that we have about our customers.

Carrow: As a company, in order to do business internationally, you have to play by the rules of other countries. So we're kind of self-policing in that respect.

Goldberg: There's a group that Goodwill deals with that we haven't traditionally collected information on--our donors. We're looking to use technology to become more effective with that information, but again being careful and mindful. We won't be selling that information, but we'll use it to remind people we could use donations.

InformationWeek: What are some other issues you feel an incoming administration needs to be aware of?

Carrow: This whole area of E-government probably doesn't get the right level of leadership. Look at all the tremendous productivity gains that have been made with technology and the business-to-business models that have been created to allow for more efficient operations.

Goldberg: If we had voting online, we might have a president, as an example.

InformationWeek: Does the IT community have a solution?

Carrow: We've implemented things in other countries. In Brazil, for example, voting has been automated.

Sibigtroth: There's some online voting in some of the states out West. It's not a technological issue at all.

Bavoso: One of the guys who works for me said he could write a program to do online voting. It's really not magic.

InformationWeek: What would be your message to the president if you had a few minutes with him to discuss technology?

Goldberg: I would say let's attack the digital divide until every American has the opportunity to have access to technology. And work together--the government and the private sector--to train Americans to be computer literate, to be capable of higher-level technology jobs, which, as I said earlier, will improve their lives and improve their communities. There's still unemployment in the United States. Why hire another person offshore until every American has the opportunity to work? The technology train has left the station, and it can only enhance people's lives in the future.

Carrow: I'd say that the key to our economy and our international leadership over the last 10 or 15 years has been in the underpinnings of technology, and we should recognize that will continue for the foreseeable future. Therefore, we need to make it a political agenda item, an important aspect of the administration. We need to set the right policies, get the right skills in place at the national level to provide that leadership. And it starts at the top.

Bavoso: I would say put technology on the agenda, because I don't believe it's on the agenda. They talk about technology in ways politicians talk about what they would do for schools and the money they would throw at it, but that's not what we're talking about. It needs to be on the agenda as much as world affairs, as much as other topics now on the agenda.

Sibigtroth: It needs focus, and you've got to have a stra-tegic plan that you're going to stick with over a substantial period of time with substantial funding that helps both the economy and the individuals in the country. IW

Photos by Bruce Katz

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