http://www.informationweek.comInformationWeeken-usCopyright 2012, UBM LLC.2013-05-07T10:54:00ZAs the leader of both IT and operations, John Hinshaw is uniquely positioned to get HP back on track.http://www.informationweek.com/global-cio/interviews/hps-hinshaw-at-center-of-5-year-turnarou/240154290?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioTalk about jumping from the frying pan into the fire. John Hinshaw joined Hewlett-Packard 18 months ago just as his former employer, Boeing, was struggling to get its flagship Dreamliner 787 off the ground and HP was flailing under its third CEO in a year. <P> Things are starting to look up for the Dreamliner, which last week resumed commercial service, with a domestic Ethiopian Airlines flight, following years of delays culminating with the grounding in January of the entire 50-aircraft 787 fleet because of battery problems. <P> At HP, meantime, the five-year-turnaround plan initiated by CEO Meg Whitman last year has entered its second year, as financial results start to show signs of progress even if <a href="http://www.informationweek.com/software/enterprise-applications/hewlett-packard-chairman-ray-lane-resign/240152334">board turnover</a> continues to distract the world's largest ($120 billion in fiscal 2012 revenue) IT vendor. Under Whitman's turnaround plan, 2012 was about diagnosing problems and shoring up HP's process and infrastructure foundation. This year is about fixing those problems and rebuilding, before HP heads into the recovery and expansion parts of its strategy in fiscal 2014 and beyond. <P> At the center of HP's turnaround plan is Whitman's very first executive hire, Hinshaw. As executive VP of technology & operations, he oversees six broad areas encompassing 50,000 employees and contractors: the IT organization (now led by former Kimberly-Clark CIO Ramon Baez and the four business unit CIOs who report to Baez and to their business unit heads); shared services (such as payroll and marketing collateral); real estate (including data and operations centers); security (virtual and physical); sales operations (process and compensation); and global procurement. <P> Hinshaw says his operations responsibilities are a natural fit with his IT oversight, and he sees CIOs at other companies moving in this direction so that "IT-business alignment" is more of a starting point than an end goal. Expansion of the CIO role now tends to start at the "CIO-plus" level, he says: CIO plus procurement, for instance, or CIO plus shared services. He thinks it will go even broader. <P> Beyond aligning internally with business units, CIOs must start meeting more with end customers, Hinshaw insists. He estimates that he now spends 30% to 40% of his time doing just that, in his role as tech vendor as well as IT leader, though he concedes that he spent only about 10% of his time during his four-and-a-half years at Boeing meeting with its airline and government customers. "Today's CIO must be out with customers as much as possible," Hinshaw says. "They must make the time." <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> In terms of HP's internal IT, former CIO Randy Mott, now at General Motors, laid a "good foundation," Hinshaw says, by consolidating 85 company data centers to six, and 6,000 applications to about 1,200, while <a href="http://www.informationweek.com/global-cio/interviews/hp-goes-all-in-with-an-it-transformation/212200747">requiring a rigorous cost-benefit analysis</a> of every new IT project. But Hinshaw says that strategy focused too much on streamlining systems and not enough on improving system capabilities. And those cost-benefit analyses, he says, focused too much on internal goals, such as cutting the time it takes to deliver an IT project, and not enough on business goals, such as helping the sales team shorten the time it takes to turn around a quote for a customer. <P> Along those lines, Hinshaw oversaw what he calls the largest-ever deployment of Salesforce.com software-as-a-service, rationalizing the tools and processes for 30,000 sales reps worldwide. He maintains that only 7% of HP's salespeople gave the company's previous on-premises Siebel CRM software a satisfactory rating, while 70% give the new Salesforce.com system and process a thumbs-up. Granted, that's another internal metric, but he says the improved satisfaction among HP's sales team will lead to faster product delivery times and improved customer service. <P> SaaS is now the default software model at HP, Hinshaw says, owing mostly to the speed with which it can be deployed at large scale (HP's 30,000 seats were live in 18 months), its cost flexibility and the relative ease of upgrading. HP's sales team, for instance, will get a Salesforce.com upgrade four or five times a year, compared with every 18 to 24 months with the Siebel software. <P> Elsewhere, HP will complete a 330,000-seat deployment of Workday's HR SaaS by the end of this year, a system that will get upgraded four times a year. HP's use of DocuSign SaaS for paperless management of contracts already has cut the time it takes the company to sign up a new distributor from about five weeks to four days, Hinshaw estimates. HP's also using Fieldglass SaaS to size up service vendors vying for HP's business and then procure services. And HP is evaluating BigMachines SaaS to accelerate its quote-to-cash process, as well as SaaS providers for billing and travel/expense management.As for the company's global deployment of on-premises SAP software, which HP calls the largest on the planet, Hinshaw says MRP/ERP in the cloud at "HP scale" isn't quite ready for prime time. But he thinks it will be in three to five years. <P> HP is also a voracious user of its own tech products -- and an unabashed self-promoter of that usage. In the area of big data, for instance, it says it's using its own Vertica product to analyze click-stream data to better understand shopping behavior and patterns on HP.com. It's also using Vertica to identify and group common sequences that lead to product warranty events, in an attempt to reduce warranty costs. And it's using its Autonomy software to prioritize its high volume of end-of-quarter orders according to profit margin and other factors so that the most profitable and important orders don't spill into the next quarter. <P> Besides big data, the other three technology megatrends in HP's current world are cloud, security and mobility. But it's not promoting itself as the be-all-and-end-all in each segment -- it's more rounded in security and big data, for instance, than it is in mobile and cloud. As for breakthrough innovations, Hinshaw called out HP's Moonshot ARM servers and 3Par StoreOnce Backup systems. <P> The company's turnaround goes much deeper than products. It's a hugely complex undertaking that requires turning a bureaucratic, culturally hidebound behemoth into a growth-oriented innovator worthy of its two legendary founders. Hinshaw says the culture was "confused" when he joined the company. Among the steps HP is taking to promote an entrepreneurial culture: All offices at the Palo Alto, Calif., headquarters, including those of the top execs, are now cubicles, encouraging co-workers to stop by or shout over a wall rather than plod through endless email strings or secure time on each other's calendars. "It really speeds our decision-making," Hinshaw says. HP has also formed a group called the "bureaucracy busters," whose 20 dedicated people from HR, IT, finance and shared services have started crowdsourcing ideas submitted by employees for improving the way the company conducts business. It's a start. <P> Hinshaw says customers want to see three main things from HP right now: stability and a consistent strategy (which it has had for 18 months); renewed product innovation (there are signs, but the jury's still out); and "one HP face" as they buy from multiple company units (Hinshaw's role across the organization is helping to grease those skids). <P> Even longer term, what HP also needs to build is <a href="http://www.informationweek.com/global-cio/interviews/hp-must-decide-what-it-wants-to-be/231600254">an identity</a>. Under the Mark Hurd regime, it was mostly about cost cutting and efficiency. Under the short-lived Leo Apotheker era, it was about exiting the PC and mobile device businesses (Whitman later pulled back) to focus on higher-margin software and services. Whitman, who Hinshaw calls "the hardest-working boss I ever had" and someone "who can fly at 100,000 feet as well as 500," seems content with maintaining HP's product diversity while emphasizing speed, agility and customer focus. <P> The company's laying the groundwork, but the heavy lifting is far from over. <P> <i>E2 is the only event of its kind, bringing together business and technology leaders across IT, marketing, and other lines of business looking for new ways to evolve their enterprise applications strategy and transform their organizations to achieve business value. Join us June 17-19 for three days of 40+ conference sessions and workshops across eight tracks and discover the latest insights in enterprise social software, big data and analytics, mobility, cloud, SaaS and APIs, UI/UX and more. <a href="http://www.e2conf.com/boston/?_mc=MP_BTMEDIWKAXE">Register for E2 Conference Boston today</a> and save $200 off Full Event Passes, $100 off Conference, or get a FREE Keynote + Expo Pass! </i>2013-04-24T09:08:00ZMike Gregoire says company already analyzes massive amounts of network, system, security and application management data.http://www.informationweek.com/global-cio/interviews/cas-future-devops-mobile-analytics-key-c/240153433?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cio<!-- KINDLE EXCLUDE --> <div class="inlineStoryImage inlineStoryImageRight"> <img src="http://twimgs.com/infoweek/graphics_library/175x175/mike-gregoire-ca.jpg" alt="Mike Gregoire" title="Mike Gregoire" class="img175" /><br /> <div class="storyImageTitle">Mike Gregoire</div> CEO of CA Technologies </div> <!-- /KINDLE EXCLUDE --> New CA Technologies CEO Mike Gregoire covered a lot of ground in his inaugural CA World keynote address to customers on Sunday evening: the consumerization of IT, the Internet of things, big data, cloud computing, the 80/20 IT spending trap, the changing role of the CIO. But in breaking down four "disruptive trends" -- DevOps, mobility, software-as-a-service and management analytics -- he got to the core of CA's diverse product line while providing a glimpse of the software vendor's future direction. <P> Gregoire, on the job for four months following the retirement of Bill McCracken in December, prefaced things by tallying up CA's innovation capacity: more than 5,000 engineers worldwide, more than $600 million a year in R&D spending and a "significant portfolio of intellectual property," mostly in products that help customers deliver, manage and secure their systems, networks and applications. Moving forward, CA will put more emphasis on "organic innovation" -- fewer acquisitions (only one or two a year, Gregoire later told me, compared with the 10 or 15 it did in its heyday) and more internal development. Considering that today's CA is an amalgamation of more than 150 companies acquired over decades, some retrenchment is in order. <P> CA's announcement on Monday of two acquisitions, application delivery vendor Nolio and API management and security vendor Layer 7 Technologies, doesn't quite fit that "organic first" narrative. Both acquisitions do fit into CA's focus on DevOps to help customers with their pressing need to deliver business-differentiating applications faster than ever before. "The old waterfall approach to developing applications in 12 to 18 months won't work anymore," Gregoire said during his CA World keynote. "To be competitive, you have to deliver applications within months at the most, but more often in weeks, even days for some things like mobile applications." <P> The future, he said, is one where development and operations are tightly integrated and highly virtualized, automated and managed -- DevOps. Not surprisingly, CA plays in this area via products that let developers set up virtual lab environments to create, collaborate on and test applications. Nolio's "continuous application delivery" capabilities will fit there. Gregoire cited customer DirectTV, which used <a href="http://www.ca.com/us/products/detail/CA-LISA.aspx">CA LISA Service Virtualization</a> to accelerate app dev and testing "from a month or two to as little as a day." Of course, this isn't a new concept: Using virtual environments to speed up dev projects was one of the earliest and most widely used applications of virtualization technology. <P> By Gregoire's own admission (we spoke on the phone Monday afternoon), mobile is the area where CA is "least mature." <P> "You can find discrete products to manage devices today," he said in his keynote, "but point products will only create islands of solutions. They won&#8217;t help you manage the content and applications being deployed." Neither will CA, for that matter, at least not today. At CA World, it introduced CA Mobile Device Management, software that helps customers manage their mobile devices as well as provision VPN connections, email access, mobile apps and security. CA promised to expand that suite over the next 12 to 18 months to manage mobile apps, content and services as well. Gregoire called CA's mobile effort "one of our biggest organic development programs for 2013 and beyond." CA's formidable rival in cloud and management tools, VMware, launched its Horizon suite of mobile tools in February. Though those tools weren't as complete as some in the VMware community had hoped for, you can expect this to be a continuing area of focus for VMware. <P> <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> Having run HR software-as-a-service vendor Taleo for several years until it was acquired by Oracle for $1.9 billion in early 2012, Gregoire emphasized that he's a "big believer" in SaaS. He cited IDC forecasts that 25% of all new business software purchases by 2016 will be service-enabled. <P> CA was one of the first big software vendors years ago to jump on subscription-based pricing, and CA already offers Clarity Playbook, CloudMinder, eComMinder, Nimsoft Service Desk, APM As-A-Service and other software as a service. CA's "ultimate goal," Gregoire said, is to provide a full suite of services-based management and security features, through both organic development and acquisitions, with "a consistent user interface, integrated back end data repository, mobile access and the ability to deploy third-party management and security applications." He emphasized that customers will have a choice of software delivery model; there won't be any forced marches to SaaS.Such services won't necessarily live in the public cloud, he said. Customers may work with a managed service provider offering private cloud services, build a private cloud behind an internal firewall or go with a private cloud managed by CA. "Our view is that how SaaS is delivered is less important than the underlying attributes of the SaaS model," Gregoire told customers. "For us, SaaS is about higher customer intimacy, great engineering, multiple releases and a quality of code higher than we have ever seen before. It's about sharing detailed roadmaps and helping you move from customizing software to configuring software." <P> No tech executive speech would be complete without an obligatory reference to the growing petabytes -- nay, zettabytes -- of data businesses and consumers are generating each year. "We can talk all we want about big data," Gregoire said, "but masses of data aren't very useful unless we have the means to mine and analyze all that information for insight and business value." For starters, CA's existing stable of products will help companies manage and secure that big data. More ambitiously, Gregoire said the company sees an opportunity to help customers analyze the reams of data they collect from their CA network, system and application management and security systems in order to help them optimize their IT environments -- sort of what recent IPO darling <a href="http://www.splunk.com">Splunk</a> helps customers do with their machine log data, but on a wider internal scale. <P> "One of the advantages we have over a lot of new companies getting into the management analytics game is that we have the data," Gregoire said, noting that CA software analyzes 600 million mainframe records, closes out more than 380 million trading transactions, processes more than 42 million authentications and monitors more than 100,000 devices on global networks every day. He added: "With the right analytics, this data could help [customers] develop new products, introduce new services and identify new market opportunities." For example, he said CA is helping a customer use big data to improve online fraud analytics. <P> But it's unclear how CA plans to approach this opportunity. Will it build analytics capabilities into its management and security software? Will it partner with analytics vendors to offer consulting or other services? Gregoire would say only that CA intends to "leverage this technology in future products and solutions." <P> The strategy sounds familiar. In the late 1990s, CA touted how its patented "Neugent" (queue up <a href="http://en.wikipedia.org/wiki/Cat_Scratch_Fever]">"Cat Scratch Fever"</a>) artificial intelligence technology would help customers analyze network and system information to forecast outages and other problems and plot their infrastructure management strategies. But that predictive analytics effort amounted to little more than vaporware. CA still has a lot to prove here. <P> Gregoire isn't oblivious to customer skepticism, ending his keynote: "Technology is always about the future, about the next big thing. Sometimes it pans out, sometimes it doesn't. And people in IT tend to be realists. You've heard the hype too many times." <P> He added: "We don't underestimate the challenges, for you or for ourselves, but we think they pale next to the opportunities. It all comes down to a question I asked in the beginning: Are you going to drive these changes, or are you going to be driven by them?" <P>2013-04-04T09:06:00ZHow can IT leaders drive profitable business innovation when they're so caught up in their day-to-day work? Learn from your peers who've done it.http://www.informationweek.com/global-cio/interviews/cios-must-innovate-or-go-home/240152220?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioIt's now well understood that a company's and nation's long-term economic health is only as strong as its ability to innovate. What's not so well understood is exactly how to stimulate that innovation, though there's no shortage of consultants, academics, politicians, executives (and journalists) willing to offer a well-formed or semi-formed opinion on the subject. <P> The trendy POV is pessimism. On a macroeconomic level, there's an expanding school of thought that this country's most innovative days are behind it. Economist <a href="http://www.nber.org/papers/w18315">Robert J. Gordon worries</a> about an aging workforce, insufficient education, onerous regulations, rising debt and other "headwinds," combined with "the fact that so many fundamental one-time-only inventions have already occurred." PayPal founder Peter Thiel and chess grandmaster Garry Kasparov argue that the U.S. has "<a href="http://www.ft.com/intl/cms/s/0/8adeca00-2996-11e2-a5ca-00144feabdc0.html">discarded a century of can-do ambition</a> built on rapid advances in technology and replaced it with a cautiousness far too satisfied with incremental improvements." Nobel laureate <a href="http://opinionator.blogs.nytimes.com/2013/02/24/less-innovation-more-inequality/">Edmund S. Phelps maintains</a> that executives' preoccupation with the next fiscal quarter and bankers' reluctance to loan money for "projects for new products and methods" have, with a few exceptions (Silicon Valley, biotech, clean energy), led to a decline in everyday innovation. <P> Even those optimistic about the state of innovation offer arguments that are less than convincing. In concluding that the "fundamental drivers of growth are stronger than they have ever been in human history," Boston Consulting Group cites its recent executive survey, which finds that executives worldwide plan to invest more in R&D and profess a renewed commitment to innovation -- as if lots of spending and the best intentions are a better measure of success than the quality of what's being produced. BCG's choice of the 50 most innovative companies in the world, skewed toward the highest-profile players in just four industries, <a href="http://www.informationweek.com/global-cio/interviews/innovation-in-spotlight-but-wrong-cast/240146503">bears out its flawed analysis</a>. <P> Pessimism about innovation on a microeconomic level takes a different form. In my discussions with CIOs and other execs, it seems that the biggest obstacle is a structural one: How do companies and IT organizations go about carving out the time and formal responsibility for driving profitable innovation when they're so caught up in their day-to-day work? <P> That question is the premise of a conference <em>InformationWeek</em> will host on May 8 around the theme "<a href="http://www.interop.com/lasvegas/conference/cio.php?_mc=MP_BTMEDIWKBOD">Innovate Or Go Home: The CIO's Critical Role In Driving Growth, Opportunity and Breakthrough Ideas</a>." This one-day learning and networking event, presented in conjunction with Interop at the Mandalay Bay Convention Center in Las Vegas, will feature innovation champions from the likes of the San Francisco Giants, Union Pacific, Allstate, ADP, General Electric, Intermountain Healthcare, Forrester Research and Sears. <P> <a href="http://www.informationweek.com/global-cio/interviews/san-francisco-giants-bill-schlough-infor/240144065">Giants CIO Bill Schlough</a>, for example, will delve into how he and his team accelerate innovation at the reigning World Series champs, working with baseball operations, ticketing, marketing and every other facet of the organization. Union Pacific CIO Lynden Tennison will discuss how financial incentives and peer voting are promoting a culture of innovation within the railroad's 1,400-person IT organization. Allstate executive VP Suren Gupta will describe how his technology organization is working with the insurer's other business units to host "innovation blitzes," 10-day sprints that solicit and vet employee input on a specific business problem or opportunity. Intermountain Healthcare CTO Frederick Holston and director of innovation Todd Dunn will discuss how the provider's Healthcare Transformation Lab goes about conceiving, funding, developing and delivering new products and services. <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> There's no shortage of innovation organizations and officers within Fortune 1000 companies. What the best organizations seem to have in common: They take into account their companies' need to drive long-term, sustainable business opportunities without ever losing sight of their short-term need to boost profits and shareholder value. When they break out innovation as a separate discipline or department, they seek ideas from different stakeholders -- technologists, salespeople, marketers, financiers, business developers -- and they're very careful <em>not</em> to build ivory towers that are dismissed, even loathed by the rest of the enterprise. Getting the balance right is a huge part of the innovation challenge. <P> Formal innovation groups or teams tend to work best when they rotate employees in and out and deliver projects in reasonable time frames, something ADP CIO Michael Capone will discuss at the <em>InformationWeek</em> summit. Think in terms of creative collaborators rather than elite SWAT teams, and deliverables of six to 12 months rather than years. The best innovation teams don't "own" innovation as much as they draw it out, help set the priorities, facilitate collaboration and execution, and manage the risks. <P> <a href="http://www.informationweek.com/healthcare/leadership/cio-profiles-keith-j-figlioli-of-premier/240149734">Keith J. Figlioli</a>, senior VP of healthcare informatics at Premier Healthcare Alliance, says his entire organization thinks about the business in three buckets: manage and run the core, build adjacent businesses, and innovate for future opportunities. "We let our teams play around in each of these areas," he says. "Teams get to have focused time to think through how our business will change and what we need to do in order to change with it." <P> The short answer is that there's no single way or set of best practices to drive innovation. But we can learn a lot from the senior IT and other executives who have taken on this challenge, made some mistakes and have some meaningful results to show for their best efforts. <P> We encourage you to join us on May 8 in Las Vegas as we roll up our sleeves with those executives. <P> <i>Attend Interop Las Vegas, May 6-10, and learn the emerging trends in information risk management and security. Use Priority Code MPIWK by April 29 to save an additional $200 off All Access and Conference Passes. Join us in Las Vegas for access to 125+ workshops and conference classes, 300+ exhibiting companies, and the latest technology. <a href="http://www.interop.com/lasvegas/?_mc=MP_BTMEDIWKAXE">Register for Interop today</a>! </i>2013-03-22T09:06:00ZThe title 'chief digital officer' may yet go the way of the 'chief evangelist,' but the digital business movement is a force CIOs can't ignore.http://www.informationweek.com/global-cio/interviews/cios-must-embrace-digital-business/240151400?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cio<!-- KINDLE EXCLUDE --><div class="inlineStoryImage inlineStoryImageRight"><a href="http://www.informationweek.com/software/productivity-applications/office-2013-10-questions-to-ask/240150037"><img src="http://twimgs.com/informationweek/galleries/automated/959/01_Intro_175.jpg" alt="Office 2013: 10 Questions To Ask" title="Office 2013: 10 Questions To Ask" class="img175" /></a><br /> <div class="storyImageTitle">Office 2013: 10 Questions To Ask</div> <span class="inlinelargerView">(click image for slideshow)</span> </div><!-- /KINDLE EXCLUDE -->In his March 18 magazine cover story, <a href="https://www.informationweek.com/big-data/commentary/big-data-analytics/goodbye-it-hello-digital-business/240150200?cid=SBX_iwk_related_mostpopular_Storage_systems_storage&itc=SBX_iwk_related_mostpopular_Storage_systems_storage">"Goodbye IT, Hello Digital Business,"</a> InformationWeek editor Chris Murphy exhorts IT organizations to get out of their "back-office, support-the-business role" and finally become developers of "products and apps that customers use directly" -- that is, take the reins of the modern "digital business." <P> The MO of the digital business is that it's adept at using mobile, social and analytics platforms to boost sales and <a href="http://www.informationweek.com/global-cio/interviews/20-great-ideas-to-steal-in-2012/240006553">improve marketing and customer service</a>. Those CIOs who aren't at the center of their companies' e-commerce, social networking, mobile application and CRM initiatives risk being shunted into an infrastructure and operations role -- to the non-growth, non-happening parts of their companies. <P> Consider the digital business that Starbucks has become. Since creating Digital Ventures, a marketing-IT partnership funded like a startup in 2009, Starbucks has become a retail leader in mobile payments, improved its loyalty card system with complementary smartphone apps and other innovations, and created a nationwide digital network that offers free in-store Wi-Fi and third-party content. Those responsibilities now fall mainly to chief digital officer Adam Brotman. <P> <strong>[ Considering Jive for a social business platform? Read <a href="http://www.informationweek.com/global-cio/interviews/chubb-cio-explains-his-no-stress-social/240151063?itc=edit_in_body_cross">Chubb CIO Explains His No-Stress Social Rollout</a>. ]</strong> <P> Starbucks CIO Curt Gartner, meantime, oversees what the company calls global technology and engineering services, including retail technology, software engineering, information security, finance systems and global infrastructure. <P> Both sets of responsibilities are critical, and both executives are members of Starbucks' senior leadership team. And while Garner's responsibilities appear to paint him into the "infrastructure and operations" corner, he led the revamp of the company's entire in-store retail system, which greatly improved Starbucks' traditional customer service and is the platform for in-store mobile payments. Garner's software engineering team is the backbone of Digital Ventures innovations. <P> Or consider the evolving role of Dow Chemical's long-time CIO, David Kepler, who recently added the title of chief sustainability officer and appended "business services" to his CIO title. As part of his business services charter, Kepler oversees processes, purchasing, environment, health and safety (EH&S) and shared services. Dave Bent, CIO of office supply wholesaler United Stationers, added the title of VP of e-business services as he took on responsibility for a business unit that sells marketing services and software to United's retail customers. <P> Titles come and go. This isn't about the title -- chief digital officer may yet go the way of the chief evangelist. It's about the role of business technology leaders in a commercial world that puts a premium on innovation and growth and considers everything else a cost center. Especially as more and more applications and infrastructure get moved to the cloud or to some offshore third party, IT leaders whose main job is to keep the lights on will be fewer and farther between. <P> <!-- KINDLE EXCLUDE --><!-- GLOBAL CIO GLOBE --><div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"><div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"><a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a><div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div><span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span></div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> Look at what happened to the central CIO job in the <a href="http://www.informationweek.com/government/leadership/uk-government-who-needs-a-cio/240151037">British government</a>. As my colleague Gary Flood reports, the British Cabinet Office announced earlier this month that it had eliminated the government CIO position, mostly because it had devolved into that of a procurement and supplier manager, not a champion and facilitator of cross-agency innovation. So the powers that be decided to move those operational responsibilities to the Cabinet Office's Government Digital Service group, under GDS executive director Mike Bracken. <P> Reports Flood: "You don't need a CIO if, as Bracken holds, you are moving away from a large procurement approach to technology and are becoming 'adept at commissioning and co-delivering digital public services' instead." In other words, individual British government departments were getting really good at deploying their own digital services, so it was decided they don't need a CIO overseer. The rough parallel in enterprise IT is when the marketing, sales, HR and other departments start buying more of their applications and infrastructure on their own when they see their CIOs as little more than slow-moving, even obstructionist purchasing agents and IT standards enforcers. <P> As I argued in a recent column, <a href="http://www.informationweek.com/global-cio/interviews/are-the-cio-and-it-organization-replacea/240008574">"Are The CIO And IT Organization Replaceable?"</a> CIOs shouldn't apologize for their technical expertise and experience. CIOs must be technically savvy just as CFOs must be financially savvy. But CIOs are in a unique position to take on more of a central <i>innovation</i> role, as their IT organizations are "already intertwined (or should be) with every other company department," I wrote. And in keeping with the digital business mantra, they must take on formal customer-facing responsibilities outside of traditional IT -- in e-commerce, customer loyalty, product development and other core business areas. <P> This isn't to suggest that every CIO needs to run a business and be a rain maker. At the other extreme, however, our recent Global CIO survey finds that the customer-facing CIO is still the rare exception. Only 33% of the 188 IT executives who responded to our survey said their key IT staffers regularly visit with customers, only 23% said their CIOs regularly visit with customers, and a scant 19% said their CIO leads their company's e-commerce or customer-facing Web operations. Those percentages are too low. Speaking at a breakfast meeting in Tampa recently, I asked the audience of mostly CIOs: Who among you meets regularly with customers? One or two hands went up. The prevailing sentiment: We know we should get out more, but we're just too busy with day-to-day operations. <P> <i>Nominate your company for the 2013 <a href="http://www.surveygizmo.com/s3/1009971/2013IW500pre-reg?iwid=pl">InformationWeek 500</a> -- our 25th annual ranking of the country's most innovative users of business technology. Deadline is April 12. Organizations with $250 million or more in revenue may pre-register now to receive more information.</i>2013-02-28T11:20:00ZNew CEO Marissa Mayer wants all company employees to work in the office. This isn't about exercising control; it's about setting a tone for change.http://www.informationweek.com/global-cio/interviews/yahoo-flap-misses-the-bigger-point/240149694?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioYahoo CEO Marissa Mayer is under fire for doing the unthinkable: She's requiring company employees to actually work at the workplace. <P> That's right. In an era when just about everyone but coal miners and longshoremen thinks telecommuting is their birthright, Mayer is ordering all of Yahoo's 11,500 employees to show up at the office every day, starting in June. <P> The rationale: Employees become more creative and innovative when they work together face to face rather than over <a href="http://www.informationweek.com/global-cio/trends/did-yahoos-mayer-slap-social-in-the-face/240149561">email, IM, video chats, wikis and other virtual means</a>. "Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people and impromptu team meetings," Yahoo HR director Jackie Reses wrote in a <a href="http://allthingsd.com/20130222/physically-together-heres-the-internal-yahoo-no-work-from-home-memo-which-extends-beyond-remote-workers">memo to employees</a>, obtained and posted by <i>All Things D</i>. "Speed and quality are often sacrificed when we work from home. We need to be one Yahoo, and that starts with physically being together." <P> Besides collaboration, there's another "c" word in play here: culture. It can be tough to build and maintain a strong, cohesive one when a good number of employees (it's at least several hundred in the case of Yahoo) rarely make their way to campus. Perhaps Mayer, a former Google executive on the job at Yahoo for only seven months, found the collegial energy lacking during her early tours of the company's offices. <P> Or maybe she just decided to shake up the status quo. Clearly, the old way of doing things wasn't paying rich dividends for the Internet company, given its stagnant revenue and earnings. Yahoo's stock price has popped of late -- closing at $21.16 Wednesday, near its four-year high -- only because Mayer has refreshed the company's email, photo-sharing and other products while a revamped board considers acquisitions (mobile, anyone?) as well as divestitures of non-core assets in Asia and elsewhere. <P> By requiring all employees to work in the office, Mayer is making a statement: We're all in this together. If Yahoo doesn't have your full attention, seek employment elsewhere. <P> While critics complain that Mayer is being less than hospitable to working parents, especially mothers (Mayer herself gave birth to her first child last fall), she didn't take the job to break glass ceilings or champion work-life balance. Her job is to turn Yahoo around, and she's taking her best shot. This isn't about exercising control; it's about setting a tone for change. <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> This situation reminds me of my own experience with new corporate management a bunch of years ago. The CEO of our new parent company observed at the time that our offices felt more like a stodgy bank than a vibrant media company, so he ordered a wholesale remodeling, to an open floor plan. No more rat's nest of offices, but a wide open environment where everyone could see -- and collaborate with -- everyone else with relative ease. <P> I didn't like the idea. I told our business unit CEO at the time that it wouldn't work: not enough privacy, not enough space for our supplies, too much intermingling of church and state disciplines, too many blasted distractions. <P> And I was dead wrong (and later admitted as much to our CEO). Yeah, the open office can be loud and distracting at times. But that's part of the beauty. There's a new energy about the place. We collaborate more. We grab people for ad hoc conversations, when before we would have huddled over our computers in solitude. We get to know people we used to just nod at in the hallway. <P> We needed a shake-up, and most of us couldn't see that at the time. We do in hindsight. <P> Give Marissa Mayer a little slack. All companies and cultures are different. Mayer has more insight into what Yahoo needs than the work-at-home true believers. Telecommuting policies might serve Pricewaterhouse Coopers and Aetna and myriad other companies (including my own) quite well, but they might not work for Yahoo at this point in its transformation. As the company said in a statement on Tuesday, amid the backlash: "This isn't a broad industry view on working from home -- this is about what is right for Yahoo, right now."2013-02-27T11:49:00ZA 'virtual march' on Washington aims to bring more highly skilled technical workers into the U.S. It's time for a constructive debate rather than more vitriol.http://www.informationweek.com/global-cio/interviews/immigration-reform-find-the-middle-groun/240149579?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioThe U.S. IT industry and a cadre of high-profile supporters are organizing a "virtual march" on Washington to lobby for what they call "innovation-focused immigration reform." Essentially, they want the federal government to make it easier for U.S. companies to hire and retain highly skilled and educated foreign professionals by issuing more work visas for those pros and even fast-tracking them for U.S. citizenship. <P> Notwithstanding the fact that virtual marches -- sans signs, chants and the passion of a physical protest -- are about as riveting as virtual pie eating contests, the movement is drawing a lot of attention. A similar virtual movement a year ago helped to defeat the <a href="http://www.informationweek.com/security/government/sopa-backers-lose-ground/232500136">SOPA and PIPA</a> antipiracy bills that were before Congress at the time, so there are high expectations for this one. <P> The front organization for the <a href="http://www.marchforinnovation.com">March For Innovation</a> is <a href="http://www.renewoureconomy.org ">Partnership For A New American Economy</a>, whose members are business and municipal leaders from across the country. Among its activists are New York City Mayor Michael Bloomberg, AOL co-founder Steve Case, venture capitalist Jalak Jobanputra and Consumer Electronics Association CEO Gary Shapiro. The goal of the march is to sign up thousands of supporters and then have them take to social media to pressure Congress to let more foreign nationals work in the U.S. <P> <strong>[ Are your best employees heading for the door? Maybe it <em>is</em> you. See <a href="http://www.informationweek.com/global-cio/interviews/4-it-leadership-failures-that-make-emplo/240149266?itc=edit_in_body_cross">4 IT Leadership Failures That Make Employees Leave</a>. ]</strong> <P> A <a href="http://online.wsj.com/article/SB10001424127887324048904578320141944040664.html">column in <i>The Wall Street Journal</a></i> by former publisher L. Gordon Crovitz mostly covers the march organizers' talking points. Among them: Every 100 foreigners who earn advanced degrees in the U.S. and then stay to work in technical fields create 262 jobs for American workers; 28% of all companies started in the U.S. in 2011 were founded by an immigrant; immigrants are more than twice as likely as a native-born American citizen to start a company; immigrant-owned businesses generated more than $775 billion in revenue in 2011. Each talking point (the group offers several others) links to research reports that support the group's claims. <P> At the heart of the movement is the notion that other countries are reforming their immigration laws to attract entrepreneurs and technical experts while the U.S. is turning them away. Australia, for instance, has used a point-based system since 1973 to evaluate prospective immigrants based on their potential economic contributions, prioritizing skill over country of origin. Likewise, Germany gives scientists, senior managers and other highly educated workers from other countries access to long-term visas, and it has opened up citizenship to entrepreneurs. <P> The evidence that immigrants can be a powerful engine of economic growth is compelling, no question. And in principle I'm partial to the view that highly skilled foreigners <a href="http://www.informationweek.com/global-cio/interviews/foreigners-dont-take-it-jobs-they-create/231902699">don't take away IT jobs</a> as much as they create them. We as a nation should be concerned when many of the most talented people honed by our universities have no choice but to head home after graduation to start companies and make existing ones more competitive. We must overhaul this nation's visa and immigration policies to put more emphasis on economic need and less emphasis on numerical fairness, all while stanching the flow of illegal immigration. <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> That said, this is a messy, gray, fluid issue. Who ultimately decides the economic value of a visa or immigration applicant -- a panel of bureaucrats or some corruptible public-private panel? Markets can change quickly. Yesterday's shortage of Cobol or Java programmers can turn into today's glut. How often do the legislators and visa and immigration panels update the rules to reflect those changes? <P> Engineer salary levels are stagnant in the U.S., despite the fact that tech employers complain of a dire labor shortage. So how many foreign-born engineers should we fast track for U.S. work visas and/or citizenship -- enough so that domestic salaries get depressed 10%, 20%? Ideally, visas and immigration would be loosened only for those engineering (and other) disciplines where the salary evidence suggests a true shortage, but it's unrealistic to expect the government gatekeepers to keep track of supply and demand for a range of technical specialties. <P> Longer term, critics complain that tech employers made their own bed. If not enough young people are piling into the STEM (science, technology, engineering and math) fields, it's because they've watched companies ship many of those jobs offshore, the critics say. <P> Who's going to break this chicken and egg impasse? Will tech employers start bringing jobs back to the U.S., sending a signal to young people and their families that the STEM fields are a vibrant career opportunity? Or will students start gravitating back to STEM studies on their own, sending a signal to employers that they needn't relocate so much of their technical operations abroad or seek to import so many talented professionals? In my view, the ball's in the employers' court: Show the American public that you're truly committed to investing in a U.S.-based tech workforce, and this country will turn out STEM graduates in droves -- or it will give you the freedom to import what you can't find. <P> This debate, if you can call it a debate, is getting old (read the vitriolic comments underneath Crovitz's <em>Wall Street Journal</em> piece) because both sides refuse to listen to each other. It's not the greedy tech capitalists versus the rank-and-file malcontents, so stop ignoring each other's concerns as if they're irrelevant or nonexistent. There's a middle ground here, somewhere. And it can be found within the structure of debating and writing an immigration reform bill. <P> Find that middle ground. This virtual march on Washington is as good a place as any to start.2013-02-04T09:06:00ZData-driven commerce is an economic good, not a bad, so we shouldn't consider taxing it like carbon emissions.http://www.informationweek.com/global-cio/interviews/the-taxman-cometh-for-big-data-driven-co/240147677?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioAmid soaring national deficits and debt, the powers that be complain that certain companies aren't paying their "fair share" of taxes. A new report commissioned by the French government but gaining some attention in the U.S. and elsewhere recommends changing national and international tax rules to extract more money from Internet companies in particular in order to prop up government spending. <P> The notion is that Internet titans such as Google and Amazon pay only a fraction of the taxes they ought to pay because the nature of their digital businesses lets them locate much of their profit-making operations in low-tax countries. The proposed solution: Tax those companies' "intensive use of data" in the country where that data is collected, Nicolas Colin, one of the authors of <a href="http://www.forbes.com/sites/singularity/2013/01/28/corporate-tax-2-0-why-france-and-the-world-need-a-new-tax-system-for-the-digital-age/#more-1313">the controversial report</a>, writes on Forbes.com. <P> The reasoning goes something like this: Internet companies collect all kinds of user data to deliver targeted advertising, customize products, make recommendations, adjust prices and drive any number of other profit-making endeavors. Those users, in effect, "become part of business operations," Colin writes, in some cases replacing employees and contractors. And because those users aren't paid like employees, their "free work" lets tech companies "reach the highest economies of scale and massive profitability," he says. Yet the taxman can't have at the full extent of those high profits when they're on the books in other countries. <P> "In every sector, innovative tech companies make their way into the value chain, focus on the most strategic point (usually client or user relationship), collect data, and leverage it to siphon off the profit margins from entire industries," Colin writes. "The Internet of things only accelerates this process, as it enables tech companies to grow beyond pure-playing business models and enter new markets, like payment, cars or energy. <P> "As the digital economy keeps growing, every sector's margin will be relocated abroad, disappearing from our GDP and depriving the government from additional revenue that should normally ensue from higher productivity." <P> The report's broad goal is to recommend a way for developed countries to "recover the power to tax profits made by giant tech companies" based in those countries. So who exactly are these "giant tech companies" to be subjected to this new form of data-based taxation? We hear about Google and Amazon, and it's easy enough to extrapolate the thinking to the likes of eBay and Facebook. But is Wal-Mart a giant tech company? Is Procter & Gamble? Are General Motors and Ford? Because each of them (and thousands more) is collecting many terabytes of customer and other data to fuel their businesses. <P> Another obvious question: What will be the process for determining the amount of taxable data? It's an idea that reeks of imprecision. <P> <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> Colin acknowledges that because "the value of data is not yet mastered, the goal should not be to tax data collection per se. Instead it should be to create an incentive for businesses that rely on regular and systematic monitoring to adopt compliant practices in favor of user empowerment and innovation." Huh? Is the proposal to tax data collection or not? <P> Stating that "no country can reach this goal alone," Colin urges both the European Union and global Organization for Economic Cooperation and Development to begin negotiating new tax rules and treaties. "A new definition of a permanent establishment, specifically introduced for the data-driven economy, should be based on the notion of users as co-creators of value," he writes. <P> Colin goes on to say that overhauling tax policy based on data collection is part of what it will take to complete <a href="http://www.investopedia.com/terms/c/creativedestruction.asp ">the process of "creative destruction,"</a> first described by Austrian-American economist Joseph Schumpeter in the 1940s. But his analysis has the creative destruction principle exactly backward. What Schumpeter had in mind was to allow the demise of has-been companies and industries to make way for new, more creative and innovative ones, not to hamstring the most creative and innovative ones with clever new tax techniques. <P> A fundamental assumption of the report is that governments deprived of fat tax revenues from new economy companies are themselves fiscally responsible. They're not. In the U.S. and elsewhere, no matter the party in power, governments have shown little interest in balancing their budgets. They need to spend the money they now collect more wisely, not turn to pie-in-the-sky Internet taxation schemes. <P> But I digress. Even if you think governments need more revenue, this is a loony way to get it. The report's authors go so far as to compare their tax scheme to the one proposed in the Kyoto Protocol, whereby countries levy a tax on a company's carbon emissions -- as if leveraging data for competitive advantage is somehow congruous with polluting the environment. Data-driven commerce is an economic good, not a bad, even if companies misuse that data from time to time.2013-01-17T11:18:00ZBoston Consulting Group shines a klieg light on innovation, but lots of leading companies and industries go unnoticed.http://www.informationweek.com/global-cio/interviews/innovation-in-spotlight-but-wrong-cast/240146503?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioAt a time when economists are lamenting a prolonged lapse into slow growth and incremental innovation, Boston Consulting Group is taking a different tack. Based largely on its survey of 1,512 executives at a range of companies worldwide, it concludes that innovation and the "fundamental drivers of growth are stronger than they have ever been in human history." <P> BCG roughly defines innovation as the ability to create value from new ideas, "whether those ideas are new to the world or new to a particular company." Seventy six percent of the executives the consulting firm surveyed last year ranked innovation as a top three strategic priority, the highest level in the survey's eight-year history, and 24% ranked it as priority No. 1. The executives are putting their money with their mouths are: 69% say their companies will increase their spending on innovation this year, the highest percentage in six years and up from 61% in 2010, the last time BCG conducted its survey. <P> Companies in emerging markets put even more emphasis on innovation than those in developed markets: 90% of Indian executives and 89% of South American executives, for example, rank innovation as a top three priority, compared with 66% of U.S. executives. Within Europe, executives in Germany are the most bullish on innovation; execs in Italy and Spain the least. <P> Having just written a column on this subject, arguing that <a href="http://www.informationweek.com/global-cio/interviews/is-technology-innovation-too-incremental/240142291">innovation is alive and well</a> despite rampant pessimism, I endorse BCG's optimistic conclusions. However, the firm's choices for the 50 most innovative companies in the world, a ranking it bases on its executive survey and its own analysis of the companies' financial returns, is thin. (Access the <a href="http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-125372">full report and ranking here</a>.) <P> For one thing, 13 of the top 15 companies on its list hail from just two industries: technology and automotive. Now no one's a bigger fan of tech industry innovation than I am, but to posit that the world's top seven innovators come from this one industry suggests that the ranking is more about brand equity -- which companies are top of mind for global executives -- than it is the result of a rigorous, industry-by-industry analysis of who's producing the most compelling products and services. <P> Apple, for instance, has been No. 1 on the list for the past seven years. That's fine for one, two or three of those years, but seven in a row? The iPhone, iPad and app store constructs were indeed game-changing innovations in their day, but Apple's continued dominance of BCG's innovation list is more a reflection of its world-beating market cap and high profile than its ability to keep producing truly new, category-redefining products. <P> <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> The top auto industry innovators? Hyundai, Toyota, Ford, Kia and BMW, lined up one after another from Nos. 10 to 14. Yet Toyota continues to be rattled by quality defects and recalls. Meantime, show us the seminal innovations in 2012 from the likes of No. 17 Coca-Cola (caffeine-free Diet Cherry Coke?), No. 18 Dell (a nice consolidation of its market position, but &#8230;), No. 20 Wal-Mart (more everyday low prices?) and No. 30 Anheuser-Busch (Bud Light Lime?). <P> BCG's top 50 ranking is heavily skewed toward just four industries: top heavy on technology and automotive, plus industrial products/processes and consumer/retail. No pharma, no healthcare, no agriculture, no logistics. Only one company on the list (Shell, at No. 35) comes from energy, despite industry-wide breakthroughs for tapping billions of gallons of previously inaccessible oil and gas reserves, portending a shift in the global balance of power. The only company from financial services, an industry on the cutting edge of tech-based innovation, is HSBC (No. 28), in a year in which the bank agreed to pay a record $1.92 billion fine for money laundering. Perhaps its legal defense, resulting in no executive indictments, was considered innovative. <P> Noting the absence of pharma companies in its ranking, BCG cites the industry's "risk-averse culture" since 2007, when five such companies -- Amgen, Genentech, Johnson & Johnson, Merck and Pfizer -- graced its list. The reason for that caution? "Significantly more commercial and regulatory uncertainty and the rise of more difficult-to-treat chronic diseases," the firm says. BCG calls out Pfizer, which increased its R&D spending from $8.1 billion to $9.1 billion between 2007 and 2011 but reduced that spending as a percentage of revenue. <P> What about the myriad breakthroughs, many of them tech-based, at healthcare providers such as University of Pittsburgh Medical Center, Beth Israel Deaconess Medical Center and Memorial Sloan-Kettering Cancer Institute? Even if they're not all public, they have a public track record of product and service innovation. <P> No ranking is perfect and innovation can be a mercurial concept. BCG deserves credit for calling attention to innovation on a global scale. At the inaugural <a href="http://www.interop.com/lasvegas/conference/cio.php"><em>InformationWeek</em> CIO Summit</a>, to be held May 8 in Las Vegas in conjunction with Interop, we'll bring together leading executives to discuss the CIO's and IT organization's critical role in driving innovation. Drop me a note at the address below if you're interested in participating in this important conversation.2013-01-09T12:30:00ZEven if higher education is an industry and calling like no other, it must grow and evolve with its tech-literate clientele. Or it will whither.http://www.informationweek.com/education/leadership/informationweek-education-your-new-guide/240145815?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioEvery industry tends to think its IT challenges are unique, and higher education is no exception. Its resources are especially scarce. Its goals and motives aren't inherently commercial. The services it provides are fundamentally different from those of other enterprises and institutions. <P> But like any enterprise, colleges and universities are ripe for technology disruption as customer expectations change and competitive alternatives emerge. Resistance is futile. <P> I've seen such resistance in other industries. In healthcare, for example, doctors, nurses and other key stakeholders used to insist (many still do) that IT advances could do only so much to improve patient care and provider efficiency. What worked for those other industries won't work here, they said. We're different. <P> And then came a federal electronic health record mandate and years of IT-based transformation, still underway. Turns out the healthcare industry isn't so different. It isn't a pretty transformation; IT-based ones rarely are. They're rife with vendor snake oil and standards battles and unrealistic expectations and unfulfilled promises. But they're inevitable in a day and age when people -- customers, especially the young -- expect a rich technology experience with all of their product and service providers. And it's inevitable at a time when our nation realizes it must try to do something to try to rein in ever-rising healthcare costs. <P> After writing a column in May 2011 suggesting that the <a href="http://www.informationweek.com/global-cio/careers/down-to-business-higher-education-is-ri/229500624">higher education sector</a> is just as prone to tech-based disruption and business model destruction as the financial services, bookselling and other industries, a respected, veteran computer science professor wrote me: "nonsense." <P> "A research university is not a 'business,'" he wrote, "and notwithstanding <em>The Wall Street Journal</em>'s view that business is everything, scientists, engineers and teachers do what they do not for profit, but for the advancement of all mankind." Two of the examples I had used to illustrate the disruptive and destructive effects of IT -- E.F. Hutton and Borders, done in (in part) by modern online alternatives -- can't be compared to colleges and universities, the professor argued, "since neither of those are attempting to convey deep scientific concepts." <P> Point taken. No such comparison is ever perfect. But the crux of my column at the time was that as higher education costs soar (fees jumped 15% between 2008 and 2010, according to a 2012 U.S. Department of Education report) and student/parent debt mounts (student loan debt exceeded credit card debt for the first time in 2010), colleges and universities will find themselves under intense pressure to deliver more value for the money. Already, <em>USA Today</em> reports, university systems in Arizona, California, Iowa, Maine, Minnesota and New Hampshire have <a href="http://www.usatoday.com/story/news/nation/2012/11/11/state-universities-tuition-freeze-budget-cuts/1698379/">proposed to keep tuition steady</a> for state residents in exchange for receiving steady or higher taxpayer funding. <P> I also suggested in that column that online universities and courseware will rise quickly as an alternative to the pricier status quo, and that traditional institutions of higher learning need to reevaluate their business models and offerings to stay viable long term. <P> My point wasn't and isn't that colleges are only as strong as their smart boards, Wi-Fi networks and distance learning programs, or that they'll all be replaced overnight -- or even in the next 10 years -- by the University of Phoenix and its like. But technology <i>will</i> play an ever-bigger role in higher education, just as it has and is in other sectors, as a means to attract customers and keep costs down. <P> Some sacred cows will be slaughtered. Bet on it. <P> What's the difference between a lecture hall with 500 students listening to a star professor at UCLA, or nine lecture halls of 500 students each across nine campuses in the California state university system listening to that star professor over high-definition telepresence? Maybe that star professor even rotates among the schools, so that each gets a chance to see the professor live. That's still cheaper than employing 10 such professors. Such a setup won't work for every course, especially those in medicine and the sciences that require hands-on learning, but it will work for some. It's just one example of what's possible. <P> Distance learning programs of all sorts will grow in size and scope as employers give them more credibility and as the technology that lets remote students collaborate with their instructors improves. Financially strapped California is taking a keen interest: Higher ed leaders in the state, including policy-makers and academics, convened at UCLA on Jan. 8 to discuss the potential for online education to lower costs and improve quality. Expect other states to do the same. <P> In their seminal book <em><a href="http://www.amazon.com/Disrupting-Class-Disruptive-Innovation-Change/dp/0071592067">Disrupting Class: How Disruptive Innovation Will Change The Way The World Learns</em></a> (McGraw-Hill, 2008), Harvard professor Clayton M. Christensen and co-authors Michael B. Horn and Curtis W. Johnson challenged U.S. educators to use technology to craft customized and "student-centric" curriculums, in many cases outside the traditional classroom structure. The authors argued that most mainstream educators just apply IT to existing lesson planning, teaching and testing processes. Meantime, the more individualized and market-oriented approaches of charter schools, private tutors and companies that provide online curriculums will become more affordable as they become the norm rather than the exception, said the authors, who went so far as to predict that online courses will account for half of high school enrollments by 2020. <P> Having a son who just completed his first semester at university, I can attest to the value (even at exorbitant expense) of the traditional on-campus experience in honing learning and independent-thinking skills. Not only is my son regularly interacting with people of different backgrounds and viewpoints, but he's also learning how to get along with roommates and floormates, manage his own time and academic workload, and deal with university-issue bureaucracy and arrogance ... without mom and dad's interference. You can't get those life experiences by logging on from home. <P> But it would be a big mistake for college educators and administrators to think that technology-intensive learning, whether on campus or off, is just a marginal, incremental consideration. Even if higher education is an industry and calling like no other, it must grow and evolve with its tech-literate clientele. Or it will whither. <P> Such is the philosophy and coverage mandate of <em>InformationWeek Education</em>, our new website and quarterly digital magazine for technology executives and managers at colleges and universities. <em>InformationWeek Education</em> will bring the enterprise IT credentials and credibility of <em>InformationWeek</em>, providing news, analysis and expert commentary on the technology issues reshaping higher ed. Coverage areas will range from the latest digital learning and course management systems to mobility, cloud computing, analytics, enterprise applications, security, privacy, networking and much more. We'll also enlist CIOs, academics and administrators at colleges and universities to write about their frontline experiences and challenges with technology. <P> Read more on <a href="http://www.informationweek.com/education"><em>InformationWeek Education</em></a>. And when you have a chance, please drop me a note at the address below to suggest ways we can better serve this vital community.2012-11-26T09:06:00ZAre you an aspiring CIO? Listen to what these leading CIOs say it will take for you to reach that coveted position.http://www.informationweek.com/global-cio/interviews/what-cios-want-in-their-successors/240142418?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cio<!-- KINDLE EXCLUDE --> <div class="inlineStoryImage inlineStoryImageRight"> <a href="http://www.informationweek.com/news/galleries/global-cio/interviews/232700431"><img src="http://twimgs.com/informationweek/galleries/automated/772/01_Steve-Haindl_tn.jpg" alt="10 CIOs: Career Decisions I'd Do Over" title="10 CIOs: Career Decisions I'd Do Over" class="img175" /></a><br /> <div class="storyImageTitle">10 CIOs: Career Decisions I'd Do Over</div> <span class="inlinelargerView">(click image for larger view and for slideshow)</span></div> <!-- /KINDLE EXCLUDE --> So you aspire to become a CIO, or at least move well up the chain of command. It's a complex job that requires a range of technical and business skills and experience. Just understanding the nuances of "the business" isn't enough -- it's long past time for CIOs to move beyond the "alignment" rhetoric and get on with creating customer-focused business opportunities powered by technology. <P> I recently participated in a panel session at <a href="http://www.interop.in/">Interop Mumbai</a> in which four leading Indian CIOs discussed the attributes they're looking for in a successor. In preparation for that session, I talked with four CIOs in the U.S. about the same subject. Here's what they say they're looking for in their top people. <P> <strong>Multidimensional leaders.</strong> "They may be brilliant technologists, but without the business engagement and leadership skills, they will not make it to the higher level," says Dave Bent, CIO of United Stationers, who advises would-be CIOs to gain experience in a variety of business and IT roles. <P> Jerry Johnson, CIO of Pacific Northwest National Laboratories, a research lab under the auspices of the Department of Energy, puts the emphasis on breadth of IT experience: software development, infrastructure, operations, architecture, project management. "Consequently, I encourage -- but don't force -- lateral movement within the organization," he says. <P> <strong>[ The role of the CIO is changing. These innovations can help you keep pace. See <a href="http://www.informationweek.com/global-cio/trends/5-innovative-ideas-for-enterprise-cios/240142317?itc=edit_in_body_cross">5 Innovative Ideas For Enterprise CIOs</a>. ]</strong> <P> <strong>Customer-focused product and brand champions.</strong> By "customer," we're not talking about the company's IT users. We're talking about the people who buy your company's products. Do you meet and talk with them on a regular basis? Do you know them? <P> Customer skills are particularly important for CIOs at technology companies, where the CIO often doubles as a dog-food-eating product spokesman. But a customer orientation is critical for all CIOs, says Kent Kushar, CIO of <a href="http://www.informationweek.com/global-cio/interviews/how-gallo-brings-analytics-into-the-wine/240006776">E. & J. Gallo Winery</a>, who's as comfortable at wine-tasting events discussing vintages and palate taste zones (I've seen him in action) as he is at board meetings explaining analytics and supply chain management. <P> The best CIOs consider themselves retailers and bankers and manufacturers first, technologists second. (But don't underestimate the value of being a first-class, well-rounded technologist.) <P> <strong>Players.</strong> The best CIOs get to know, on both a professional and personal level, the senior line execs responsible for delivering their companies' core business results. "They ask them how things really work, how decisions get made," says <em>InformationWeek</em>'s <a href="http://www.informationweek.com/global-cio/interviews/secret-cio-meet-the-manager-who-will-rep/229200270">Secret CIO</a>, who works for a $1 billion-plus company. "They figure out the results those execs are accountable for and, most important, how the execs' performance is measured." <P> Bent wants CIO candidates to have had exposure at the board level. "The CIO has to have the same broad leadership characteristics as any other C-level position -- listening, communicating, as well as leading," he says. Rajesh Uppal, CIO of Indian carmaker Maruti Suzuki, says tomorrow's IT leaders must "empathize with and understand their users and then come back and offer some value." <P> <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> <strong>Battle-tested warriors.</strong> CIO candidates must show demonstrable wins on projects, IT and otherwise. "The best indicator of success is success," Kushar says. Our Secret CIO relates the time he asked one of his direct reports to improve customer satisfaction with the company's phone system. "She established call-handling benchmarks. She interviewed VPs and LOB managers to understand how they measured customer satisfaction. She learned about call centers. She talked with customers. She put a technology project in place as well, and when process changes were completed, she demonstrated, using the same metrics, that satisfaction levels had increased significantly." <P> <strong>Self-starters and go-getters.</strong> Arun Gupta, CIO of Indian pharmaceutical company <a href="http://www.informationweek.com/global-cio/interviews/when-incremental-it-change-wont-cut-it/240010562">Cipla</a>, is looking to add 35 IT specialists to the 17 people now in the company's core IT group, among them a chief information security officer and SAP lead. "Are they going to put their neck on the block, irrespective of whether I agree or disagree?" Gupta says. <P> V. Subramaniam, Asia-Pacific CIO of Otis Elevator, says he wants people with "fire in the belly and fire in the eyes." He also emphasizes "the discipline of the execution. They have to make things happen, without excuses." <P> <i>For the 16th consecutive year, InformationWeek is conducting its U.S. IT Salary Survey. To date, more than 200,000 IT professionals have participated in this survey. Take our <a href="http://informationweek.2013ITSalarySurvey.sgizmo.com/s3/?iwid=pl">InformationWeek 2013 U.S. IT Salary Survey</a> now, and be eligible to win some great prizes. Survey ends Jan. 18. </i>2012-11-19T11:02:00ZTwo prominent big thinkers think it is. But I&#8217;m not buying their unsupported arguments.http://www.informationweek.com/global-cio/interviews/is-technology-innovation-too-incremental/240142291?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioGarry Kasparov and Peter Thiel, in a <a href="http://www.ft.com/intl/cms/s/0/8adeca00-2996-11e2-a5ca-00144feabdc0.html#axzz2CKkhPSgF">recent column</a> for the <em>Financial Times</em>, argue that true innovation-led economic and social progress is a thing of the past. Ever since the breakthroughs of the 1950s and '60s (jet aviation, the integrated circuit, nuclear power, communications satellites), this country has "discarded a century of can-do ambition built on rapid advances in technology and replaced it with a cautiousness far too satisfied with incremental improvements," the authors argue. <P> The column is breathtaking in its sweeping, unsupported generalizations and its omission of countless examples to the contrary. Apparently lost on Kasparov, a former chess champion beaten in his prime by a masterfully programmed supercomputer, and Thiel, a co-founder of PayPal, a product of the Internet revolution that has transformed how people pay for goods and services, is the irony of their untenable position given their own run-ins and rich experiences with innovative technology. <P> "The genuine progress in IT from the 1970s up to the 2000s," they write, "masked the relative stagnation of energy, transportation, space, materials, agriculture and medicine." Really? <P> Stem cell research is the integrated circuit of modern healthcare, a seminal breakthrough that promises to drive cures for decades to come. Is the mapping of the human genome an "incremental" advance? What about techniques for tapping billions of gallons of previously inaccessible natural gas and oil reserves? What about the launch of the Hubble telescope and the automated exploration of Mars and other planets? What about the mass production of electricity-powered cars? The world's population has doubled since 1970, partly because healthcare advances have lengthened life spans, and somehow food supplies managed to keep pace -- all while the agriculture industry stagnated? <P> Thiel's a sharp guy and a contrarian thinker. I cited his provocative "education bubble" thesis in a column last year, in which I agreed with him and went on to argue that the <a href="http://www.informationweek.com/global-cio/careers/down-to-business-higher-education-is-ri/229500624">higher education market is ripe for technology disruption</a>. Kasparov, the Russian chess master and political activist, is clearly no intellectual slouch either. Which makes their diatribe in the <em>Financial Times</em> all the more perplexing. It says at the end of their column that they were due to participate that evening in a debate on technology at the Oxford Union, so maybe they were testing the waters by firing a few torpedoes. <P> <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> At least the authors give the IT industry some props -- sort of. "Today when people say 'tech' they think of a small cohort of computer-related companies rather than the continuing transformation of every industry that people envisioned back in the 1950s," they lament. Perhaps the reason people don't think of the likes of FedEx and Vail Resorts and John Deere and Union Pacific when they think "tech" is because those companies' profound technological advances are now so ingrained in the customer experience or are so embedded in their supporting infrastructures that people take those advances for granted. <P> Technology's ability to transform companies and industries isn't a function of how high profile that technology is, but how valuable it is in improving products (simple online package tracking, a social skiing experience, remote diagnoses of vehicle problems, efficient and reliable freight hauling), as well as in improving supply chain management, manufacturing, distribution, sales, marketing and other support functions -- without sticking out like a sore thumb. <P> The rest of the <em>Financial Times</em> column is a jumble of non-sequiturs about short-sighted investment practices, the inability (and ability) of governments to foster innovation, the systemic shortcomings of Apple and Google, and the merits of private versus public corporate ownership -- all to exhort the masses to accelerate the pace of technical innovation. "Above all the future will be created by individuals," say the authors. No kidding. Then what? <P> <i>Predictive analysis is getting faster, more accurate and more accessible. Combined with big data, it's driving a new age of experiments. Also in the new, all-digital <a href="http://www.informationweek.com/gogreen/111912/?k=axxe&cid=article_axxt_os">Advanced Analytics</a> issue of InformationWeek: Are project management offices a waste of money? (Free registration required.)</i> <P> <!-- KINDLE EXCLUDE --> <center> <div id="printfeaturePDFpromo"><div class="printfeaturePDFCover"><a href="http://reports.informationweek.com/abstract/83/9496/IT-Business-Strategy/informationweek-december-17-2012.html?k=axxe&cid=article_axxe_os"><img src="http://twimgs.com/infoweek/1354/smallcov2.jpg" alt="InformationWeek: Dec. 17, 2012 Issue" title="InformationWeek: Dec. 17, 2012 Issue" /></a></div> <div class="printfeaturePDFCopy"><strong><a href="url_to_come">Download a free PDF of <nobr><em>InformationWeek</em> magazine</nobr></a><br /> (registration required)</strong></div> <div class="clearBoth"></div> </div> </center> <!-- /KINDLE EXCLUDE --> <P>2012-11-05T09:06:00ZCIOs need to be technical, without apology, just as chief medical officers need not apologize for their grounding in medicine.http://www.informationweek.com/news/240012735?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioAre people losing respect for the CIO profession, or have they just lost their perspective? While other C-level executives command authority and are lauded for IT savvy if they know how to buy a cloud service, CIOs are nitpicked for spending too much time on their core technology competency and not enough time parked in other parts of the business. <P> In a recent column, "<a href="http://www.informationweek.com/global-cio/interviews/are-the-cio-and-it-organization-replacea/240008574">Are The CIO And IT Organization Replaceable?</a>" I wrote that CIOs need to form stronger bonds with their C-level peers and take on formal responsibilities outside of the IT organization. One former CIO, CEO and COO wrote to me to object. Why do other C-level execs think they can assume the IT function, he wrote, and why do CIOs appear to have an "inferiority complex" about their technical capabilities? The writer, Steven Poole, whose career spanned senior executive positions in the public and private sectors in Canada, raised other valid points. <P> Some clarifications are in order. CIOs need to be technical, without apology, just as chief medical officers need not apologize for their grounding in medicine. CIOs don't necessarily need a degree in computer science or engineering, but they must have experience managing and developing applications, systems, projects and architectures. <P> There are exceptions to this rule: the HR or customer service exec who steps in and runs a first-class IT organization. But those execs are usually placed in the CIO position to fix a dysfunctional organization, institute cost discipline, bring silos together or instill a customer focus. And then they're rotated out. Rarely does the nontechnical CIO thrive in that position long term. <P> But that doesn't mean CIOs should rest on their technical laurels either. While Poole noted that other chiefs (HR, marketing, finance, etc.) "are generally quite secure in their seat in the executive boardroom" without feeling pressure to move outside their core competencies, CIOs sit in a different place. Because they're building systems for sales, marketing, logistics and other departments, CIOs must understand those areas far better than the average exec. And don't think for a minute that other executives aren't called on to expand their expertise, and even move into positions outside of their core areas. <P> Consider the CFO position. In a 2005 report titled "<a href="http://www.boozallen.com/media/file/145602.pdf">The Activist CFO</a>," CFO Research Services and Booz Allen Hamilton urged chief financial officers "to take on an expanded and increasingly activist role within their companies ... not just supporting the business with information and analysis, but also ensuring that the entire enterprise delivers on its commitments." The study went on to say that while the activist CFO "may sound a lot like a CEO, an overall leader of the enterprise and a super-line manager," he or she must remain committed to the core job: finance. <P> <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> Likewise, we're not asking "activist CIOs" to become superheroes, but we're urging them to get more experience in operational and customer-facing roles. Whether that experience requires formal stints in sales or procurement or manufacturing or customer service -- or just a more hands-on relationship with the people running those areas -- depends on the organization and executive. <P> When I recently asked one leading CIO (who came up through the technical ranks) what he's looking for in a successor, he immediately talked about breadth of experience, and not just in IT. "I would personally like to see more rotations through business roles than we have managed to date," he said. That's not because he has an inferiority complex about the importance of technical acumen. It's because he understands that when your position is intertwined with so many lines of business, it's essential to truly understand their processes, challenges and opportunities. <P> In the end, I don't think Poole's view is all that different from mine. "CIOs have a unique position because of their influence on information and business processes," he wrote. "Any CIO who only manages IT operations is clearly not contributing sufficiently at a C level. This is no different from the CFO who is really just an accountant or the [chief human resources officer] who is merely a recruiter." <P> Poole continued: "A good CIO knows how to leverage IT to enable the business in a manner that is evident to the executive team. The principle is the same for all C-level executives. CIOs simply need to take their seat at the C-level table."2012-10-29T09:06:00ZFor Indian pharma company Cipla and its new CIO, IT transformation is all or nothing.http://www.informationweek.com/news/240010562?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioNo business technology buzzword gets worn out quite like "transformation," but there's no other way to describe what Indian pharmaceutical company Cipla is embarking on. <P> The 77-year-old company, publicly traded but family controlled, is one of the world's largest generic drug makers, with a presence in more than 170 countries (half its revenue comes from India). But until six months ago, it didn't have a CIO and was the poster child for shadow IT. Each company department negotiated with tech vendors on its own, deployed its own systems, and then looped in the IT department -- which consisted of only 17 core internal people, serving a company with 20,000 employees. <P> Enter Arun Gupta, whom Cipla recruited earlier this year from retailer Shoppers Stop to bring discipline and vision to the company's IT. I caught up with the soft-spoken Gupta earlier this month at Interop Mumbai, where he put his IT transformation efforts into the context of a broader business restructuring underway at Cipla, which has also brought in new chiefs of HR, supply chain, international marketing, strategy, legal, and other functions over the past half year. <P> Early on, in talking with colleagues and employees about their views of the company's IT, Gupta says he heard three main complaints: IT doesn't deliver what we need; we can't get the information we need when we need it; and we have too many systems that don't interoperate. <P> It's not for lack of investment. Cipla spends about 1% of its $1.4 billion in annual revenue on IT, and it's "not shy about investing in people, processes and manufacturing facilities," Gupta says. The problem was lack of coordination and oversight of the company's myriad IT vendors and systems. <P> <strong>[ A new <em>InformationWeek</em> survey says IT has reason to worry. See <a href="http://www.informationweek.com/global-cio/interviews/business-users-satisfied-with-it-think-a/240009535?itc=edit_in_body_cross">Business Users Satisfied With IT? Think Again</a>. ]</strong> <P> Gupta's first major step was to consolidate Cipla's six data centers to a single collocated one and revamp its network around a mix of multiprotocol label switching (MPLS) and <a href="http://en.wikipedia.org/wiki/Metro_Ethernet">metro Ethernet</a> links. The company's ongoing application rationalization is a "bit more complex," he says. The plan is to reduce more than 600 database servers to 100 and reduce the company's scores of ERP, CRM, HR, document management, laboratory information management and other pharma-specific apps to about 15 total. Gupta says he's also fixing Cipla's "broken" implementations of Pilgrim (quality assurance and compliance) and IBM Cognos (business intelligence) software. <P> <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> Looking to make a difference on the frontlines, he's focusing on Cipla's medical reps: the employees who sell the company's products to doctors. Already, Cipla is one of the few pharma companies that doesn't pay its reps based on sales, he says, and it wants to enhance its reps' engagement with doctors with a new off-the-shelf software tool that lets them share information on clinical trials and medical studies. The goal is to increase the average time a rep spends with a doctor from one minute to five, a small but significant increase. Gupta estimates that the new tool also helps reps save as much as three hours a day on planning and reporting activities: accessing customer data, tracking sales activity and filing expense reports. <P> Cipla plans to replace the 8,000 laptops its reps use with 10,000 <a href="http://www.informationweek.com/software/windows8/ballmer-windows-has-great-tablets-for-th/240010024">Windows 8 tablets</a>. It will pilot the tablets with about 200 reps over the next few months before rolling out the devices, from multiple OEMs, next year. <P> Gupta is also trying to get his arms around Cipla's sprawling supply chain of distributors and resellers to improve on-time delivery, which he estimates was in the low teens when he took the job. Cipla's starting with process improvements, adopting <a href="http://www.pinnacle-strategies.com/articles/ToCResults.pdf">theory of constraints</a> methodologies before turning to technology. <P> Next up is a big bang SAP ERP implementation -- starting with financial accounting, sales and distribution, production planning and materials management, and purchase and order management -- to replace 40-plus custom systems. "Every process will change," Gupta says. "There will be disruption from day one." The rollout is due to start in January and finish by 2015. <P> Meantime, Gupta is building up Cipla's in-house IT capabilities. A goal over the next 12 months is to add 35 IT specialists beyond those 17 in the core IT group. For example, a SAP lead will join the company next month and hire his own team; same for a chief information security officer Gupta is recruiting. In the process, Cipla will gradually wean itself off its dependence on IT vendors, integrators and consultants -- much like CIO Randy Mott is doing at <a href="http://www.informationweek.com/global-cio/interviews/general-motors-will-slash-outsourcing-in/240002892">General Motors</a> under his own recently launched IT "transformation" effort, though that's on a much larger scale. <P> Gupta, like Mott, realizes he doesn't have the luxury of making incremental changes. He figures Cipla is 10 to 15 years behind others when it comes to IT best practices, and all Cipla executives are under pressure to accelerate company growth to the 30% to 35% range. <P> In the past, Cipla was averse to doing such a massive ERP implementation, for instance, "but now there's no choice" Gupta says. "If we don't do it, it will start impacting the business."2012-10-08T08:58:00ZTechnology spending and influence are moving outside of the IT department, but let's not lay a wreath for the IT pro just yet.http://www.informationweek.com/news/240008574?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioThe new conventional wisdom is that the CIO and IT organization are becoming relics, as business technology decision-making and purchasing move into marketing, sales, HR, and other departments. Who needs a big IT organization, the reasoning goes, when tech-savvy line-of-business workers and their managers can buy the server capacity, storage, applications, and devices they need with a few clicks and a credit card? <P> In a column titled <a href="http://www.informationweek.com/global-cio/interviews/new-face-of-it-line-of-business-execs/240008153">"New Face Of IT: Line Of Business Execs,"</a> <em>InformationWeek</em> contributor Patrick Houston relates the example of LivingSocial, a Groupon-like startup whose HR chief, Jennifer Trzepacz, ramped up cloud-based recruiting, payroll, and employee performance-management systems in next to no time--all without an IT department. Concludes Houston: "Trzepacz and others like her--managers who know their disciplines more intimately than IT could--are destined to command ever bigger shares of enterprise technology budgets." <P> Adding fuel to the debate are two recent reports that conclude that marketing departments, whose spending on IT already is growing two to three times faster than other IT spending, are taking matters into their own hands. Gartner predicts that by 2017, <a href="http://my.gartner.com/portal/server.pt?open=512&objID=202&mode=2&PageID=5553&resId=1871515&ref=Webin">marketing departments will spend more on IT than the IT organizations</a> at those companies. And IBM, in a survey of 1,700 CMOs, found that 23% of them now rely extensively on external partnerships for IT initiatives--but 61% think they'll rely extensively on them over the next three to five years. <P> <strong>[ Do you underpromise and overdeliver? Read <a href="http://www.informationweek.com/global-cio/interviews/hypesters-put-it-credibility-on-the-line/240008035?itc=edit_in_body_cross">Hypesters Put IT Credibility On The Line</a>. ]</strong> <P> The findings of a recent <em>InformationWeek</em> survey of IT and non-IT pros seem to pile on. Close to three-fourths of the respondents to that survey said they consider their IT department to be an also-ran when it comes to innovation, lending credence to the notion that other departments will fill the void. <P> And it's not just a bunch of navel gazers who see a shift coming. <em>InformationWeek</em> contributor Larry Tieman, a former senior IT executive at FedEx, thinks the IT organization of the future "will be <a href="http://www.informationweek.com/global-cio/interviews/why-the-cio-position-is-in-jeopardy/240001607">a smaller, more externally focused, higher-expertise IT organization</a>, with most of the infrastructure and operational expertise outsourced. What the internal IT pros will be doing, what their expertise will be in, and what role the CIO will play (if there is one) are still undetermined." <P> But before we start laying a wreath for the IT organization and dedicated IT professional, let's step back. A few caveats: <P> -- Not every company is a startup. LivingSocial may function fine (for now) without an IT department, but companies with myriad legacy systems to manage, competitors to one-up, and regulations to comply with need in-house IT chops--in integration, security, application development, analytics, networking, and much more. "Just put it all in the cloud" works for only the smallest companies. And it's not necessarily an old world vs. new world divide. Consider the extensive in-house IT infrastructure work (servers, storage, networking, data center cooling, power) done by Google, one of the biggest cloud proponents. <P> <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> -- The challenge before IT organizations is to earn a position at the center of innovation, not just plod along in a support and maintenance role--a role that 39% of the IT pros and 54% of the non-IT pros in our survey see as their IT organization's main focus. IT is uniquely positioned to lead that innovation charge, as it's already intertwined (or should be) with every other company department. But CIOs must establish formal partnerships with other department chiefs, not just get on a conference call with them from time to time. <P> For example, Allstate runs crowdsourced "innovation blitzes" out of its IT organization, whose executive VP, Suren Gupta, also sits on an innovation council that includes top execs from the insurer's product, claims, financial, operations, investments, and sales departments. USAA, under its Agile Labs, puts developers together with subject matter experts and customer service reps to create fast prototypes of new products and product enhancements. USAA estimates that the initiative lets it go to market 40% faster than before. <a href="http://www.informationweek.com/global-cio/interviews/beth-israel-deaconess-medical-center-emb/240006766">Beth Israel Deaconess Medical Center, the No. 1 company in the 2012 <em>InformationWeek 500</em> ranking</a>, pulls IT and business leaders together under fast-track committees that develop business priorities and match IT resources. "These leaders are working to formalize tech innovation as part of everyday business, because the reality is that business units aren't always going to ask for IT's help anymore," <a href="http://www.informationweek.com/global-cio/interviews/why-business-doesnt-look-to-it-for-innov/240008408">writes my colleague Eric Lundquist</a>. <P> -- Meantime, CIOs need to take on roles outside of the IT organization. Among our <em>InformationWeek 500</em> companies, 34% of CIOs are responsible for innovation, 33% for business process management and improvement, 13% for operations, 13% for procurement, 12% for business services, 5% for logistics and supply chain, and 30% for some other function. Only 15% of those <em>IW 500</em> CIOs have no official responsibility outside of IT. <P> In the end, though, technical expertise is still critical. Asked to respond to the question "What's the fastest way into my doghouse," Richard Thomas, CIO of biopharmaceutical services company Quintiles, which ranked No. 6 on the 2012 <em>IW 500</em>, said: "Working in IT but not understanding technology. If you work in IT, I expect you to know what you're talking about."2012-10-03T08:00:00ZBusiness technology leaders and managers need to get into the habit of underpromising and overdelivering.http://www.informationweek.com/news/240008035?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cio No one's more bullish than <i>InformationWeek</i> on the opportunities in front of CIOs and their companies for breakthrough IT innovation. Our recent <a href="http://www.informationweek.com/1343/" target="_blank"><i>InformationWeek 500</i></a> ranking and profiles chronicled and celebrated some extraordinary best practices across U.S. industries.</p> <P> But every IT project isn't a home run; every IT investment doesn't pay for itself 10 times over in a matter of months. Meantime, setbacks and screwups are inevitable. </p> <P> <a href="http://www.informationweek.com/global-cio/interviews/8-it-mistakes-must-have-lessons-from-top/240007998" target="_blank">As my colleague Chris Murphy lays out in his "Mistakes" feature</a>: "The best companies stare their IT mistakes straight in the eye. They don't tiptoe around them. They don't rename them 'teaching moments' or 'issues.' They don't play blame games. They lay their mistakes bare so that their teams can improve."</p> <P> They also don't promise the moon. Think about the ERP and Y2K boondoggles of the 1990s, and more recently all of the hype around Big Data and the Social Enterprise. Those IT-centric efforts had and have the potential to deliver meaningful, even extraordinary business value, but some temperance is in order. Rather than trumpet out-of-the-box "business transformation," forecast incredible cost savings, or insist that the sky will fall without this or that investment, business technology leaders and managers need to go back to underpromising and overdelivering. </p> <P> They'll have that much more cred the next time they're advocating a big overhaul or investment.</p> <P> <strong>Hype On A Grand Scale</strong></p> <P> A case study in IT hype on a grand scale is the healthcare industry's promise of hundreds of billions of dollars in savings and improved care with the move to electronic health records. <a href="http://online.wsj.com/article/SB10000872396390443847404577627041964831020.html" target="_blank">In a recent column in The Wall Street Journal</a>, two respected researchers--one from Harvard University and the other from the University of Pennsylvania--argue that health IT has in fact done little to reduce the cost of care and improve quality. </p> <P> "As applied researchers and evaluators, we actively work to realize both goals," the authors say. "But this will require an accurate appraisal of the technology's successes and failures, not a mixture of cheerleading and financial pressure by government agencies based on unsubstantiated promises."</p> <P> It's not that healthcare IT is somehow unimportant; it's an absolutely essential part of doing business and providing care in a modern, electronic world. Bold healthcare IT advances--such as the Clinical Query informatics <a href="http://www.informationweek.com/global-cio/interviews/beth-israel-deaconess-medical-center-emb/240006766" target="_blank">platform developed by Harvard's Beth Israel Deaconess Medical Center</a> (the No. 1 company in this year's <i>InformationWeek 500</i>) to do population-based data analyses--show the extraordinary potential of IT to improve treatment and even prevent diseases. </p> <P> But to suggest that digitizing records and processes will improve care and save hospitals and other medical practitioners (and their patients) hundreds of billions of dollars overnight --as the industry promised while lobbying the government to provide financial incentives to EHR buyers--was wishful at best and deceptive at worst. </p> <P> Such unfulfilled promises, like the ones with ERP and Y2K in a different era and the ones with Big Data and the Social Enterprise today, are a blot on the reputation of business technology in general.</p> <P> A recent American Airlines announcement shows the problem on a much smaller scale. In touting the fact that its pilots will use iPads to store onboard reference materials and other documentation rather than tote 35-pound bags of paper on every flight, American estimated that the lighter tablets will save the company $1.2 million a year on fuel. Really, by eliminating a sack of paper per flight? Even if such a marginal move could yield that kind of annual savings, American is flying into a stiff headwind when it comes to lightening its flight cargo: Passenger obesity trends alone will more than offset any fuel savings from the lighter tablets. And did American factor the cost of the iPads into its $1.2 million savings estimate?</p> <P> OK, we're all in the PR business in one way or another. But be careful how far you and your colleagues stretch the truth. Credibility is a very fragile thing. </P> <P> <center><a href="http://www.informationweek.com/1343"><img src="http://twimgs.com/infoweek/1343/1343_500_return_to_homepage.gif" width="299" height="45" hspace="0" vspace="0" alt="Go to the 2012 InformationWeek 500 homepage" title="Go to the 2012 InformationWeek 500 homepage" border="0"/></a></center></p> <P> <!-- KINDLE EXCLUDE --> <center> <div id="printfeaturePDFpromo"><div class="printfeaturePDFCover"><a href="http://reports.informationweek.com/abstract/19/9060/Network-Infrastructure/informationweek-october-8-2012.html?k=axxe&cid=article_axxe_os"><img src="http://twimgs.com/infoweek/1345/smallcov.jpg" alt="InformationWeek: Oct. 8, 2012 Issue" title="InformationWeek: Oct. 8, 2012 Issue" /></a></div> <div class="printfeaturePDFCopy"><strong><a href="http://reports.informationweek.com/abstract/19/9060/Network-Infrastructure/informationweek-october-8-2012.html?k=axxe&cid=article_axxe_os">Download a free PDF of <nobr><em>InformationWeek</em> magazine</nobr></a><br /> (registration required)</strong></div> <div class="clearBoth"></div> </div> </center> <!-- /KINDLE EXCLUDE -->2012-09-21T02:05:00Zhttp://reports.informationweek.com/abstract/83/8870/IT-Business-Strategy/research-innovation-mandate-take-ii.html?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cio2012-09-12T00:01:00ZElectronics manufacturer's quality management software not only flags problems, but cuts costs, fosters collaboration, and improves time to market.http://www.informationweek.com/news/240006817?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioIn the low-margin business of contract manufacturing, the ability to improve product quality while cutting costs is critical. Enter FlexQ, quality management software developed by Flextronics that not only flags product and process anomalies and reduces costly recalls, but also helps the contract manufacturer foster collaboration across interdisciplinary teams, improve customers' time to market, ensure regulatory compliance, and gather information for audits.</p> <P> Flextronics does contract manufacturing in two broad areas: for customers such as Apple, Lenovo, and Microsoft, where the ability to ramp up quickly and produce at scale and low cost is key; and for customers such as Ford, Alcatel, and Huawei, where build-to-order and the ability to make design changes on the fly come more into play. Flextronics partners with customers beginning to end: product design, procurement of parts, manufacturing, shipment to retailers and other channels, warehousing, even warranty work.</p> <P> Its FlexQ software is an outgrowth of FlexFlow, the company's custom-developed ordering and forecasting system, which is "the secret sauce in our industry," says Flextronics CIO Dave Smoley. FlexQ started as the quality module on that system, but FlexFlow is deployed locally, at the factory level, and Flextronics determined that it's critical to share quality information across all of its sites globally, as well as with customers and suppliers.</p> <P> So Flextronics developed FlexQ as a separate, Web-based application that everyone in the supply chain can access. FlexQ executes several quality processes and includes workflows for preventive action, customer complaints, corrective action, and auditing. FlexQ's Device History Record management capabilities are mandated by industries such as medical and automotive to ensure regulatory compliance.</p> <P> Previously, Flextronics managed manufacturing quality site by site, using a hodgepodge of spreadsheets, emails, and other tools. It was difficult to share information and analyze it in a coordinated way, Smoley says. Quality engineers now can access the data from their smartphones and iPads, for example, whereas before the data was available only on local PCs.</p> <P> <!-- Image Aligning Right --> <div class="inlineStoryImage inlineStoryImageRight"> <img src="http://twimgs.com/informationweek/1343/343IW500_BI_flextronics_175.jpg" alt="CIO Smoley (right, with general manager Zahid Hussain) takes a hands-on approach to quality control" title="CIO Smoley (right, with general manager Zahid Hussain) takes a hands-on approach to quality control" class="img175"> <div class="storyImageCaption">CIO Smoley (right, with general manager Zahid Hussain) takes a hands-on approach to quality control</div> </div> <!-- / Image Aligning Right --> <P> With its quality assurance and compliance benefits, FlexQ also provides some peace of mind for highly regulated, safety-conscious customers that might otherwise be leery of outsourcing their manufacturing, Smoley says. For example, FlexQ was instrumental in Flextronics' landing Insulet as a customer for the contract manufacture of insulin pumps, he says. The software's workflow and document management features chronicle each step of the manufacturing process and dictate preventive and corrective actions where necessary. That's not just a health and safety issue for Insulet--it's also a financial one, to avoid stiff fines for noncompliance with FDA regulations.</p> <P> In 2007, Flextronics had six customer product recalls that cost the company more than $6 million, says Manny Nyakako, VP of global quality. Last year, thanks to FlexQ, it had only one customer product recall, costing the company less than $500,000.</p> <P> All in all, there are more than 6,000 users on the system, compared with a few hundred users on the multiple silo systems used previously. And now Flextronics has only one quality system (built on Microsoft .NET and SQL Server) to support and update (about four times a year). FlexQ is run internally, but Smoley says his team will eventually move the Web app into Microsoft's Azure cloud.</p> <P> <center><a href="http://www.informationweek.com/1343"><img src="http://twimgs.com/infoweek/1343/1343_500_return_to_homepage.gif" width="299" height="45" hspace="0" vspace="0" alt="Go to the 2012 InformationWeek 500 homepage" title="Go to the 2012 InformationWeek 500 homepage" border="0"/></a></center></p>2012-09-10T08:30:00ZAs the <em>IW 500</em> Conference kicks off this week, IT leaders rank BYOD and cloud among their biggest challenges. But the smartest CIOs look beyond the negatives.http://www.informationweek.com/news/240006882?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioThere are two types of business technology organizations: those whose main mission is to create and pursue opportunities, and those preoccupied with putting out fires and solving problems. Opportunities are the stuff of growth and success: more revenue, fatter profits, happier customers. Problem solving is more about upkeep and survival: system maintenance, software patches, security plugs. <P> All are critical responsibilities, of course, so it's a question of emphasis. What do you want your business technology organization to be known for: its five 9s of availability and spot-on remediation, or its bold innovations and ability to create shareholder value? Channeling Peter Drucker, <a href="http://online.wsj.com/article/SB10000872396390444914904577621083163383966.html">a <em>Wall Street Journal</em> column</a> recently observed: "When you solve problems, you end up feeding your failures, starving your strengths, and achieving costly mediocrity." Do you see any of your organization in that statement? <P> Prior to our <a href="http://www.informationweek.com/1343"><em>InformationWeek 500</em> Conference,</a> I sent a note to registered attendees, many of them CIOs and all of them IT leaders, asking them to list their top three or four challenges. Their responses were a mix of problems and opportunities. At the risk of sounding like a management consultant, I think many of their problems <em>are</em> opportunities--if CIOs and their lieutenants come at them in a different way. <P> Consider some of the examples from our conference attendees: <P> <strong>BYOD/Mobility:</strong> <P> <em>Problem:</em> How do I get our iPhone-toting employees and my iPad-loving boss off my back? How do I make sure that they're not exposing sensitive company data and communications? <P> <em>Opportunity:</em> How can we make employees more productive--and perhaps cut costs in the process--by letting them use the tools they're most comfortable with? How do we embrace mobile applications to wow customers and make more money for our company? <P> <strong>Cloud Services:</strong> <P> <em>Problem:</em> How do we stop other departments from buying and implementing software, storage, compute, and other cloud services without the IT organization's expert input and assistance? <P> <em>Opportunity:</em> Where in our company might cloud services trump conventional software or systems, for reasons of functionality, cost, usability, ease of upgrades, and/or speed to market? How do we partner with other business departments to evaluate cloud services? <P> <strong>Social Media:</strong> <P> <em>Problem:</em> How do I keep our employees from running amok on Twitter, Facebook, and other public and private sites? How do we react to and manage negative comments about our company? <P> <em>Opportunity:</em> How can our company listen in on social media conversations to better serve customers and attract potential customers? <P> <strong>Big Data:</strong> <P> <em>Problem:</em> How do we tame (or slow) the growth and duplication of data at our company? <P> <em>Opportunity:</em> How do we turn our mountains of data into actionable insight, in order to make more-informed decisions in real time as well as anticipate customer and partner needs? <P> <strong>Security:</strong> <P> <em>Problem:</em> How do we lock down our systems to lower the risk of attack and data leakage? <P> <em>Opportunity:</em> How do we protect our most important information assets without making it difficult for employees to do their jobs and for customers to do business with us? How do we build an internal culture of information security awareness? How do we build a reputation for handling customer data with the utmost care and sensitivity? <P> <strong>Innovation:</strong> <P> <em>Problem:</em> How do we squeeze our IT operations budget and carve out the time to do more innovative work with fewer resources? <P> <em>Opportunity:</em> How do we align the hearts and minds of our IT pros with the mission of our business and the needs and aspirations of our customers? How do we go on the offensive--in the words of <a href="http://www.informationweek.com/global-cio/interviews/iw-500-data-shows-how-it-rules-have-chan/240006825">our magazine cover story,</a> become innovators and rule breakers--rather than react and defend? <P> <center><a href="http://www.informationweek.com/1343"><img src="http://twimgs.com/infoweek/1343/1343_500_return_to_homepage.gif" width="299" height="45" hspace="0" vspace="0" alt="Go to the 2012 InformationWeek 500 homepage" title="Go to the 2012 InformationWeek 500 homepage" border="0"/></a></center></p>2012-08-08T08:00:00ZUnion Pacific is spending hundreds of millions on IT each year for the federal plan aimed at making train accidents less likely. http://www.informationweek.com/news/240004933?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioImagine having a $300 million annual IT budget, about 1.5% of company revenue, and then being told by Congress that you need to spend an additional $350 million to $400 million a year on an IT project that will yield minimal business benefits and for which there are minimal federal subsidies.</p> <P> That's the situation Union Pacific finds itself in with its version of Positive Train Control, a set of interoperable systems under development industry-wide aimed at preventing train-to-train collisions, over-speed derailments, and injuries to rail-side workers. PTC systems are designed to keep a train within authorized limits on a track. When necessary, the technology will override the engineer or operator to slow down or stop a train. "It self-enforces safety," says Michael Newcomb, the IT director who oversees UP's work on PTC.</p> <P> A train crash in California in 2008 in which 25 people died led to the Rail Safety Improvement Act, which mandates that all major U.S. railroads implement a PTC system by Dec. 31, 2015. Currently, 11 PTC projects, involving nine railroads in at least 16 states, are in varying stages of development and implementation, according to the Federal Railroad Administration, which estimates that the systems will cover about 70,000 miles of track when the program is completed. A consortium led by UP, CSX Transportation, Norfolk Southern Railway, and BNSF Railway is leading the interoperability effort.</p> <P> PTC is a huge undertaking, one that UP CIO Lynden Tennison equates to a massive "science project" requiring each railroad company to overhaul its communications, back-office, "wayside" switching and signaling, and on-board train infrastructures. Newcomb says the system will have to pass 10,000 test cases before it can go fully operational at UP. Already, there's widespread talk in the industry of the need to extend the deadline beyond 2015.</p> <P> Tennison estimates that when all is said and done, the industry will have spent about $20 billion and UP itself more than $2 billion on PTC. Originally, it was thought that the program would let the railroad companies eliminate one of the two engineers on board each of their trains, yielding substantial cost savings over time, but union pressures scuttled those plans, Tennison says. So UP is looking for other ways to monetize its PTC work.</p> <P> For example, that work is giving UP crews improved real-time feedback if they're violating train handling rules, it's helping with remote management of track wayside equipment, and it's improving communications security for national critical infrastructure. </p> <P> A more tangible outcome of UP's PTC work is a system that alerts on-board engineers to optimal throttling and braking procedures given track, traffic, and other conditions, helping the company cut fuel costs by 4% to 6%. Deeper savings are possible, as UP studies show that its best engineers use two-thirds the fuel of its worst engineers. (UP now publishes the fuel metrics of its train engineers, rewarding the top tier with $75 gas cards while having serious chats with the underperformers.)</p> <P> The fuel savings are noteworthy, Tennison says, "but you don't need $100,000 worth of hardware on the locomotive to do that. We could've done it for a much, much lower price." </p> <P> <!-- KINDLE EXCLUDE --> <center> <div id="printfeaturePDFpromo"><div class="printfeaturePDFCover"><a href="http://reports.informationweek.com/abstract/81/8997/Business-Intelligence-and-Information-Management/informationweek-august-13-2012.html?k=axxe&cid=article_axxe_os"><img src="http://twimgs.com/infoweek/1340/cov_110w.jpg" alt="InformationWeek: August 13, 2012 Issue" title="InformationWeek: August 13, 2012 Issue" /></a></div> <div class="printfeaturePDFCopy"><strong><a href="http://reports.informationweek.com/abstract/81/8997/Business-Intelligence-and-Information-Management/informationweek-august-13-2012.html?k=axxe&cid=article_axxe_o">Download a free PDF of <nobr><em>InformationWeek</em> magazine</nobr></a><br /> (registration required)</strong></div> <div class="clearBoth"></div> </div> </center> <!-- /KINDLE EXCLUDE -->2012-08-08T08:00:00ZUnion Pacific has to put a lot of energy into internships and recruiting to lure its IT talent.http://www.informationweek.com/news/240004931?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioWhen Union Pacific IT recruiters attend job fairs on college campuses nationwide, they typically look on enviously as long lines queue at the booths of Google, Microsoft, Oracle, and other tony tech employers. Union Pacific CIO Lynden Tennison realizes he has a big challenge on his hands to convince students that a 150-year-old railroad freight hauler based in Omaha, Neb., is an attractive alternative. But he has a plan.</p> <P> Tennison figures that if he can get students to spend a few months interning at UP headquarters, he can hook them. The company's IT organization recruits at the likes of Purdue, Michigan State, Georgia Tech, Texas, even MIT, as well as locally at Nebraska and Iowa State. Only 10% of the college students it makes job offers to accept, he says, but that rate jumps to 70% to 75% among students who have interned at headquarters.</p> <P> The IT organization's 40 summer interns and 70 year-round interns are paid between $15 and $24 an hour; those from outside the Omaha area get housing, a meal plan, transportation, and relocation assistance. It also has seven high school interns doing system and training documentation, performing data validation, and creating scripts to migrate data during system upgrades. "We try to push on all sides as much as we can to grow the pool," Tennison says. </p> <P> What does UP have to offer more seasoned IT pros? Tennison runs through a few attributes:</p> <P> &gt;&gt; UP is doing leading-edge work--in real-time and predictive analytics, hardware engineering, sensor-based mote technology, train communications, and other areas. It develops and builds much of its own IT (see <a href="http://www.informationweek.com/news/global-cio/interviews/240004932">Why Union Pacific Builds Its Own Tech</a>). </p> <P> To promote a culture of IT innovation, Tennison three years ago initiated a website where anyone in the IT organization can post and comment on an IT-related idea anonymously. If 80% of voters give the idea a thumbs up, the person who proposed it gets $3,000 and up to 80 hours of work time to whip it into a prototype. If the idea is then deemed worthy of additional investment or deeper analysis, a formal plan is drawn up. Tennison estimates that UP has realized $10 million in benefits from the program, mostly from one idea on how to minimize false positives generated by rail wayside tracking systems, which were needlessly stopping trains. </p> <P> &gt;&gt; Omaha, where most of the company's IT employees work, isn't the most hopping place for a college grad, but it has a lot to offer. It ranked eighth on the 2011 Best Cities for Families list of Parenting magazine, which gave the city of 400,000 people (more than 800,000 in the metro area) props for its strong schools, "thriving job market," and "vibrant jazz presence." Along with short commutes, it has a small downtown area, supports a performing arts center, is home to three minor league sports teams, hosts the College World Series every June, and attracts a number of name entertainment acts.</p> <P> &gt;&gt; There's employment stability at UP. Average length of service is 12 years. Attrition rates run in the 5% to 6% range, with a significant portion from retirements.</p> <P> In all, the UP IT organization consists of about 2,000 people, 600 of them contractors (450 offshore, mostly in India, and 150 onshore). Of its 1,400 or so full-time employees, 400 are in telecom; 200 are in what Tennison calls "system engineering" (database management, middleware, operating systems, system programming, data warehousing); 180 to 200 are in data center operations; and most of the rest are in application development. Then there are the 50 or so computer, electrical, and mechanical engineers in the company's hardware R&amp;D lab, who design and build everything from locomotive radios to railcar monitoring systems (see <a href="http://www.informationweek.com/news/global-cio/interviews/240004933">Congress' $20 Billion Tech Mandate: Make Trains Safer</a>).</p> <P> Tennison says he has never laid off an IT employee in seven years as CIO, even as he moved work offshore. His organization hired 137 people in 2011 and 70 people so far this year. It has 10 open positions, for systems architects, developers (Java, C++), and operations support (help desk, LAN, network ops). </p> <P> To get access to programmers, Tennison had been bringing workers on H-1B visas to Omaha, but he found that going offshore for such work was cheaper and easier. He thinks UP's current mix of onshore/offshore IT pros is just about right, acknowledging that "you lose efficiency" with offshore contractors. "It's worked pretty effectively," he says. "I will not say it's worked without pain." </p> <P> <!-- KINDLE EXCLUDE --> <!-- RECOMMENDED READING --> <a name="recommended"></a> <center> <div id="recommendedReadingPromo"> <div class="recommendedReadingPromoHeader"><strong>More In This Series:</strong></div> <ul class="normalUL"> <li><a href="http://www.informationweek.com/news/global-cio/interviews/240004930">Union Pacific Delivers Internet Of Things Reality Check</a></li> <li><a href="http://www.informationweek.com/news/global-cio/interviews/240004932">Why Union Pacific Builds Its Own Tech</a></li> <li class="last-li"><a href="http://www.informationweek.com/news/global-cio/interviews/240004933">Congress' $20 Billion Tech Mandate: Make Trains Safer</a></li> </ul> </div> </center><br clear="all"> <!-- / RECOMMENDED READING --> <!-- /KINDLE EXCLUDE --> <P> <!-- KINDLE EXCLUDE --> <center> <div id="printfeaturePDFpromo"><div class="printfeaturePDFCover"><a href="http://reports.informationweek.com/abstract/81/8997/Business-Intelligence-and-Information-Management/informationweek-august-13-2012.html?k=axxe&cid=article_axxe_os"><img src="http://twimgs.com/infoweek/1340/cov_110w.jpg" alt="InformationWeek: August 13, 2012 Issue" title="InformationWeek: August 13, 2012 Issue" /></a></div> <div class="printfeaturePDFCopy"><strong><a href="http://reports.informationweek.com/abstract/81/8997/Business-Intelligence-and-Information-Management/informationweek-august-13-2012.html?k=axxe&cid=article_axxe_o">Download a free PDF of <nobr><em>InformationWeek</em> magazine</nobr></a><br /> (registration required)</strong></div> <div class="clearBoth"></div> </div> </center> <!-- /KINDLE EXCLUDE -->2012-08-08T08:00:00ZThe railroad often finds off-the-shelf software and hardware is too expensive and isn't tuned to its needs.http://www.informationweek.com/news/240004932?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioIn an era when most IT organizations look to buy off-the-shelf software, avoid doing custom coding, and allow the use of more mass-market consumer technology than they ever thought possible, Union Pacific CIO Lynden Tennison is an unapologetic believer in building rather than always buying the hardware, software, and systems that underpin its $20 billion railroad shipping business. And while it's at it, UP generates $35 million to $40 million in revenue a year selling or licensing some of those technology innovations to other companies, including rivals, creating a small profit center within its $300 million-a-year IT cost center. </p> <P> UP, the nation's largest railroad company, operating west of Chicago and New Orleans, develops and builds much of its own IT partly out of necessity. The railroad shipping industry's specialized and often complex technology needs don't add up to a lucrative enough market to attract the major tech vendors. And the boutique vendors that try to fill those specialized needs are often one bad quarter away from bankruptcy, Tennison says, or they charge exorbitant prices because they're not producing at large scale and lack adequate competition. So UP is always looking for in-house IT alternatives. </p> <P> While Tennison jokes that UP isn't likely to get into the general ledger software business anytime soon, it did develop its own supply chain applications, as the likes of SAP and Oracle couldn't meet its stringent performance requirements (it will tolerate only 1.5 hours of downtime a month for system upgrades and changes). UP even develops its own firewalls; develops its own service-oriented architecture; builds its own locomotive radios, networking consoles, and antenna farms; owns its own radio spectrum and trackside optical fiber (34,000 miles of it); and builds its own microwave towers (700 of them). </p> <P> More ambitiously, UP acquired a small Michigan-based gaming outfit several years ago to develop virtual reality programs--complete with avatars and precise 3-D renderings of actual rail yards and trains--for internal training of RCOs (remote control operators), conductors, car inspectors, and other personnel. The company is now looking to sell that software to other railroad companies, as well as to construction, mining, and energy companies, under its PS Technology unit. </p> <P> The mother of all UP IT projects is NetControl, a Linux-based transportation management system to replace the mainframe-based system the company rolled out in the late 1960s. About 270 people worldwide are working on NetControl, which Tennison calls "our family jewels." The $200 million system, which is rolled out in increments, is about halfway done and due to be fully operational in 2017.</p> <P> UP's current transportation management system is used mostly for taking customer orders, scheduling train operations, tracking what's going on in train cars, and monitoring railroad traffic. It's being updated to a Web platform, letting customers access it from mobile devices, place more accurate orders, and see the planned travel itinerary for their shipments. With NetControl, UC will be able to monitor terminal and network use over time and forecast imbalances in the supply and demand of crews or locomotive power. Automated action- or alert-driven workflows can recommend optimal solutions.</p> <P> One internal benefit of moving to NetControl is that more technical expertise is available to support a Web versus a mainframe system, Tennison says. UP is also looking to sell NetControl to other railroad companies.</p> <P> Tennison, the company's CIO since 2005, made his vendor bones running a for-profit UP service management application subsidiary called Nexterna from 1998 through 2001. Still, he says he sometimes wonders "whether we're dinosaurs" doing all of this custom work. "I second-guess myself a lot," he concedes, "but it doesn't feel like we're making bad decisions." </p> <P> <!-- KINDLE EXCLUDE --> <!-- RECOMMENDED READING --> <a name="recommended"></a> <center> <div id="recommendedReadingPromo"> <div class="recommendedReadingPromoHeader"><strong>More In This Series:</strong></div> <ul class="normalUL"> <li><a href="http://www.informationweek.com/news/global-cio/interviews/240004930">Union Pacific Delivers Internet Of Things Reality Check</a></li> <li><a href="http://www.informationweek.com/news/global-cio/interviews/240004931">Tech Hotshot, Want To Work At A Railroad?</a></li> <li class="last-li"><a href="http://www.informationweek.com/news/global-cio/interviews/240004933">Congress' $20 Billion Tech Mandate: Make Trains Safer</a></li> </ul> </div> </center><br clear="all"> <!-- / RECOMMENDED READING --> <!-- /KINDLE EXCLUDE --> <P> <!-- KINDLE EXCLUDE --> <center> <div id="printfeaturePDFpromo"><div class="printfeaturePDFCover"><a href="http://reports.informationweek.com/abstract/81/8997/Business-Intelligence-and-Information-Management/informationweek-august-13-2012.html?k=axxe&cid=article_axxe_os"><img src="http://twimgs.com/infoweek/1340/cov_110w.jpg" alt="InformationWeek: August 13, 2012 Issue" title="InformationWeek: August 13, 2012 Issue" /></a></div> <div class="printfeaturePDFCopy"><strong><a href="http://reports.informationweek.com/abstract/81/8997/Business-Intelligence-and-Information-Management/informationweek-august-13-2012.html?k=axxe&cid=article_axxe_o">Download a free PDF of <nobr><em>InformationWeek</em> magazine</nobr></a><br /> (registration required)</strong></div> <div class="clearBoth"></div> </div> </center> <!-- /KINDLE EXCLUDE -->2012-08-03T08:30:00ZOutsourcing remains pervasive in both the public and private sectors, and it's not going away, despite the widespread backlash.http://www.informationweek.com/news/240004847?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioOutsourcing is the polarizing IT management issue of our time. Few if any IT practices are so widely embraced at the highest corporate levels, yet so widely derided by the rank and file, especially when the work that's outsourced is moved offshore. <P> On the message boards, outsourcing is blamed for everything from Dreamliner delays at Boeing to the second-quarter loss at Microsoft (despite the fact that a one-time, $6.2 billion financial write-down was the real cause). Outsourcing providers and customers are portrayed as miscreants and dolts. <P> One critic, commenting on an <em>InformationWeek</em> column Allstate CIO Jim Ditmore wrote about his <a href="http://www.informationweek.com/news/global-cio/interviews/240003659">negative experiences with outsourcing</a> earlier in his career, surmised: "Would it be correct for me to guess that a non-technical CIO and other ignorant CXOs made the decision to outsource? Were the screams of protest by knowledgeable 'IT people' (a.k.a. the drones) ignored because they were supposedly interested only in saving their own jobs? Can the sales process for the outsourcing deal be described as 'people who don't know what they're selling telling lies to people who don't know what they're buying?'" <P> Outsourcing's also a political livewire. Even though the federal government outsources much of its work, IT and otherwise, to all manner of contractors, consultants, integrators, and other vendors--and some of that work makes its way offshore--the Obama administration talks about outsourcing as if it were worthy of an Un-American Activities investigation. The Romney campaign can't backpedal fast enough from any suggestion that the former executive engaged in the practice when he was governor of Massachusetts and CEO of Bain. Likewise, many executives still keep their companies' large outsourcing contracts close to the vest, for fear of a public relations backlash. I've talked with plenty of CIOs who rave in private about their offshore vendors--but take the Fifth in public. <P> <strong>[ Learn why <a href="http://www.informationweek.com/news/global-cio/outsourcing/240002894?itc=edit_in_body_cross">Obama's Attack On Outsourcing Rings Hypocritical</a>. ]</strong> <P> The fact of the matter is, outsourcing remains pervasive in both the public and private sectors, and it's not going away, despite the social and political blowback. For example, 82% of the 564 business technology professionals who responded to our recent 2012 State Of IT Outsourcing survey said their companies use such services, up slightly from 81% a year ago. Among those that outsource, more than half (59%) use offshore providers to some degree. And 31% said the composition of their IT workforces will shift more toward outsourcers in the next year, while only 15% said it will shift away (54% said the mix will remain about the same). My colleague Paul McDougall will dive deeper into those survey results, including the perspectives of customers, suppliers, and other industry players, in an upcoming <em>InformationWeek</em> feature story. <P> <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> There are exceptions to the trend, of course. New General Motors CIO Randy Mott made national headlines last month after <em>InformationWeek</em> reported that he plans to <a href="http://www.informationweek.com/news/global-cio/interviews/240002892">reverse the automaker's historical reliance on IT outsourcing</a>--from a mix of 90% outsourced and 10% in-house staff to 10% outsourced and 90% in-house&#8212;in an attempt to execute projects faster and cultivate auto technology expertise internally. GM's plan to hire thousands of people for four new software development centers in the United States, rather than locate one or two of them abroad (like in China, its fastest-growing market), probably is based in some measure on the fact that the company owes its existence to the $50 billion bailout funded by American taxpayers. <P> Allstate's Ditmore warns CIOs about handing off their critical intellectual property, much of it IT-related, to outsourcers. And don't count on IT outsourcers to cut costs, he said. "While most small and midsized companies don't have the scale to achieve cost parity with a large outsourcer," Ditmore says, "nearly all large companies and many midsized ones do have that scale." He argues for doing only small outsourcing deals, for which it's easier to establish SLAs and measure performance. <P> If so many leaders are so leery of outsourcing, why do so many organizations continue to do it? Because when these contracts and relationships are properly thought out, vetted, and managed, they can deliver strong results--especially when they're tied to strategic business outcomes and not just brute cost savings. Outsourcers can bring hard-to-find expertise and fresh ways of thinking to some of the most pressing business technology challenges. <P> Outsourcing isn't a panacea for dysfunctional IT operations and management. But it's not the devil some of its detractors make it out to be.2012-07-09T08:00:00ZThe CIO's road through Wal-Mart, Dell, and HP was marked by very different cultures and expectations.http://www.informationweek.com/news/240002893?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cio<img src="http://twimgs.com/informationweek/1338/338cover_3_110.jpg" width="110" height="110" align="right" hspace="5">Randy Mott doesn't think small. As CIO of four of the largest U.S. companies during his career of more than 30 years, he has tended to go "all in" on IT measures, whether they're data center consolidations or workforce overhauls.</p> <P> But three of those market-leading companies--Wal-Mart, Hewlett-Packard, and now General Motors--couldn't be more different. At least Mott caught them at very different stages in their evolution.</p> <P> Mott's 22 years at Wal-Mart, where he was CIO from 1994 to 2000, were marked by tremendous growth, as it shot past $100 billion in revenue to become one of the largest corporations on the planet. During those years, as it emerged from the larger-than-life shadow of founder Sam Walton, Wal-Mart was a pioneer in analyzing big data (before the term existed) to optimize its global supply chain and ultimately deliver all manner of products to customers at "everyday low prices."</p> <P> They were Wal-Mart's glory years, before the lawyers and interest groups and politicians started sinking their teeth into the country's largest employer, and before Target, Costco, Amazon, and other rivals cut in with their own supply chain and business model innovations. It was at Wal-Mart that Mott learned the virtues of delivering IT projects quickly ("speed merchant," InformationWeek called him in a 1996 magazine cover story), and always on a tight budget. It was also where Mott learned to measure everything and to act like a "retailer first, technologist second," a primal business focus he retains to this day.</p> <P> Mott's HP years, from 2005 to 2011 (following five years at rival Dell), were marked by massive cost cutting and consolidation, as CEO Mark Hurd tapped him to reduce the company's IT spending from 4% of revenue to 2%. Under the Mott-led IT "transformation" at HP (which he took on the road to show off the HP dog food the IT organization was eating), the company modernized and consolidated data centers and applications, moved toward a single enterprise data warehouse, shifted work from IT outsourcers and other contractors to employees, and directed those employees to spend more of their time on new development and less on support and maintenance. Financially rigorous cost-benefit analyses of every IT project, big and small, were the mandate.</p> <P> Those all-in moves weren't always popular with the rank and file. Unlike Wal-Mart during the Mott years, HP was already a mature company with an HP-Way-or-the-highway culture. It had become the largest IT vendor in the world, largely through acquisitions, but its biggest products and fattest profit margins were under siege. After the HP board ousted Hurd in 2010 for what amounted to technicalities and bad judgment, Mott didn't last much longer under Hurd's replacement, L&eacuteo Apotheker, who months later was replaced by Meg Whitman.</p> <P> HP's day of reckoning is still to come. Even after the company said in May that it will cut 27,000 jobs--8% of its workforce--over the next couple of years amid slumping profits, there's still a sense that things will get worse at HP before they get better.</p> <P> Out of the frying pan, into the pressure cooker, Mott began his career at GM 20 weeks ago. A historic bankruptcy filing, controversial government bailout, and several years of austerity measures should have knocked most of the arrogance and complacency out of the company's 200,000 employees.</p> <P> In many respects, GM's a better venue than HP was for Mott to apply his IT transformation/consolidation/measurement playbook. Unlike HP, GM isn't looking to slash IT costs in the process, and by reversing the company's overwhelming reliance on outsourcers, Mott will need to hire thousands of people as it brings software development and other skills in-house.</p> <P> The way Mott sees it, he's joining a "$150 billion startup," fresh from an IPO (the U.S. Treasury Department still owns 26% of GM) and an executive management overhaul (GM is on its third CEO in 2-1/2 years). Asked why he'd join a company in GM's straits, in an industry where he has no experience, Mott said there are only a handful of multinational companies out there "with an appetite to really change," and he's getting a charge out of learning the IT challenges that come with global auto platforms, just-in-time delivery, and CAFE standards. </p> <P> Mott knows those challenges are daunting: "You come in and you have a choice to make that says: Does that company deserve the best IT it can get? And with that come hard choices. And they aren't hard choices I necessarily like to make any more than the next human being." </p> <P> <center>Go to the main story:<br> <b><a href="http://www.informationweek.com/news/global-cio/interviews/240002892">General Motors Will Slash Outsourcing In IT Overhaul</a></b></center></p> <P> <!-- KINDLE EXCLUDE --> <center> <div id="printfeaturePDFpromo"><div class="printfeaturePDFCover"><a href="http://reports.informationweek.com/abstract/83/8883/IT-Business-Strategy/informationweek-july-9-2012.html?k=axxe&cid=article_axxe_os"><img src="http://twimgs.com/infoweek/1338/cov_110w.jpg" alt="InformationWeek: July 9, 2012 Issue" title="InformationWeek: July 9, 2012 Issue" /></a></div> <div class="printfeaturePDFCopy"><strong><a href="http://reports.informationweek.com/abstract/83/8883/IT-Business-Strategy/informationweek-july-9-2012.html?k=axxe&cid=article_axxe_os">Download a free PDF of <nobr><em>InformationWeek</em> magazine</nobr></a><br /> (registration required)</strong></div> <div class="clearBoth"></div> </div> </center> <!-- /KINDLE EXCLUDE --> <P>2012-07-09T08:00:00ZBut worries continue about offshoring of tech jobs and innovation, state of STEM education.http://www.informationweek.com/news/240002852?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioTwo years ago, under the moniker <a href="http://www.informationweek.com/news/specialreport/innovation-mandate" target="_blank">Innovation Mandate</a>, <i>InformationWeek</i> fielded a survey and conducted scores of interviews to gauge whether U.S. IT pros and the industry at large think this country is declining as a global technology leader--and if so, what we can do about it. When asked to describe where the U.S. stands in the global IT industry, 63% of the 624 business technology pros who responded to that 2010 survey characterized the U.S. as "a strong player, but losing its lead on a global scale," while 5% saw the U.S. as "a former leader whose best days are behind it." Only 32% of respondents still saw the U.S. IT industry as "a global leader positioned to grow its influence."</p> <P> How have views changed in two years? We fielded an updated survey in April (download our full, updated <a href="http://reports.informationweek.com/abstract/83/8870/IT-Business-Strategy/research-innovation-mandate-take-ii.html?cid=pub_analyt__iwk_20120709" target="_blank">Innovation Mandate report</a>), and the results are in: IT pros are slightly more optimistic about the state of U.S. technology leadership, though their opinions about the most pressing priorities and competitive threats, as well as which IT vendors and nations are taking the mantle of leadership and which are falling behind, have shifted a bit in two years.</p> <P> Responding to our latest survey were 552 business technology pros at a range of U.S. companies, educational institutions, and government organizations. The same percentage as in 2010--63%--think the U.S. is a strong IT player but losing its global lead. The percentage who are more optimistic--who think it's a global leader positioned to grow its influence--rose slightly, to 34% from 32%. Only 3% of respondents think the U.S. is a former IT leader, compared with 5% two years ago.</p> <P> <strong>What, Me Worry?</strong></p> <P> As for the main factors preventing the U.S. from growing as a global IT leader, the results of the recent survey are pretty consistent with those from 2010. Still topping the list of concerns is "shortsighted decisions that are shipping tech jobs and ultimately innovation abroad," selected as one of the most important three factors by 67% of the 362 survey respondents who think the U.S. is a former technology leader or is losing its lead, compared with 66% two years ago. Likewise, the No. 2 and No. 3 factors thought to be limiting U.S. technology leadership are the same in the 2012 survey as in 2010: "failure of the educational system to produce workers who excel in STEM" and "lack of leadership at the federal policy-making level" (see chart below).</p> <P> The biggest shifts since 2010 have to do with intellectual property and perceptions about U.S. IT worker productivity and ambition. In the 2010 survey, only 18% of respondents cited "failure to protect intellectual property developed in the U.S." as one of the top three factors holding back the U.S. IT industry. But that percentage jumped to 28% this year, as more technology R&amp;D and design work gets farmed out to companies in other countries, or as news surfaces that foreign companies and governments are trying to steal that U.S. IP. Meantime, 21% of the IT pros we surveyed in 2010 worried about "a corporate culture where tech workers no longer are 'hungry' enough to out-innovate counterparts based abroad," but only 15% see that as a top concern today.</p> <P> Responses to our question about what the U.S. government's role should be in supporting IT innovation show attitudes shifting subtly away from such reliance. (Multiple responses were allowed.) About the same percentage of respondents to our 2012 and 2010 surveys think the government's role should be to support basic and applied research at the university level (59% vs. 60%) and federal level (58% in both surveys). But the percentage of respondents who want the government to provide R&amp;D tax credits to private industry declined, to 54% from 63%. Also declining is the percentage of respondents who want the government to fund big technology programs such as broadband, smart grid, and electronic medical records (38% in 2012 versus 45% in 2010). Where IT pros want more government involvement (or, more accurately, don't want less) is in regulation: 51% of respondents called for less IT regulation two years ago compared with 46% this year.</p> <P> <center><div style="font-size:.8em;"><img src="http://twimgs.com/informationweek/1338/338Rob_chart1.jpg" width="559" height="603" alt="Limits on leadership: What are the main factors preventing the U.S. from growing as a global IT leader?" hspace="0" vspace="0" border="0" style="margin-bottom:7px;" /></div></center></p> <P> <!-- KINDLE EXCLUDE --> <center> <div id="inlineReportPromo"> <div class="inlineReportPromo_headline"><a href="http://reports.informationweek.com/abstract/83/8870/IT-Business-Strategy/research-innovation-mandate-take-ii.html?cid=pub_analyt__iwk_20120709" target="_blank" style="color:#ffffff;">Innovation Mandate: Take II</a></div> <div class="inlineReportPromo_inner"> <center><strong>Slight Uptick in Optimism</strong></center><br /> <img src="http://twimgs.com/informationweek/1338/338Rob_reportcover.jpg" width="175" height="111" style="float:right;"><br /> Our <a href="http://reports.informationweek.com/abstract/83/8870/IT-Business-Strategy/research-innovation-mandate-take-ii.html?cid=pub_analyt__iwk_20120709" target="_blank">Innovation Mandate report,</a> packed with 20 charts, is free with registration.<br /><br /> <center><strong><a href="http://reports.informationweek.com/abstract/83/8870/IT-Business-Strategy/research-innovation-mandate-take-ii.html?cid=pub_analyt__iwk_20120709" target="_blank">Get This</a> And <a href="http://reports.informationweek.com/">All Our Reports</a></strong></center><br /><br /> </div> </div> </center></p><br clear="all"> <!-- /KINDLE EXCLUDE --> <P><strong>Tech Vendors Rise And Fall</strong></p> <P> When it comes to assessing the leading IT vendors, our survey shows some significant shifts between 2010 and 2012. Among those vendors on the steepest decline in the eyes of the IT pros we surveyed are Research In Motion, Hewlett-Packard, Nokia, even SAP. On the steepest ascent are Apple and Samsung.</p> <P> In our question about which U.S.-based IT companies would be insignificant or marginal players in five years, HP, on its third CEO in two years, slid the most since 2010--31% of the IT pros we surveyed now think it's on such a decline, compared with 15% two years ago. Looking at non-U.S. tech vendors through a different lens, we asked which of 15 or so companies based outside this country are either No. 1 or No. 2 in their sectors globally. Dropping the most since 2010 is RIM, considered a leader in its sector by a healthy 46% of survey respondents in 2010 but, with the rise of the iPhone and Android devices, is considered a leader in its sector by only 7% of respondents this year. Nokia was considered a sector leader by 38% of survey respondents in 2010 but by only 24% in 2012. SAP was considered a leader by 49% of respondents in 2010 but by only 35% in 2012. </p> <P> Not surprisingly, Apple is soaring in the eyes of survey respondents. When we asked two years ago which five U.S.-based tech companies are comparable to Detroit's Big Three automakers, only 41% of respondents picked Apple among them--it came in sixth on our list after Microsoft, Google, IBM, Cisco, and Intel. In this year's survey, 73% of respondents put Apple in their top five--second on the list after Microsoft. (HP, by the way, was cited among the big five by 34% of respondents in 2010 but only 18% in 2012.)</p> <P> Among non-U.S. IT vendors, Samsung's stature rose the most since 2010. Only 39% of respondents considered Samsung No. 1 or No. 2 in its sectors in 2010, but 61% designated it as a sector leader this year, as it gains market share in smartphones and provides a compelling iPad alternative in tablets.</p> <P> IT pros' attitudes about the two countries that provide the biggest IT threats to the U.S. have flip-flopped in two years. In 2010, 44% of survey respondents cited India as the biggest threat to U.S. technology leadership, but only 33% cite India this year. In contrast, 42% of respondents cited China as the biggest threat to U.S. technology leadership in 2010, but that percentage shot up to 54% this year, as China took on more and more IT R&amp;D work, some of its major IT vendors (Lenovo, Huawei) grabbed a higher international profile, and Chinese interests were accused of trying to steal IT intellectual property from U.S. and other vendors.</p> <P> <strong>What Others Are Saying</strong></p> <P> Beyond <i>InformationWeek</i>'s research on IT-based innovation, several organizations recently issued their own reports on the subject, offering mixed conclusions.</p> <P> A <a href="http://www.commerce.gov/sites/default/files/documents/2012/january/competes_010511_0.pdf" target="_blank">160-page report released by the U.S. Commerce Department</a> in January argued that the U.S. is slipping when it comes to innovation. It made the case for aggressive federal government investments in basic and applied research, STEM education, regional entrepreneurial "clusters," and other areas in order to raise the U.S. standing.</p> <P> The <a href="http://www3.weforum.org/docs/WEF_GCR_Report_2011-12.pdf" target="_blank">2011-2012 Global Competitiveness Report</a> by the World Economic Forum ranked the U.S. fifth among 142 countries, the third year in a row the U.S. ranking fell (it was fourth last year). The forum's analysis goes beyond science and technology competitiveness, factoring in broader educational, labor, legal, market, and other factors. Outranking the U.S. were Switzerland, Singapore, Sweden, and Finland. Another report from the forum released earlier this year ranks the U.S. eighth among 142 countries in what it calls network readiness: broadly, its ability to leverage its broadband infrastructure for competitive advantage. </p> <P> A report released in March by the Information Technology and Innovation Foundation and the Ewing Marion Kauffman Foundation ranked the innovation policies of 55 countries across seven core areas: trade and foreign direct investment; science and R&amp;D; domestic market competition; intellectual property rights; information technology; government procurement; and high-skill immigration. Their <a href="http://www.kauffman.org/uploadedfiles/global-innovation-policy-index-2012.pdf" target=_"blank">Global Innovation Policy Index</a> ranks each country as upper tier, upper midtier, lower midtier, or lower tier on each of the seven policy areas. Only Canada and Singapore placed in the upper tier for all seven indicators, while the U.S. placed in the top tier for every one except openness to high-skill immigration.</p> <P> While most IT pros agree that the U.S. needs to take steps to improve or maintain its standing as the leading global IT-based innovator, there's no consensus on how much the government needs to get involved. The authors of the ITIF-Kauffman report were careful to distinguish between government-orchestrated "industrial policies" that favor certain companies and technologies, and what they see as more productive policies that "support" industry players. But that's a slippery slope. </P> <P> <center><div style="font-size:.8em;"><img src="http://twimgs.com/informationweek/1338/338Rob_chart2.jpg" width="590" height="504" alt="In which IT areas do you see the U.S. holding a distinct global lead?" hspace="0" vspace="0" border="0" style="margin-bottom:7px;" /></div></center></p> <P> <center><div style="font-size:.8em;"><img src="http://twimgs.com/informationweek/1338/338Rob_chart3.jpg" width="590" height="504" alt="In which IT areas do you see the U.S. behind other countries" hspace="0" vspace="0" border="0" style="margin-bottom:7px;" /></div></center></p> <P> <!-- KINDLE EXCLUDE --> <center> <div id="printfeaturePDFpromo"><div class="printfeaturePDFCover"><a href="http://reports.informationweek.com/abstract/83/8883/IT-Business-Strategy/informationweek-july-9-2012.html?k=axxe&cid=article_axxe_os"><img src="http://twimgs.com/infoweek/1338/cov_110w.jpg" alt="InformationWeek: July 9, 2012 Issue" title="InformationWeek: July 9, 2012 Issue" /></a></div> <div class="printfeaturePDFCopy"><strong><a href="http://reports.informationweek.com/abstract/83/8883/IT-Business-Strategy/informationweek-july-9-2012.html?k=axxe&cid=article_axxe_os">Download a free PDF of <nobr><em>InformationWeek</em> magazine</nobr></a><br /> (registration required)</strong></div> <div class="clearBoth"></div> </div> </center> <!-- /KINDLE EXCLUDE --> <P>2012-06-13T13:40:00ZA lot. Consider the track records of some of the most acquisitive IT vendors over the past few years: Salesforce.com, Oracle, IBM, SAP, Dell, and HP.http://www.informationweek.com/news/240002003?cid=SBX_iwk_related_commentary_Executive_insights/interviews_global_cioOne of the best measures of an IT vendor's state of mind and overall competency is its M&A activity. Is it among the last vendors into an emerging market with an acquisition, overpaying for a second-tier player? Do its acquisitions add up to something larger than the sum of their parts? Are its biggest acquisitions bold, even unconventional moves, or are they obvious ploys to buy revenue, market share, and new customers? <P> Consider a handful of the most acquisitive IT vendors over the last few years: Salesforce.com, Oracle, IBM, SAP, Dell, and Hewlett-Packard. What do the companies they're buying, and the point at which they're buying them, say about their ability to execute on a long-term strategy? A lot. <P> <strong>Salesforce.com</strong>. It's by far the smallest and most focused of the vendors in this cluster, and it's also the fastest growing, on track to <a href="http://www.informationweek.com/news/software/enterprise_apps/240000645">increase revenue 32% this year to about $3 billion</a>. It's leveraging a series of acquisitions to move beyond sales force automation into marketing (Buddy Media), HR (Rypple), and sentiment analysis (Radian6). The common threads: social-media-rich apps on a cloud base. Salesforce.com is a force to be reckoned with long term, assuming that it (and its $18 billion market cap) don't get acquired by one of the following players. <P> <strong>Oracle</strong>. Small and focused are hardly the calling cards of Oracle, which has acquired about 20 companies <em>since</em> its $7.4 billion purchase of Sun in 2010. Among those far flung purchases: Pillar Data Systems (storage systems), Endeca (e-commerce and business intelligence software), FatWire Software (Web content management), RightNow (cloud-based CRM apps), and Taleo (cloud-based HR apps). Oracle's common threads are its Fusion application suite (six long years in the making, knitting together its existing apps with its amalgamation of PeopleSoft, JD Edwards, Siebel, and other apps) and Exa-line of integrated hardware-software appliances. Oracle's financial success speaks for itself. But as my colleague Art Wittmann writes, <a href="http://www.informationweek.com/news/global-cio/interviews/240001682">Oracle's recent cloud announcement</a>, an attempt to roll up everything from PeopleSoft to Sun to RightNow to Taleo, was all over the map. Oracle may be doing well for itself, but it needs to do better for customers. <P> <strong>IBM</strong>. Say this much for IBM: It has a compelling vision, Smarter Planet, and it has acquired early and often to feed that vision. A prime example is its $3.5 billion acquisition of PWC Consulting in 2002, a bold move into business consulting. Another tenet of Smarter Planet is business intelligence and data analytics, now a core competency that IBM built on top of Cognos, SPSS, Netezza, and a number of smaller acquisitions. More recently, IBM has plowed into the next major business technology growth market, marketing automation, snapping up Coremetrics, Unica, and Tealeaf. <P> <strong>SAP</strong>. What do Business Objects, Sybase, TomorrowNow, SuccessFactors, and Ariba have in common? Not a lot--other than they were all big SAP acquisitions. The BusinessObjects (business intelligence) and Sybase (databases and mobile tools) deals have produced workmanlike results, while it's still too early to say whether SuccessFactors (HR) and Ariba (procurement) will elevate SAP into the cloud big leagues after the company's painfully slow start with Business ByDesign. An unmitigated disaster was TomorrowNow, which SAP acquired in 2005 to provide technical support services to licensees of rival PeopleSoft software. TomorrowNow, which SAP shut down in 2008, ended up costing SAP more than $300 million in legal damages, after it admitted to infringing Oracle's copyrights on PeopleSoft software. <P> <!-- KINDLE EXCLUDE --> <!-- GLOBAL CIO GLOBE --> <div style="margin:0; padding:0 0 10px 15px; width:244px; float:right;"> <div style="margin:0; border-top:1px solid black; border-bottom:1px solid black; padding:6px;"> <a href="http://www.informationweek.com/global-cio/"><img src="http://twimgs.com/infoweek/1217/217ID_GlobalCIO_75.jpg" width="75" height="75" border="0" align="right" alt="Global CIO" style="margin:0 0 6px 6px;"></a> <div style="margin:0 0 6px 0; font-size:1.3em; font-weight:bold; color:#113e53;">Global CIOs: A Site Just For You</div> <span style="font-size:.9em; font-weight:bold;">Visit <a href="http://www.informationweek.com/global-cio/">InformationWeek's Global CIO</a> -- our online community and information resource for CIOs operating in the global economy.</span> </div> </div> <!-- /GLOBAL CIO GLOBE --> <!-- /KINDLE EXCLUDE --> <P> <strong>Dell</strong>. After eschewing acquisitions during its first decade, Dell has snapped up a range of mostly data center and cloud computing vendors during the past several years. EqualLogic and Compellent placed Dell firmly into storage. Force10 got it into Ethernet switching. SecureWorks, SonicWall, and AppAssure beefed up its security. And Clerity, Make Technologies, and Wyse will help Dell modernize customers' legacy applications. It's not sexy stuff, but it's a consistent, cumulative strategy. <P> <strong>HP</strong>. Last and possibly least is HP, which, on its third CEO in two years, is still vacillating when it comes to a vision. It parted with $25 billion to buy Compaq in 2002 and $1.2 billion to buy Palm in 2010, only to plot an exit from those businesses last year &#8230; only to reverse course (sort of) this year under new CEO Meg Whitman. HP shelled out about $10 billion for content management software vendor Autonomy and an undisclosed sum for analytics software vendor Vertica last year, following the failure of its internally developed Neoview big data platform and long after IBM and EMC had acquired market leaders in that sector. HP won a bidding war against Dell for storage vendor 3Par, but the $2.3 billion purchase price was more than twice Dell's initial offer. HP is still trying to make sense of its $13.9 billion acquisition of EDS in 2008. <P> <i>At this year's <a href="http://informationweek.com/conference">InformationWeek 500 Conference</a> C-level execs will gather to discuss how they're rewriting the old IT rulebook and accelerating business execution. At the St. Regis Monarch Beach, Dana Point, Calif., Sept. 9-11. </i>