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October 19, 2011
6 Min Read
No. 4: Harness Big Data
The term "big data" is relative. Fifteen years ago, the largest data warehouses in the U.S. were measured in single-digit terabytes, and only a handful of companies--the likes of Wal-Mart, AT&T, and MasterCard, as well as data specialists such as Acxiom--breathed that rarefied air. Today, the largest corporate data stores top many petabytes--but so what, if you're not analyzing that data to make more informed decisions.
Last year, when InformationWeek drilled down into what is driving companies' interest in "advanced analytics," including predictive, they ordered their priorities this way: optimize business processes (pricing, efficiency, etc.); identify business risk (fraud, customer churn, defaults, etc.); and anticipate new opportunities (cross selling, opening new markets, etc.). For example, Procter & Gamble executives worldwide regularly plug into conference rooms equipped with big-screen dashboards to discuss the latest market and product data--and take corrective actions according to those areas flagged as red or yellow. In a separate program, using a series of analytic models, P&G is predicting market share and other performance stats six to 12 months out.
All the Indian CIOs I spoke with mentioned big data as among their top priorities.
No. 3: Break Out Of The 80/20 Spending Trap
My former colleague Bob Evans used to beat this issue hard, and it's no time to let up. With IT budgets relatively flat at most companies, and with competitors fighting for every scrap of business, CIOs can no longer afford to spend 70% to 80% of their precious funds supporting and maintaining existing systems. They must shift, permanently, a big chunk of their budgets into growth initiatives--IT projects and programs that open new markets and drive new business rather than just maintain the status quo. Even the most innovative IT users in the U.S., as represented by our annual InformationWeek 500 ranking, spend 63% of their IT budgets on ongoing operations as opposed to new initiatives--a percentage that has barely budged in a decade.
This isn't a theoretical exercise. Shifting from 80/20 or 70/30 spending to 60/40 or 50/50 won't happen if CIOs don't step forward with a detailed plan to make it happen. When he was CIO of Hewlett-Packard, Randy Mott got its IT pros spending just 30% of their time on maintenance, down from 70%, as part of a three-year master plan under which HP consolidated data centers, applications, and data marts and modernized its infrastructure. Mott's plan forced the company's IT pros to document every hour they spent on new versus legacy work, and it forced the company's LOB and IT execs to agree on the revenue and other benefits to be derived from each and every IT project.
No. 2: Make IT One With The Business
Each year for more than a decade, the Society for Information Management has surveyed its CIO members, and their No. 1 concern is always the same: Improve IT and business "alignment." As one Indian CIO asked after my presentation in Mumbai last month: If this issue is so important to U.S. CIOs, just align already!
InformationWeek agrees that CIOs and their teams need to get on with it. In fact, we're not all that comfortable talking about "the business" and "IT" as if they're separate functions. You don't see CFOs or CMOs yearning to align with "the business," so why is this still such a sticking point for some CIOs? IT is the business at market leaders such as FedEx, Procter & Gamble, Wal-Mart, and University of Pittsburgh Medical Center--and it has been for many years.
We're encouraged by the fact that, according to our InformationWeek 500 research, CIOs are taking on formal responsibilities outside their IT organizations, in areas such as business process management, innovation, procurement, business services, and supply chain management. They're also getting more directly involved in new product development: 45% of InformationWeek 500 companies cited "introducing new IT-led products and services" among the top three ways they plan to innovate with technology this year, up from 37% in our 2009 survey.
Robert Urwiler, CIO of Vail Resorts, hires people who think like product developers and not just technologists, as the $1 billion company looks to develop "customer experience" applications, like its smartphone app that lets skiers and snowboarders brag about their mountain feats on their Facebook pages. Urwiler's two biggest partners at Vail: the CEO and CMO.
At Hero MotoCorp, India's largest maker of motorbikes, CIO Vijay Sethi reports to the CEO--as do the CIOs of most Indian companies whom I spoke with--and is part of a leadership team that also includes the CFO and heads of HR, operations, production, and supply chain. One interesting twist at Hero: Its technology users--not the IT organization--send status reports on IT projects, Sethi says.
No. 1: IT Is Too Darn Slow (And Needs To Get Faster)
InformationWeek thinks this issue is so important that we wrote a magazine cover story on it in February and made it the theme of our InformationWeek 500 Conference and issue in September. As editor Chris Murphy has articulated, this "need for speed" comes to a head when your sales and marketing and product development and HR groups say they can be ready to go with a new initiative in two months--and the IT organization says it will need six to nine months.
When IT becomes the bottleneck for new products, capabilities, and expansion, the company's ability to innovate and outmaneuver increasingly nimble competitors is in jeopardy--and the CIO's job is on the line. When we asked business technology execs in a recent survey to cite their biggest concerns, their No. 1 choice was "can't implement fast enough to meet business goals." American Express CIO Toby Redshaw looks at the challenge in a positive light, stating in a recent presentation to the company's board: "Small agile beats big slow--big agile beats everything."
The rapid-fire pace of consumer IT innovation has raised the technology expectations of companies' employees and customers--they demand to get new features and functionality at that same pace. At the same time, cloud computing, agile development, and other advances make accelerated business technology execution all the more possible. Take the FBI and its long-delayed Sentinel case management system, now on track after CIO Chad Fulgham introduced an agile, iterative software development methodology. "Fail fast and fail cheap" is Fulgham's credo. Better yet, innovate like your life depends on it.
VP and Editor in Chief, InformationWeek
To find out more about Rob Preston, please visit his page.
About the Author(s)
VP & Editor in Chief, InformationWeek
Rob Preston currently serves as VP and editor in chief of InformationWeek, where he oversees the editorial content and direction of its various website, digital magazine, Webcast, live and virtual event, and other products. Rob has 25 years of experience in high-tech publishing and media, during which time he has been a senior-level editor at CommunicationsWeek, CommunicationsWeek International, InternetWeek, and Network Computing. Rob has a B.A. in journalism from St. Bonaventure University and an M.A. in economics from Binghamton University.
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