February 19, 2007 (Computerworld) --
CIO Steve Olive isn’t handing out any gold stars to IT for providing good PC support or networking service at Raytheon Integrated Defense Systems. Consistently reliable and excellent IT service should be a given, he says.
What businesses need and IT should be providing are innovative solutions to business challenges. That means creatively applying technology to produce goods more efficiently and at a lower cost, to sell and service more of them, and to do so at the highest possible profit margins.
It also means using IT to create new products and services and even whole new business models, says Darryl Lemecha, CIO at Alpharetta, Ga.-based ChoicePoint Inc. Because technology is embedded in just about everything a company does, “technology strategy and business strategy are now one,” he says.
Kathleen McNulty, CIO at The Schwan Food Co. in Marshall, Minn., puts it this way: “It’s not about IT automating the business anymore. It’s about innovating it, improving it.”
So, forget about IT supporting the business. IT leaders are focused on reinventing the business, starting with the IT organization.
Their timing couldn’t be better, according to Gartner Inc., which predicts that within five years, 60% of chief executives will make their CIOs responsible for using information as a strategic (read: revenue-generating) asset. Gartner also predicts that 40% of CEOs will make CIOs responsible for business model innovation.
But IT executives such as John Hinkle at Trans World Entertainment Corp., Patrick Bennett at E! Entertainment Television Inc. and Filippo Passerini at The Procter & Gamble Co. are all over this trend already. They are completely transforming their IT organizations, and everything is up for radical change, from how and where IT is housed within their companies to IT job titles. IT duties increasingly involve responsibility for business processes as well as the technology that supports them. Also up for reinvention is how IT value is measured.
“If you want to drive a significant amount of behavioral change in an organization, it takes some big swings,” says Hinkle. “Maybe that means dramatic structural change or changing what people do.” At Albany, N.Y.-based Trans World, it involved all of the above.
One of the first things Hinkle did when he came to Trans World from General Electric Co. was abolish the title of analyst and move people in that role into the project management office (PMO), which oversees all technology and business projects as well as all business process changes for the company’s 800 music stores. Project managers have developed expertise and a special rapport with the specific business functions to which they are dedicated. New projects and even systems changes go through the PMO, which uses Six Sigma project management processes.
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