The Evolution of the IT Leader

Five decades of innovation and chaos, politics and intrigue, technology and business have molded the CIO into a unique corporate executive.

Information technology is no longer the black box in the corporate basement, and CIOs are getting accustomed to their seats in the boardroom. With five decades of corporate experience to look back on, IT leaders are prepared to consider where technology and their roles are headed.

We asked four famous CIOs to help us examine the artifacts of the evolving IT culture and the changing function of the IT leader.

Tabulating Machines to Mainframes

In the 1960s, companies were just growing out of tabulating machines and into computers. IT was all about data processing, or DP. The closest thing to a CIO was the director of DP. The skill set was strictly technical, and more often than not, the office was in the basement.

"We worked for the controller and did all the back-office stuff," says Charlie Feld. "Nobody in the company even knew where we were."

DP was focused on automating manual functions, especially in finance and transaction processing. It was characterized by the terms centralized, glass house, controlled environment, mainframe computing and time sharing.

"People often thought of this function as a utility for the corporation," recalls Ron Ponder. "It added little external or informational value."

While IT did the grunt work, it was the chief financial officer who got the glory, says Paul A. Strassmann. "The CIO worked for the CFO to install systems, which allowed the CFO to know all about cost, production and shipment," he says. "The CFO was the first to figure out that information technology gave him unbelievable power because he could know the results from the factories before the factory manager." And it was the CFO who controlled the mainframe that powered that information.

Miniskirts and Minicomputers

In the 1970s, engineers and production and marketing people rebelled against the CFO's reign and bought minicomputers for their units. "Suddenly we had a devolution of power," Strassmann says.

DP didn't just work for accounting anymore. "All the function heads began to realize they could improve productivity by using technology," Feld says. Soon, IT was doing so much work for the business unit vice presidents that its name changed to management information systems, or MIS.

The information landscape was soon a mishmash of misaligned data. Simultaneously, a new generation of IT leaders with systems integration skills was acquiring power by implementing and controlling early networks of mainframes with dumb terminals. "They were clunky and bad," Strassmann recalls. But they were extending the reach of IT into the business.

The ability to improve the state of technology boosted the status of some MIS directors. At Xerox Corp., for example, Strassmann was charged by the president with unifying the corporate picture, and that required the authority to wrest back central control.

But the big bang of departmental computing couldn't be undone, and the functional silos that haunt IT to this day continued to develop. "From the mid '70s to the early '90s, everybody was working in functional silos," Feld says. Eventually, many of the silos were controlled by divisional CIOs, and corporate CIOs struggled to establish and maintain control over them.

All Hell Breaks Loose

"[In] comes the early '80s, and all hell breaks lose," Strassmann recalls. The microcomputer debuted in business, and everyone, from the secretarial pool to the mailroom, was smitten. Overnight, the bulk of many companies' computing capacity shifted from the central mainframe to scattered PCs. "The challenge then was to control the chaos," Strassmann says.

But amid the chaos, management began to see the potential of technology in the hands of business people and to look to IT for solutions to business problems. For example, Japanese auto sales were trouncing those of U.S. carmakers, and the answer seemed to be business process re-engineering powered by IT.

Amid these great expectations, the role of the IT leader changed dramatically. Upper management was suddenly looking for saviors, not geeks. "They want muscle, someone who can force change," Strassmann recalls. The chief information officer, or CIO, a newly coined term, was suddenly viewed as a valuable, high-level executive.

In his first official job as CIO, Ralph Szygenda was information officer of the defense systems business at Texas Instruments Inc. "I was very different from the traditional CIO. I had come from running a business environment at TI. When I took over at defense systems, [they wanted] someone who knew technology but mostly who understood the business environment."

In this role, some CIOs wrought changes that are still studied in business schools today. At Frito-Lay Inc., for example, Feld built a mobile sales management system that revolutionized the food industry. And at FedEx Corp., Ponder's package-tracking system proved that information about a package is as important as its location.

But in many places, the pendulum swung too far toward business. "They were moving away from technical folks and bringing people in that didn't have technical skill but had leadership and business acumen," says Feld. "A lot of companies got into trouble, because CIOs made some really bad choices because they didn't understand technology and jumped on the fads."

Meanwhile, the decentralization of IT was crippling many companies' efforts. "You couldn't see from one end to another because the silos had 35 versions of what a customer is, and there was no one truth," Feld recalls.

Power Play

By the '90s, many companies recognized that technology could boost profits, and the CIO had become a power position, often reporting to the CEO. But the push and pull of centralization and decentralization continued. Though there was still heavy reliance on the mainframe, the entrenchment of the PC brought on the era of client/server technology.

As companies built user-centric, client/server architectures, corporate investment in IT skyrocketed, reinforcing the role of the CIO as planner, architect and budget manager. "The corporation began to require a central reporting capacity for these costs," Ponder explains. "So while cost considerations pulled toward centralizing the function, the rollout of client/server pulled toward distributed."

"CIOs went from being technologists to being business guys with no technology," says Szygenda. "That didn't work because technology companies overwhelmed them and projects got in trouble. So they went back to the point where they still want someone that can integrate into the business and be a part of the CEO/CFO/CIO team -- and technology is a given."

In the mid to late '90s, business recognized the value of the Internet. Once again, early Internet activities were local and decentralized, but the CIO was soon charged with leveraging costs and opportunities across the company. By decade's end, global CIOs were multiplying. "This was someone brought in to exert influence over the divisional CIOs, to bring order, to focus on grand strategic plans, strategic architecture, networking, competitors and partners, to create a consistent view of the customers across the enterprise," says Ponder, who played that role at AT&T in the '90s -- as Szygenda did at General Motors Corp. during that time.

The New Millennium

Except for technical skills, today's CIO bears almost no relation to the IT leader Computerworld wrote about in its early editions. The DP director of the 1960s was a supporting player; today's CIO is a senior executive. The '60s IT view was internal; today's CIO is aligned with the business' world view. The DP director was a geek among propeller heads; today's CIO speaks business to business leaders.

Throughout this evolution, there's been one constant behind every success and failure: "Technology has never been richer, and the quality of IT people has never been better," Feld says. "So why have some IT shops built systems that revolutionize their business while others build a mess? It's leadership."

Melymuka is a Computerworld contributing writer in Duxbury, Mass. Contact her at kmelymuka@earthlink.net.

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Copyright © 2002 IDG Communications, Inc.

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