Inside the CIO Brain Trust

The Research Board is the IT community's private think tank. In this rare interview, CEO Peter Sole talks about what's on the minds of top tech executives

As CEO of The Research Board Inc., Peter Sole commands the attention of the world's most influential CIOs. The board, which provides research services to the CIOs of 100 leading corporations, is an elite think tank based in New York whose members collectively wield tens of billions of dollars in IT buying power. The board also offers access to computer industry chiefs, who have been known to clear their calendars when summoned.

The board's greatest value, Sole says, is its ability to provide these IT leaders with the "time and space to think, to be challenged and to try out ideas with each other." Sole hails from a CIO background himself, having served as the top technologist at Dixons Group PLC and at Lloyd's, the leading underwriting firm in the U.K. In 1993, Sole founded Wentworth Research, a CIO research service in the U.K. and Hong Kong. Gartner Inc., which now owns The Research Board, acquired Wentworth in 1998. Sole went on to hold senior executive positions at Gartner, including head of research and advisory services in Europe, the Middle East and Africa and head of executive programs worldwide.

In its 30 years, The Research Board has studiously avoided press attention. But in this conversation with Computerworld Editor in Chief Maryfran Johnson, Sole discusses the most pressing challenges confronting CIOs at the world's leading corporations.

ROI: What do you see happening to the role of CIOs as they get more deeply involved with strategic business concerns?

SOLE: Many are not IT specialists. They are businesspeople with IT as part of their portfolio. Typically, they are concerned with not just IT, but other responsibilities like logistics, operations, supply chain, e-business initiatives. Some control venture capital funds set up to develop relationships between their organizations and leading-edge companies. They all sit on the executive committee or the board, and without exception they are seen as one of the [senior management] team. Their key responsibilities are making sure their companies get maximum benefit from IT investment.

ROI: How worried are CIOs about their continually evolving roles in e-business?

SOLE: That's a function of whether they're pursuing these things or being pursued by them. The role of the CIO is about risk and involvement; e-business is no different. The best CIOs are always looking for leverage opportunities around new technologies or software. They keep their eye on the bleeding edge, either by being on it or knowing who's on it. Some have little groups with experimental work ongoing; some visit the venture capitalists. They all have a way of keeping a finger on the pulse.

ROI: There is such an overwhelming amount of information available from multiple sources, though. How do CIOs sift through it all to find value and insight?

SOLE: One of the best things a CIO can do is get the smartest, most experienced people around and compare notes. Ask about the quality of their suppliers or their experience with, say, a particular [enterprise resource planning] system. What we've created [at The Research Board] is an environment of trust, which takes years to establish, where very senior people can deal with quite sensitive things. You have to be certain that your confidences won't be abused, and you'll get something back for what you invest.

ROI: What kind of an impact has all the buzz about the New Economy had on your members?

SOLE: Some people talk about the New Economy, and others talk about the "Now" Economy. I think it's really the "Know" Economy. By that I don't just mean instant gratification, but rather the commercial difference between knowing now and knowing later. It's about removing the uncertainty. Most importantly, you want to remove the time lag, which costs you money. In the Know Economy, you want to know what's going on, and you want to be able to react on the spot, ideally in real time.

It's no accident that the currency markets and equity markets operate in real time, where fractions of a second matter. They are setting the standard for business generally.

ROI: Is it fair to say that return on investment concerns are front and center with CIOs these days?

SOLE: That depends on the culture of the company. Some are very ROI-driven, where every business proposal must have a traditional assessment of ROI. This can be very difficult for major efforts like infrastructure [because] trying to estimate the likely return is very difficult. It's like investing funds in new ventures; it's speculative. It's the judgment around the assumptions that matters.

CIOs are still having to justify projects the way they always did, but I do think we've moved away from cost savings as the classic driver. "Install this, get rid of these people, save money." Those days are gone. What people are much more interested in now is removing friction in the way the company does business . . . sharpening up the supply chain, right from suppliers through to the customer. The big emphasis now is on speed and agility, which of course implies innovation.

The rules of competition change as industries find new ways of doing things. What is making it possible, of course, is the Internet and open standards. It also means our installed base of systems needs a refurbishment. If you have to wait for information about what's happening in your supply chain or your customer base, the longer it takes to react, the more inefficiency you have in your system.

ROI: Is there such a thing as a system that's too efficient?

SOLE: There can be a downside with efficiency. As we take the slack out, we become more dependent on the system and quality of information in it. It's a creeping dependence. A good example is the supply chain behind the fuel crisis in the U.K. [last year]. It took just four days for the country to come to a grinding halt. The British government had no idea that the supply chain had become so compressed and hence fragile. Once they stopped things up in the supply chain, the whole thing drained out in no time. That can happen to companies. An individual supplier gets into trouble, and if you don't know quickly enough, you're in trouble.

ROI: Does the quality of its IT relate more directly these days to how well a company deals with its customers and suppliers?

SOLE: Increasingly, a company's brand and its values are going to be supported - or detracted from - by the quality of its information systems. If a company is decent, legal, honest and responsive to customers, yet when you phone up no one can tell you where your order is or the right price in your market, or whether you are one of their top customers, then that's inconsistent with the mission and values they're trying to project. The most vivid example of systems being out of line with customer expectations, hence damaging the brand, is the recent presidential election.

Consumer expectations are being driven by best in class. The fact that you're an Old Economy company doesn't make you immune from these competitive pressures. Everything you do is a marketing statement. Every interaction says something about your brand. Customers are getting fed up with organizations that don't know who they are. What is it Peter Drucker said? "Marketing and innovation are everything - the rest is overhead." If every CIO increased his or her focus of attention to marketing and innovation, say by 20% per annum, that would be great.

ROI: Are Research Board members making technology investments to match best of class or to drive the definition of best in class?

SOLE: They don't sit down and say, "Hey, how do we create best in breed?" They sit down and say, "How do we do this much better for our customers? How do we change the way we do business?" I think the most successful companies are focused on what they're doing and not worrying too much about the other guys. They are - all the time - trying to set the pace. They're trying to make their relationship with the customer the best it can be.

ROI: How are they improving those relationships with customers?

SOLE: I see CIOs very active in webifying their businesses and opening systems up to be accessible to customers and suppliers. So they are all heading in the direction of what I call joined-up computing and real-time systems. What I'm also observing is that there's an awful lot more collaboration within industry groups than there used to be. The airlines collaborate like mad, while still competing. So do many others. All these business-to-business exchanges, which must be sponsored and supported by the CIOs, are another example of collaboration. A significant proportion of Board members are personally involved in the creation of exchanges within their industries. It has required them to create some ground rules for this level of collaboration, but because IT is a collaborative kind of business, that does create a framework of trust. Being part of The Research Board, where trust and collaboration are part of the culture, also helps. roi

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