The Making of a New Business Leader

New threats and risks present an opportunity unlike any in the recent past. All the CIO needs to do is reinvent his role and see old technologies in new light.

I would like to start with an anecdote, which I know is rather old, but its nice to start from the very beginning. It dates back to the mid 80s and goes like this: “A group of American managers visiting Japan found out that their counterparts were regularly supplied with information on the proportion of products that passed out of the factory without reworking or rectification. They found that the typical percentage of products that needed no reworking was 92 per cent. The American managers found that no such information was provided to them. On investigation, back home in America, this percentage was found to be eight per cent. They worked on this factor for six months and pushed the percentage up to 66 per cent.”

This small tale of lore hides a very profound message (or so I feel); the story, in no uncertain terms, tells us that to do the right things right, you must first know what the right things are. The EDP Manager of yesterday transformed into the CIO of today by knowing and then doing the right things.

But life for the CIO has come full circle today. Its time for the CIO to now start to figure out what the right things are, as the challenges of yesteryears have been won over.

My conviction about the subject has been further strengthened after I recently finished a book that started by lamenting about the decline in the importance and relevance of the marketing department and the CMO (The author later suggested strategies to overcome each of the challenges staring the CMO right in the eye). And throughout my reading the book, I could imagine a similar book being written about the CIO in the very near future. Actually if you read the business press, some have already started talking about it. And taking the cue from there one of my friends has very eloquently re-expanded CIO to “Career Is Over”, as an augury of things to come.

The role and the “value-add” provided by the CIO has come under even more scrutiny in the recent and all this has been largely driven by the increasing importance of managing IT assets strategically and extract maximum business value from these.

Business Results The Compliance Way
While it is a definite challenge, but the pressure of delivering tangible business results opens floodgates of opportunity for our dear friend, the CIO. I will as briefly as possible try to explain what I mean. But before I do that, I would like to remind you that this is a diagnostic and not a prescriptive effort.

The CIO has an opportunity to help his fellow executives in the high priority area of lowering risk and improving governance. Look at new reports around you and you will realize that poor corporate governance and accounting scandals due to non-compliance are leaving no one untouched. Enron and Tyco are history now. Even the great Warren Buffet is under the scanner today. Recent reports pointed that Federal and State agencies are investigating Buffet’s American International Group for accounting malpractices.

This recent epidemic of accounting scandals has prompted lawmakers and regulators to create strict new rules for transparency, accountability, and governance. Since most of this data today is digital in form and stored on assets (simply put it hard drives) that are under the purview of the CIO. Therefore it may not be entirely incorrect to say that the CIO must play an active role is ensuring that all regulatory compliances are met with. It may be becoming increasingly difficult to stay on top of these increasing complex and demanding regulatory requirements. But by making the CIO responsible for following these regulatory changes and translating the rules into business policy, processes, and the consequent architectural changes (if any).
And the tool that is best equipped to help overcome compliance issues has always been at the disposal of the CIO and his colleagues: ERP.

An ERP solution does all that is necessary for compliance. It captures and stores data; it preserves data integrity (another one of CIO’s business responsibilities); secures information and ensures information is made available at the appropriate times. All this needs is some bit of coordination with other departmental heads and voila, the CIO has killed more than a couple of birds with a single stone. The compliance issue has certainly been addressed; it also helps integration among the various business departments that are comfortable working as silos.

The other upside of all this is that its not just accounting regulations that can be adhered to. Most of the better ERP packages of today are being designed and written keeping all regulatory compliances in mind for instance in the case of the pharmaceutical industry, the FDA (Food and Drug Administration) compliance is adhered to.

Its time for the CIO to transmogrify his role form that of a technologist (as most organizations delegate that role to the CIO) to a business leader, to a strategic partner of the board.

This is typical consultant-speak! While it is dangerous to prophesize but it doesn't hurt once in a while.