I've written before about the , a few months ago sharing some of the challenges encountered by Chevron CIO Louie Ehrlich. He offered some good advice, emphasizing the importance of making sure IT environments are efficient, educating IT staff about business needs and goals, and educating business leaders about IT capabilities.
CIOs appear to be making real headway in breaking out of the technologist box, judging by remarks made by Bruce Rogow during last night's keynote address at the Midmarket CIO event in Miami. Rogow, a former research director and executive fellow at Gartner who now heads his own IT Odyssey consulting firm, told Midmarket CIO attendees that 55 percent of CIOs he's interviewed in the past year are active participants in business and product development. IT is "moving from the back of the house to the front of the house," Rogow says.
IT plays a key role in a company's brand, something Rogow says more companies are discovering by performing internal analyses that assess IT involvement in applications that touch their customers and business partners. If they haven't done so already, CIOs should perform such analyses as it's typically an eye-opening exercise, Rogow says.
Being more directly involved in revenue-generating activities is great news for CIOs, but it also presents them with a whole new set of challenges, many of which Rogow covered in his presentation. Rogow says most of the executives he interviews tell him that while business is fine now, existing business models will not be viable within five years. There's an explosion of emerging IT-based market approaches, encompassing areas like mobile technology. Many of these approaches begin with business rather than IT funding and will be relatively inexpensive -- at least at first. But funding for the resulting "drop-down" expenses -- ongoing support, maintenance, integration and updates -- often comes from IT.
CIOs previously responded to new and disparate technologies by trying to rein them in and create a utilitarian footprint for global IT delivery. But now CIOs won't be able to employ this approach, Rogow says. They should expect changes and lots of them -- in vendors, architectures, skill sets and management styles.
IT organizations will be challenged to maintain standardization where it makes sense, to help control costs and increase efficiencies, while at the same time creating a more flexible IT environment to accommodate the coming changes.
The most common ways for CIOs to lower costs are to "beat the daylights out of your vendors" to get better deals and to consolidate IT resources. Yet those opportunities dwindle over time. While CIOs could once count on lowering their IT spend by 10 percent to 15 percent using these techniques, Rogow says it's now more typical to see savings of 5 percent to 8 percent. CIOs will be challenged to restructure their IT assets with the goal of achieving long-term savings, not just short-term ones.
There was good news for attendees of this conference, which is geared to CIOs of midmarket companies.