CIOs Soar To Strategic Role

Two years ago, when speculation was running rife about who would succeed John F. "Jack" Welch Jr. as General Electric Co.'s chairman and CEO, Gary M. Reiner was on a few short lists. That's significant, because Reiner is GE's chief information officer (CIO), not the kind of job that's traditionally led to the CEO's suite. But during the past few years the role of the CIO in a lot of companies -- not just GE -- has changed dramatically. The CIO is no longer the geek in the basement who keeps computer systems up and running. He -- and increasingly she -- is more likely to be a business-savvy strategic player who, in addition to information technology, is involved with planning, product development, and sales and marketing. The rise of the Internet and the advance of e-business activity up and down the value chains that link suppliers, producers and customers are among the principal reasons that the role -- really the roles -- of the CIO continues to change. Interestingly, Y2K, an immediate concern of CIOs, CEOs, COOs and other executives three years ago, has not been much of a factor in their changing roles, many CIOs say. In a single, energized sentence, Rochester, N.Y.-based Patricia A. Cusick, a former IBM Corp. plant manager who has been Xerox Corp.'s CIO for nearly three years, skillfully captures much of the new chief information officer's role: "It's being able to understand the business you're in, the business strategy of the firm, the language of the business [and] the problems of the business, and then being able to align and apply the appropriate IT solutions to support, enable, drive and grow the business." However, for other CIOs their new role has several other elements as well. "I am certainly not the person in the basement keeping the network up," quips Robert Obee, vice president and CIO at Akron, Ohio-based Roadway Express, a Roadway Corp. subsidiary that deals in less-than-truckload shipments of industrial, commercial and retail goods. Indeed, during the past few years, Obee, in addition to narrower IT concerns, has been involved in customer pricing and relationship decisions, management development, presentations to Wall Street analysts, and has served as an invited adviser to Roadway's board of directors. John Ciulla, CIO at Vignette Corp., an Austin, Texas-based maker of content-management software, says more than half of his time is spent on the company's purchasing, marketing, sales, operation-strategy and product-development decisions. "These days, I spend less than 50% of my time on what I'll call the traditional CIO role of managing the systems," figures Ciulla. Such non-traditional roles also differentiate chief information officers from chief technology officers. "The CTO is more of a pure technologist who has a programming base at heart and who is charged with delivering the technology tools that make the company more efficient," believes James Thie, CIO and vice president of information technology at Ultimate Software Group Inc., Weston, Fla. "In oversimplified terms, the CTO develops new technologies. The CIO implements them, makes them work." Emphasis on execution sure seems to apply to Steve Horan, the CIO at Parametric Technology Corp., a Needham, Mass., software producer. "My job is to make certain, from a technology standpoint, that we are focusing on implementing those technologies, those processes, those capabilities that are going to make our shareholders happier and our company more successful," he says. Indeed, Horan says that in virtually any company in any industry, the CIO's primary role is to assure that technology is being used "in the most effective fashion" and that it is a competitive advantage. "A CIO is uniquely positioned in any business today, because there is not a single element of business that does not require information," contends Irving "Bubba" Tyler, vice president and CIO at Quaker Chemicals Corp. In the summer of 1999, at the time he became the company's first CIO, there was a deliberate shift in emphasis away from information technology and to information services (IS) at the Conshohocken, Pa.-based specialty chemicals producer. "We called it 'profiting from knowledge,' " relates Tyler. "Our goal was to show -- and convince -- our business customers that IS could be a strategic enabler of their strategies. And we laid out a program to deliver global knowledge management, global business analytics and common business processing." In fact, Tyler believes in staying ahead of the customer. "You need to be a little bit on the leading edge, to push and pressure people to take a couple of chances and try some things differently," he states. "It's a little bit of a risky position, because sometimes things don't work, sometimes they take longer than people think, and sometimes people get tired of hearing the story," he acknowledges. But "being a little bit of a pain-in-the-tail is a good thing for a CIO." School For Change? Although some U.S. universities and business schools offer courses designed to make people more effective and productive CIOs, there is really no formal school in the U.S. for chief information officers. So, does it make any difference what a CIO's background is? Does it matter whether he or she was ever a techie? To many among the new breed of CIOs it does make difference. But the difference may surprise you. "It appears to be that many more CIOs are coming from a more traditional 'business' background as opposed to a pure technology IS [information systems] background," observes John Bothwell, IBM's vice president for strategic sourcing and a keen observer of the new breed of CIO. In fact, "our new CIO, Phil Thompson, is very technically competent. But he wasn't a technologist," notes Bothwell. Thompson's heritage is manufacturing. Quaker Chemical's Tyler has a finance background. A former director of finance for Quaker's U.S. operations and international controller for ICI PLC's aerospace and automotive business, he has bachelor's and master's degrees in business administration and is a certified public accountant. "Business background and business acumen are absolutely essential," says Xerox's Cusick, who made a number of lateral moves in and out of businesses earlier in her career. "Without the business management [experience] it would be very difficult to interact with your peers effectively about strategies, goals and priorities," she insists. "It's still tough to be a good CIO without having some technological knowledge and skills. But I list it third after people skills and [overall] business skills and knowledge," says Roadway's Obee, who has three degrees, including a doctorate, in business. "We need to be able to [quickly] see opportunities and go out into the business area and even our customers' and vendors' business areas. And those are skills that your average propeller-head would not be likely to have." Companies -- high-tech and otherwise -- that are making the most out of technology and using it to improve or even transform their businesses are widening the scope of the CIOs to such areas as marketing, sales, mergers and acquisitions and partnerships, emphasizes Pamela Arora, CIO at Perot Systems Corp., an information technology services provider in Plano, Texas. And, she says, it's "imperative" that the CIO understand the strategy of the business and be a partner in setting strategy. "As CIO, you are not going to be able to align with company strategy unless you understand it. And you're not going to be able to understand it unless you are part of the business team," she stresses. "[That means] being invited to meetings to make sure you are fully privy to what is trying to be accomplished, being involved in sales-support efforts and talking with customers to see what some of their needs are." CIO Stretch Goals Despite the ascent from the basement to the boardroom, CIOs still have work to do, according to Steve Schuckenbrock, managing partner of client services at the Feld Group, a Dallas-based consulting firm that works with companies on developing technology strategies and CIO leadership. He says CIOs often are falling short of CEO expectations. In the search for sustainable strategic IT solutions, more than a few CIOs mistakenly view speed and efficiency as mutually exclusive options, Schuckenbrock says. As a result, initial gains from their efforts are lost, flexibility isn't achieved, the CEO is frustrated, the CIO is canned, and someone else is hired. Despite the shortcomings of some, however, the fact remains that CIOs have a remarkable vantage point from which to view the workings of their companies -- and from which to be significant strategic players. "One of the coolest parts, one of the best parts, of being a CIO is that you can actually see everything happening throughout the supply chain . . . at the transaction level," Schuckenbrock says. "What a tremendous power base!"