CIOs Agree on Key Issues

by Jeff Lipschultz

As technology standards, security requirements, and outsourcing decisions continue to challenge even the most resourceful Chief Information Officer (CIO), it's now more important than ever for CIOs to collaborate on their strategies. The technology community, as a whole, has seen tumultuous change over the past 18 months, and many of the current challenges will dictate which companies will lead - and which will follow.

While working with many leading companies, Attenza recognized the need for providing a forum for CIOs to discuss common issues to confirm or redefine approaches to their key challenges. Nine CIOs (see list) met in late March at the new Hart eCenter at Southern Methodist University in Dallas, Texas, to discuss topics such as their new roles in technology companies; ever-evolving standards; technology trends; knowledge management; security; outsourcing; and automation.

As advancements in operational technologies continue to evolve, today's CIOs are finding more time to be involved in many more aspects of their company's business. Recognizing that e-mail systems and networks are now commodity services, these executives are concentrating on core competencies, revenue-generating activities, and strategy. "A Chief Information Officer needs to understand the company's strategy inside and out," said Pamela Arora, CIO at Perot Systems. "Unless you understand what your company is trying to achieve, you can't deliver the broader solution that gets the return your company and ultimately external clients require."

As a buyer of technologies, CIOs are the perfect focus group for marketing and product development teams to validate product direction. By understanding how new technologies can improve the product development cycles, CIOs are helping their companies launch new product faster with less capital investment. These advancements can even lead to the ability to create new business initiatives.

Interestingly, CIOs have also found their role expand beyond marketing into sales. "When buying software, who better to talk to than another CIO?" asked John Ciulla, CIO at Vignette Corporation. In many cases, these CIOs have found potential clients want to know if the inventor is also a user.

The roundtable participants also agreed that CIOs play an integral role in partnerships. "Seamlessly connecting with partners has allowed us to extend the reach to potential clients," said Alan Katz, CIO at W.R. Hambrecht & Co.

Summarizing the role of today's CIO, the executives agreed that the very pace of technological advances are challenging CIOs not only to address traditional roles of keepers of the 'bits and bytes' that are the foundation of the business, but also to be active in sales and marketing, new product development, strategic planning, and financial accountability. To succeed in this endeavor, CIOs must be multi-talented. As Ms. Arora observed, "Expertise needs to be very diverse - from understanding technology to business drivers. This understanding enables alignment with strategy which is your company's success map."

One of the continually challenging strategy decisions the executives identified centers around software standards. "The problem is standards are gray," said Jeff Smith, Founder and former CIO at Onramp Technologies, an ISP acquired by Verio/NTT. "It's a huge challenge for a CIO to keep abreast of those technologies and to predict which standard gets adopted." Choosing standards is critical; selecting the wrong platform can be disastrous. "It's about how you protect your investment, and if you're betting on a single horse, it's a challenge," said William Jones, CIO at Tivoli, an IBM company.

The group also felt companies need to influence the direction of standards proactively. "CIOs can play more of a role in shaping standards," said Bill Bowers, a Vice President at i2 Technologies. "Managers like us have to start putting our foot down and pushing for standards at each level."

Along the same lines of predicting prominent standards is staying ahead of the curve regarding next generation technology trends. CIOs are thinking about pervasive computing, expanding a range of capabilities beyond personal computers to handheld organizers, cell phones, and two-way pagers. The group cited customer relationship management (CRM) and Web services as areas of interest. "CRM is no longer about the front office. It is about how you merge the demand chain with the supply chain," said Mr. Bowers. "Traditionally CRM solutions have been applied to product or very well defined services. This model is going to transgress into far more complicated relationships as well," added Ms. Arora.

The group discussed an example where a company outsources IT. Having a portal that tells them all about that relationship and having it customized for that particular profile, whether it be an executive or an IT manager can be powerful. In the past, CRM has been a very specific, defined kind of interaction; it will be much more complex with the systems that will be able to help facilitate those relationships and the communication between the relationships.

The participants also were interested in Web services. "Web services are very intriguing," said Mr. Ciulla, "primarily because they can open the door to new business opportunities by making it easy to connect with customers and partners; they can deliver dramatically more personal, integrated experiences to users; and save time and money by cutting development time." Mr. Smith, reflecting back on the software standards discussion, noted that Web services can bridge the gap between differing standards by allowing applications to communicate and share data over the Internet, regardless of operating system, device, or programming language. Software delivered as a Web service can be a competitive advantage. Web services can use the Internet to enable software applications to more easily work together, enabling easier integration within and between businesses while creating opportunities to more meaningfully connect with consumers. Web services can also greatly expands the number of customers and business partners that can come in contact with a business's services.

"With the Internet, the expectation of IT is 24-by-7, and every wart is visible: your applications have to become utilities," said Mr. Chow. Web-based software maximizes both opportunities to retain customers and to improve return on investment. Implemented well, it can result in dramatic improvements in overall corporate efficiency and equally dramatic reductions in cost. Despite the radical benefits it brings, it does not involve any radical restructuring of an organization's development and thought process. It preserves and enhances the value of previous investments by building on the success of existing infrastructure.

The discussion of technology trends led to the observation that pervasive computing, collaborative enterprise, and Web services will help shape how companies manage relationships and knowledge. "Knowledge management is how you preserve history and learn how to do new things from old things," said Dr. Peter Raad, SMU's Hart eCenter Director and Professor. As the group shared opinions on the direction of knowledge management, they all agreed that customers in today's fast-paced business world not only expect, but demand, immediate feedback. The telephone is no longer the easiest, fastest, or best way to interact with customers. The optimal way may be leveraging a self-service knowledgebase since it improves customer interaction and saves companies money.

The group also agreed that knowledge management promotes consistency. Since support personnel have access to the same information, their responses are always consistent solutions. As it relates to the CRM discussion, by utilizing knowledge management, companies can collect, organize, and share knowledge across all customer and employee contact points. It helps enhance the value of investments in eCommerce, analytics, contact center, and CRM systems.

It was recognized that knowledge management is not an installed product. It is a process that does not begin with IT or end with IT. IT is merely the plumbing. Knowledge management solutions are tightly integrated combinations of software, policies, and procedures that work together to help users access data needed to perform jobs efficiently.

The group tackled the topic of security, noting the conundrum that "it is at completely opposite ends of information anytime, anywhere," observed Tom Chow, former CIO at NBCi. CIOs now spend far more time dealing with security as hackers continually try to penetrate their systems through the Internet. "There are always more clever attacks," said Mr. Katz.

The group noted that for smaller companies, security is a real challenge because they do not necessarily have the people, policies, and standards. "You are looking at identity management, policy management, authentication, and IDS," said Mr. Ciulla.

Another aspect to security and data protection is business continuity and disaster recovery. "(With) September 11th, I don't need to say anymore," shared Mr. Jones. "Financial institutions that were tenants in the World Trade Towers were way ahead of many in preparation. I think it was a wake-up call for a lot of CIOs in terms of whether they are prepared for this risk and know what they need to do in the event of a disaster."

When determining a company's strategies for all these different initiatives, CIOs must consider what elements of the delivery will be outsourced. The executives at the roundtable discussion all agreed outsourcing must be based on value, not strictly on cost savings. By addressing value, the executives take into account the less obvious advantages: leveraging other companies' expertise, freedom to focus on key competencies, and greater flexibility.

From an accounting perspective, outsourcing is a variable investment that can be increased or decreased based on the relative importance of the project. However, with cost savings may come sacrifice. The CIO must determine what elements of service can be sacrificed. "Part of determining the value is not only how much does it cost," said Mr. Jones, "but also are you going to lose things in terms of service that you may not want to lose?" For commodity-type services that do not drive a real value to the organization, CIOs must dedicate the effort to finding new technologies that can improve those services, not necessarily running those services. "This is where you start to look at services from a self-service perspective," said Mr. Ciulla. "You start looking at companies like Attenza, and you start looking at outsourced services to help you focus on your core competencies."

The group agreed that automated software can ensure their systems run smoothly so they can concentrate on the bigger picture. For repetitive inquiries such as in support, for example, there is great value in having a system that lets users quickly and easily access stored knowledge. As this is becoming a new standard of client services, many consumers now expect to find online self-service options that let them help themselves to information when they want or need an alternative to conventional service channels. They also have come to expect highly personalized applications that let them accomplish tasks such as changing account information, checking the status of orders, and researching products or services.

Besides delivering the obvious benefits that come from making customers happier, Web self-service can help businesses achieve greater efficiency and lower customer-service costs by reducing call-center activity that requires manual handling and routing. Web self-service also can deliver return on investment by leveraging a company's Internet infrastructure, legacy systems, content repositories, and other existing technologies. Given the significant investments that many businesses have made in customer-relationship management suites, it's only natural that CIOs turn to these same CRM products when looking to add out-of-the-box Web self-service to their customer-service operations.

The participants of the roundtable concluded there are no limits to the contributions they can make to their companies and sectors. Their role has evolved to a position where they are empowered to contribute to all facets of their business. Being aware of how they can influence standards, prioritize key initiatives, and leverage emerging technologies can be the key to setting them apart from their peers. "CIOs used to be basement dwellers seldom seen by office colleagues," said Mr. Ciulla. "Now we are enablers of technology, strategists, and sales advocates."

• Pamela Arora, Chief Information Officer, Perot Systems Corp. (NYSE: PER), a global leader in IT services and business solutions.
• Bill Bowers, Vice-President of CRM at i2 Technologies (NASDAQ: ITWO), a leading provider of e-business and marketplace software solutions.
• Tom Chow, former Chief Information Officer at NBCi.
• John Ciulla, Chief Information Officer at Vignette Corp. (NASDAQ: VIGN), a global provider of customer-driven Internet application software products and services.
• William Jones, Chief Information Officer at Tivoli Systems Inc., a software unit of IBM (NYSE: IBM).
• Alan Katz, Chief Information Officer of W.R. Hambrecht & Co., a San Francisco-based is a financial services firm
• Dr. Peter Raad, Professor and Hart eCenter Director at Southern Methodist University
• Karl Schultz, Chief Information Officer of Attenza.
• Jeff Smith, Founder and Chief Information Officer, Onramp Technologies, a Internet Services provider acquired by Verio/NTT.
• Lawrence Schwartz, Attenza's Chief Executive Officer, moderated the roundtable.

Jeff Lipschultz is Director of Marketing Communications and Sales Operations with Attenza, 1525 North Stemmons Freeway, Dallas, TX 75207. He provided permission to use this article at DSSResources.COM on Wednesday, April 17, 2002. Attenza, Inc. is a privately held company incorporated in January 1997. It is a provider of online customer service and support software. For more information check http://www.attenza.com. Toll free 1-866-ATTENZA. © ATTENZA, INC. 2002. ALL RIGHTS RESERVED. USED BY PERMISSION. This article was posted at DSSResources.COM on May 5, 2002.

Cite this article as Lipschultz, J. "CIOs Agree on Key Issues", DSSResources.COM, 05/05/2002.