Next-generation CIOs Should Focus on Change, Not Just Business

CIOs who think of themselves as savvy technologists skilled in aligning the work of the IT department with the goals of the parent corporation are in serious trouble and don't even know it.

They're smart, well trained, fully adapted to the last major wave of technology-fueled business innovation – and as anachronistic as a T. Rex expecting a giant meteor strike to bring great new opportunities for giant carnivorous saurians.

"Aligning IT with business – which has been a CIO's main goal since forever – that's gone," according to Chris Potts, director of Dominic Barrow Svs. Ltd., an IT strategy consultancy based in London.  "IT is too integral to the practice – to the operation of the business – to be something separate that you align. You can't align IT decision-making and business decision-making; you have to treat them as an integrated decision-making process."

That ability to go beyond IT-business alignment was an important factor in what made companies named to the Baseline 500 among the most effective users of technology in the business world, according to Paul Strassman, the productivity expert, IT consultant and former senior IT executive at Xerox, Kraft and NASA who did the principal analysis of Baseline 500 companies in 2007.

During its first 40 years of existence, IT's role was to reduce costs, increase the efficiency of existing operations and automate what it could, Strassmann said. As the structure of global business and economics changed, however, so did the requirement of IT to be more than a support structure for business decision makers.

"Unlike in the past, now companies outsource as much to 65 percent to 75 percent of their operations, so looking at IT relative to the complexity of a firm is no longer accurate," Strassmann said. "Many of these (Baseline 500 members) are hollow companies. GM gets 78 percent of its revenue from the work of outsiders, which is staggering."