Before I Forget…

There are two basic ways to sell something.  Either a product gives the buyer something he wants—as satisfaction, comfort or money—or it prevents the buyer from getting something he doesn’t want: assault, fraud, burglaries or terrorist attacks.  It’s a truism in sales that it’s easier to sell someone something he wants than something he wants to avoid.  People are reluctant to buy insurance, or home security devices, or computer security anything.  It’s not they don’t ever buy these things, but it’s an uphill struggle.  The reason is psychological.  And it’s the same dynamic when it’s a security vendor trying to sell its products or services, a CIO trying to convince senior management to invest in security or a security officer trying to implement a security policy with her company’s employees.  It’s also true that the better you understand your buyer, the better you can sell.

Why People Are Willing to Take Risks
First, a bit about Prospect Theory, the underlying theory behind the newly popular field of behavioral economics.  Prospect Theory was developed by Daniel Kahneman and Amos Tversky in 1979 (Kahneman went on to win a Nobel Prize for this and other similar work) to explain how people make trade-offs that involve risk.  Before this work, economists had a model of “economic man,” a rational being who makes trade-offs based on some logical calculation.  Kahneman and Tversky showed that real people are far more subtle and ornery.  Here’s an experiment that illustrates Prospect Theory.  Take a roomful of subjects and divide them into two groups.  Ask one group to choose between these two alternatives: a sure gain of $500 and 50 percent chance of gaining $1,000.  Ask the other group to choose between these two alternatives: a sure loss of $500 and a 50% chance of losing $1,000.  These two trade-offs are very similar, and traditional economics predicts that the whether you’re contemplating a gain or a loss doesn’t make a difference: People make trade-offs based on a straightforward calculation of the relative outcome.  Some people prefer sure things and others prefer to take chances.  Whether the outcome is a gain or a loss doesn’t affect the mathematics and therefore shouldn’t affect the results.  This is traditional economics, and it’s called Utility Theory.  But Kahneman’s and Tversky’s experiments contradicted Utility Theory. When faced with a gain, about 85% of people chose the sure smaller gain over the risky larger gain.  But when faced with a loss, about 70% chose the risky larger loss over the sure smaller loss.  This experiment, repeated again and again by many researchers, across ages, genders, cultures and even species, rocked economics, yielded the same result.  Directly contradicting the traditional idea of “economic man,” Prospect Theory recognizes that people have subjective values for gains and losses.  We have evolved a cognitive bias: a pair of heuristics.  One, a sure gain is better than a chance at a greater gain, or “A bird in the hand is worth two in the bush.”  And two, a sure loss is worse than a chance at a greater loss, or “Run away and live to fight another day.”  Of course, these are not rigid rules.  Only a fool would take a sure $100 over a 50% chance at $1,000,000.  But all things being equal, we tend to be risk-adverse when it comes to gains and risk-seeking when it comes to losses.  This cognitive bias is so powerful that it can lead to logically inconsistent results.  Google the “Asian Disease Experiment” for an almost surreal example.  Describing the same policy choice in different ways–either as “200 lives saved out of 600″ or “400 lives lost out of 600″– yields wildly different risk reactions.  Evolutionarily, the bias makes sense.  It’s a better survival strategy to accept small gains rather than risk them for larger ones, and to risk larger losses rather than accept smaller losses.  Lions, for example, chase young or wounded wildebeests because the investment needed to kill them is lower.  Mature and healthy prey would probably be more nutritious, but there’s a risk of missing lunch entirely if it gets away.  And a small meal will tide the lion over until another day.  Getting through today is more important than the possibility of having food tomorrow.  Similarly, it is better to risk a larger loss than to accept a smaller loss.  Because animals tend to live on the razor’s edge between starvation and reproduction, any loss of food — whether small or large — can be equally bad.  Because both can result in death, and the best option is to risk everything for the chance at no loss at all.

How does Prospect Theory explain the difficulty of selling the prevention of a security breach?  It’s a choice between a small sure loss — the cost of the security product — and a large risky loss: for example, the results of an attack on one’s network.  Of course there’s a lot more to the sale.  The buyer has to be convinced that the product works, and he has to understand the threats against him and the risk that something bad will happen.  But all things being equal, buyers would rather take the chance that the attack won’t happen than suffer the sure loss that comes from purchasing the security product.  Security sellers know this, even if they don’t understand why, and are continually trying to frame their products in positive results.  That’s why you see slogans with the basic message, “We take care of security so you can focus on your business,” or carefully crafted ROI models that demonstrate how profitable a security purchase can be.  But these never seem to work.  Security is fundamentally a negative sell.  One solution is to stoke fear.  Fear is a primal emotion, far older than our ability to calculate trade-offs.  And when people are truly scared, they’re willing to do almost anything to make that feeling go away; lots of other psychological research supports that.  Any burglar alarm salesman will tell you that people buy only after they’ve been robbed, or after one of their neighbors has been robbed.  And the fears stoked by 9/11, and the politics surrounding 9/11, have fueled an entire industry devoted to counterterrorism.  When emotion takes over like that, people are much less likely to think rationally.  Though effective, fear mongering is not very ethical.  The better solution is not to sell security directly, but to include it as part of a more general product or service.  Your car comes with safety and security features built in; they’re not sold separately.  Same with your house.  And it should be the same with computers and networks.  Vendors need to build security into the products and services that customers actually want.  CIOs should include security as an integral part of everything they budget for.  Security shouldn’t be a separate policy for employees to follow but part of overall IT policy.  Security is inherently about avoiding a negative, so you can never ignore the cognitive bias embedded so deeply in the human brain.  But if you understand it, you have a better chance of overcoming it.

Reference : http://www.cio.com/article/367913/How_to_Sell_Security

Many of the emerging technologies that will be entering the market in 2033 are already known in some form in 2008, according to Gartner.  The industry analysts examined seven of these long-term innovations — dubbed “IT Grand Challenges” — and what IT leaders ought to be doing about them now, during presentations at the Gartner Emerging Trends Symposium/ITxpo 2008 in Las Vegas.  Gartner defines an IT Grand Challenge as a fundamental issue to be overcome within the field of IT whose resolutions will have broad and extremely beneficial economic, scientific or societal effects on all aspects of our lives.  Many of the innovations that will unfold during the next 25 years can be found today in research papers, patents, or are in a prototype in production.  These long-term innovations, taking place in five to 20 years, go beyond the range of the typical IT project portfolio planning cycle.  Gartner analysts said IT leaders must be more active in researching and identifying emerging technologies that will bring about benefits not realized today…..Gartner has identified seven IT Grand Challenges.  They include:

• Never having to manually recharge devices: Today, the ubiquity of portable computing and communications devices powered by battery means that many people would find it highly desirable to either have their batteries charged remotely or their devices powered by a remote source, bypassing the use of batteries altogether.  Despite more than 100 years of research since the invention of the Tesla Coil in the late nineteenth century, the most notable progress to date was achieved by the Massachusetts Institute of Technology (MIT) in July 2007 in their experiment to transfer nonradiative power.  By this measure, any commercial application of wireless powering still seems a long way off.
• Parallel Programming: Rather than simply creating faster single-core processors to perform tasks serially, another way to meet the constant demand for faster processor speed is to develop multiple, slower speed processors that perform tasks serially.  Simulations, modeling, entertainment and massive data mining would all benefit from advances in parallel computing.  However, a challenge with parallel computing is to create applications that fully exploit a “multi-core” architecture by dividing a problem into smaller individual problems addressed by individual processors.  To overcome this, key issues will need to be addressed, including effectively breaking up processes into specific sub-processes, determining which tasks can be handled simultaneously by multiple processes, scheduling tasks to be processed simultaneously and designing the architecture of the parallel processing environment.
• Non Tactile, Natural Computing Interface: The idea of interacting with computers without any mechanical interface has long been a desirable goal in computing.  Some of the many challenges that remain in this area include the ability to detect gestures, developing a gesture dictionary and the need for real-time processing.  Another set of challenges relate to natural language processing, which include speech synthesis, speech recognition, natural language understanding, natural language generation, machine translation and translating one natural language into another.
• Automated Speech Translation: Once the many hurdles of natural language processing are overcome to yield human-to-computer communications in one language, the complexity extends further when translation and output is required to a target language that is understandable to a human.  Some rudimentary systems have already been created to accomplish basic speech translation, such as one-way and two-way translations.
• Persistent and Reliable Long-Term Storage: Current technologies are hard-pressed to perfectly preserve Dr. Francine Berman’s 2006 estimate of 161 Exabytes (x10 to the 18th power) of digital information on digital media for more than 20 years.  The barriers to long-term archiving (in excess of 100 years) that must be overcome include format, hardware, software, metadata, information retrieval, just to mention a few.
• Increase Programmer Productivity 100-fold: As business and society’s demand for software development increases, and the apparent decline of students pursuing software engineering and computer science degrees intensifies, removing uncertainty from meeting future demands will have to be met by increasing the output, or productivity, per programmer.  While the exploration and development of tools to enhance productivity continues to capture attention, it would appear that effectively and efficiently exploiting reusable code is one of the most encouraging rays of hope to yield more output per programmer.  But many challenges exist there as well.  Minimizing the time required to find the perfect software module and avoiding the need to modify reusable software are among the many challenges.
• Identifying the Financial Consequences of IT Investing: One of the most perplexing challenges faced by IT leaders has been to convey the business value of IT in terms readily understandable by business executives.  As a discipline that conveys the business performance and results to internal executives and personnel only, management accounting could offer business advice and recommendations that would quantify the consequences of a particular IT deployment.  Unlike financial accounting measurements which are standard across public companies, the particular management accounting metrics could be different for each company.  This Grand Challenge would be considered conquered when a request for an IT project was argued with the following certainty: “If you invest in our IT proposal, you will see an additional $0.03 earnings per share directly attributable to this project by the third quarter of next year.”

Also check out : Gartner’s IT Trends Forecast For 2008

Reference : http://cio.tekrati.com/research/10234/

George W. Bush has famously described his leadership role as “the decider”.  But deciding how to decide is as important as making the final decision.  What should be the composition of the group the leader turns to?  What is the context of the decision?  How will information be communicated and how much control does the leader maintain over the decision?  A leader who gets any of these factors wrong may be decisive, but also decisively wrong.  The US president described his leadership style as having three core components: outline a vision, build a strong team and delegate much of the process to them.  His decision-making on Iraq, however, has been criticised for the grandiosity of his vision, failure to manage the divisions in his team and failure to monitor the delegation of decisions.  Without contextual intelligence, being a “decider” is not enough.  Understanding context is crucial to effective leadership.  Some situations call for autocratic decisions and some require the opposite.  There is an infinite variety of contexts in which leaders have to operate, but it is particularly important for leaders to understand culture, the distribution of power, followers’ needs and demands, time urgency and information flows.  Ronald Heifetz, the leadership theor­ist, argues that the first thing a leader needs to diagnose is whether the situation calls for technical and routine solutions or requires adaptive change.  In the former case, the leader may want to clarify roles and norms, restore order and quickly provide a solution.  In the latter case, the leader may want to let conflict emerge, challenge unproductive norms and roles and let the group feel external pressures so that it learns to master the adaptive challenge.  This may require delaying decisions.  Leaders are often tempted to decide quickly to reduce followers’ anxieties rather than to use these anxieties as a learning experience.  This is a very different image of leadership from simply being “the decider”.  General Electric prides itself on producing leaders, but half of its high-flyers who went on to become chief executives of other Fortune 500 companies had disappointing records.  Why do some leaders succeed in one context and fail in another?  A common answer is “horses for courses”: some run better on a dry track and some in mud.  Many a good CEO turns out to be a disappointment when appointed as a cabinet secretary.  Contextual intelligence is an intuitive skill that helps a leader align tactics with objectives to create smart strategies in new situations.  It implies a capability to discern trends in the face of complexity as well as adaptability in trying to shape events.  Bismarck once referred to this as the ability to intuit God’s movements in history and seize the hem of his garment as he sweeps by.  More prosaically, like surfers, leaders with contextual intelligence have the judgment to adjust to new waves and ride them to success.  Contextual intelligence allows leaders to adjust their style to the situation and their followers’ needs.  It enables them to create flows of information that “educate their hunches”.  It involves the broad political skill not only of sizing up group politics, but also of understanding the positions and strengths of various stakeholders so as to decide when and how to use trans­actional and inspirational skills.  It is the self-made part of luck.  In unstructured situations, it is often more difficult to ask the right questions than to get the right answer.  Leaders with contextual intelligence are skilled at providing meaning by defining the problem that a group confronts.  They understand the tension between the different values involved in an issue and how to balance the desirable with what is feasible.

Psychologists generally agree that multiple forms of intelligence exist.  What we today measure as IQ was originally developed a century ago in the context of the French school system.  Thus it focuses on linguistic, mathematical and spatial skills that tend to predict success in school, but not necessarily in life.  Contextual intelligence consists partly of analytic capabilities and partly of tacit knowledge built up from experience, which tends to be expressed in rules of thumb.  In some situations, such “street smarts” are much more important to success than “school smarts”.  But as Hillary Clinton and Barack Obama, the two Democratic presidential rivals, have recently debated, in novel situations judgment is more important than experience.  Contextual intelligence also requires emotional intelligence.  Without sensitivity to the needs of others, pure cognitive analysis and long experience may prove insufficient for effective leadership.  Ronald Reagan was often faulted on his cognitive skills, but he generally had good contextual intelligence.  Jimmy Carter had good cognitive skills, but was often faulted on his contextual intelligence.  As one wag put it, he was better at counting the trees than seeing the forest.  The best leaders are able to transfer their skills across contexts.  Dwight Eisenhower, for example, was successful both as a military leader and as a president.  Many leaders have a fixed repertoire of skills, which limit and condition their responses to new situations.  To use an information age metaphor, they need to develop broader bandwidth and tune carefully for different situations.  That set of skills is contextual intelligence.  Leaders need to learn it and, especially this year, voters need to judge it.

Reference : http://www.ft.com/cms/s/0/094b83ba-ff2b-11dc-b556-000077b07658.html

When Michael Gliedman first arrived at the headquarters of the National Basketball Association in 1999 to become its new chief information officer (CIO), he found a splintered information technology environment…..Gliedman’s first task as CIO was to focus on the supply side of the IT business equation: bringing equipment up to speed, making sure core technology services worked consistently and efficiently, and consolidating the league’s IT efforts under his authority — a process that took Gliedman about 18 months.  “There’s no way anybody in the business is going to take you seriously if it’s taking your guys 20 minutes to answer the help-desk phone,” he says.  “The culture around here is that you spend a lot of time listening and quietly fixing things in the background.  Then, after you’ve proven yourself, people will take you seriously enough to give you a seat at the table.”…..All the while, Gliedman has to make sure basic operations run smoothly to maintain the trust that he has earned throughout the league.  In short, Gliedman is the model 21st-century CIO.  These days he is training his focus on the demand side of the IT business equation, where the needs of the business are paramount, rather than spending most of his time on such typical supply-side concerns as cutting IT costs — although these responsibilities are still very important.  He has become a serious contributor to the league’s business results by harnessing powerful new technologies that make real-time information attractive and accessible both internally and to the NBA’s constituents and fans around the world.  That’s why he — like any other truly strategic CIO — needs to be among the inner circle of senior leadership.  Unless the information chief knows where the organization is going, he or she won’t know what capabilities will be strategically paramount.  A strategic CIO has much to offer the organization; with specialized knowledge of the capabilities, requirements, and costs of new technology, the CIO is uniquely positioned to help the organization set priorities that affect every one of its operations…..As operations and markets become more fragmented, there is an ever-greater need for IT to bind together a company and augment its collective intellect (to paraphrase computer interface pioneer Douglas Engelbart).  IT can be used to address problems of mounting complexity and to help an orga­nization move into new products, new processes, and new markets, at home and around the world.  New technologies are always changing how companies operate internally and how they look at their customers, suppliers, partners, sales channels, and markets.  In this context, it is up to the CIO to be a practical visionary: matching his or her organization’s tech-based capabilities to its current needs and to its future image of itself.  He or she must also understand whether and how to enhance and extend the organization’s IT capabilities.  And the most successful CIOs not only support the strategic direction of their organizations, but help set it.  In doing so, they will bring back one of the almost-forgotten aspects of the personal computer revolution of the 1980s: It made work more engaging by making people more powerful.  That shift turned out to have enormous strategic value…..The resulting boom in productivity in the developed world has yet to slacken…..The new CIO has an opportunity to change the way organizations adopt and use technology…..The range of Web 2.0 technologies — social networking software, video-sharing sites, multi-participant simulated environments, and creative exchanges — has sparked a level of excitement not seen since the early days of the Internet.  A new generation that has never lived without computers and pervasive telecommunications is entering the workforce with unprecedented levels of technological sophistication and expectations of free access and universal mobility.  Once again, we have a multiplicity of options, and an opportunity for the whole enterprise to think more strategically about its information choices and priorities, to build the capabilities needed to meet strategic goals, and to learn better practices every step along the way.

COMPETING DEMANDS

CIOs at large enterprises — whether commercial, governmental, or nonprofit — typically split their time be­tween business/strategy concerns and technological/operational concerns.  On the one hand, whether or not most CIOs have a seat at the executive table, they look to drive the growth and profitability of their company (or, in the case of nonprofits, achieve the mission; or, in the case of government organizations, support increasingly complex missions and programs), just like every other executive.  On the other hand, many CIOs play an internal service role.  The CIO must be sure that the trains run efficiently — that the organization’s many projects arrive on time and on budget, that its departments operate smoothly, and that the technology supporting the business works.  He or she must also ensure that key business processes run as effectively as possible across the enterprise, often enabled by the successful deployment of new systems and technologies.  In addition to these operational concerns, CIOs are subject to a whole range of other distractions and disruptions that include security threats (for instance, the theft of proprietary information or denial-of-service attacks that can shut down an enterprise’s Web site); compliance and regulatory concerns, which are increasing every year; and even environmental issues such as power usage.  Meanwhile, the CIO must synchronize activities with virtually every function in the corporation, including finance, given that IT is a major cost center at most companies, and procurement and acquisition, which is critical to ensuring that the right technology is bought at the right time for the right price.  And all this must be accomplished in the face of increasing difficulties in staffing the IT department and with constrained financial resources, given the reality of today’s business environment.  Unless operational concerns are managed adroitly, they can easily overwhelm the IT department and force CIOs into a reactive mode in which they spend all their time dealing with supply-side issues.  Alternatively, if they are doing their operational job well, CIOs may simply go unnoticed.  As critical as daily operations are, a CIO in an operations-only mode is unlikely to generate confidence among business-oriented colleagues looking for contributions to the enterprise’s ongoing strategic conversation.  How can CIOs boost corporate confidence in IT’s value?  It depends in large part on their ability to keep the IT function running efficiently.  It’s an issue of reputation and trust: If they can’t take care of their own specialty, how can top business executives expect them to function strategically?  These skills extend to the ability to manage many projects effectively.  Information technology is a highly project-oriented activity; large corporations often number their ongoing IT projects in the hundreds, if not the thousands.  The reputation of the CIO frequently rests on his or her ability to complete projects on time and on budget, demonstrate the value of every project by showing how it will contribute to the organization’s overall strategic goals, and develop measures that show how a particular technology effort has contributed to business performance or productivity…..In that way, IT, traditionally seen as a supplier of services on demand, has been transformed into a strategy-driven function, with the business now regularly saying, as Gliedman puts it, “We’re thinking about doing something next season, and we want your ideas on the best way to do it.”…..“It’s no longer a matter of the business saying, ‘This is what we want,’ and we take the orders,” he says.  “It’s now a much more collaborative effort.”

OPENNESS, INTELLIGENCE, INTEROPERABILITY

The cultural walls that have long separated the CIO from his or her business-oriented colleagues must be torn down, and that can happen only if the CIO can transform himself or herself into a true “chief of information,” not a chief of technology, or of the network, or of security.  The issue isn’t the bits and bytes that make up the technology in IT.  As strategy+business Contributing Editor Nicholas G. Carr argued in a notorious 2003 Harvard Business Review article titled “IT Doesn’t Matter,” information technology has be­come a commodity, and as such, it cannot be counted on by corporations to create a sustainable competitive advantage.  “What makes a resource truly strategic,” wrote Carr, “is not ubiquity but scarcity.”  Carr was right that the technology has become ubiquitous, but the talent and wisdom required to use it strategically — to successfully capture, analyze, and employ information to the greater end of profitability and growth — are all too scarce.  That’s why, in practice, the quality of the CIO — and of the IT staff — has proven to make a difference in competitiveness.  Now, however, the need for better, faster information on the business side and the requirement to optimize global business processes, combined with new technologies that can significantly increase the value of the information generated by the IT department, has created a golden opportunity for information chiefs to make an even greater strategic contribution.  First, the business side is demanding more open technologies — nonproprietary, open source, with open standards — that won’t slow the business down or trap it in outmoded, stolid ways of operating.  These include standardized, global “off-the-shelf” solutions, such as ERP (enterprise resource planning) and CRM (customer relationship management) packages, as well as low-cost, standardized IT infrastructure elements.  Second, enterprises are turning more frequently to a variety of “business intelligence” technologies with which they can analyze the supply chain and manufacturing, on one side, and markets and customers, on the other.  These technologies must have the ability to digest massive amounts of information, analyze it in ways that can aid the business side in both day-to-day operations and longer-term planning, and then provide those results on a real-time basis to everyone in the enterprise who can benefit from it…..Finally, the business units are looking to CIOs to provide technologies strong on interoperability.  They must work together seamlessly, allowing the enterprise maximum flexibility in how it uses the information it gathers and the ability to look at its information in new ways that can suggest new opportunities.  For the CIOs who step up to a more strategic role, success will depend in large part on having the ability to minimize the many operational, budgetary, and other distractions that typically trap them in the role of chief technician.  Strategic CIOs must also maintain a consistent focus on the core mission of their organization — its strategic goals and tactical plans.  Doing so demands that CIOs be able to clearly explain the role technology plays in boosting the long-term health of the organization.  This requires the abil­ity to knock down the cultural walls that have traditionally separated IT from the business side, at all levels of the organization — to ensure, for instance, that the company’s technology strategy is seamlessly incorporated into its overarching corporate strategy, and that those two are never separated.  The goal: to gain recognition as the organization’s lead information strategy planner and visionary.

MANAGING THE INFORMATION LIFE CYCLE

Strategic CIOs must stress the “I” in CIO, working with the business to make certain that information as a critical asset is optimized, and that the organization’s information management program, and the technology on which it depends, is not a hindrance to strategic and operational flexibility but rather an enabler on which the business can depend in its quest for competitive advantage.  To that end, strategic CIOs must manage the entire life cycle of information, from collection, to maintenance, to analysis and use.  And they must do so in a way that maximizes its value to the business side, by helping determine what kinds of information are most valuable in making decisions.  They must also learn to package that information in ways that will encourage its use by those who can most benefit by it.  That also means being able to measure the value of that information and its overall effect on the organization’s performance.  Given the degree to which IT has infiltrated every aspect of large enterprises, strategic CIOs must be able to speak a wide variety of corporate languages — operations, finance, manufacturing, marketing, sales — and to work with top executives, including the CEO, COO, and CFO; the heads of procurement and HR; and the leaders of individual business units.  That demands an unusually broad set of business and communi­cation skills, a combination not often associated with “techies.”  In all of these working relationships, strategic CIOs must play the role of technology visionary.  This involves working regularly with other executives to develop answers to a series of significant questions: What is the role of information technology in the organization, given its strategic goals?  What new technologies should the company be watching, and why?  Which computer systems might profitably link to suppliers and customers, and how might the boundaries be crossed effectively?  What might the company be able to do differently than it has done in the past?  What might it be able to do for the first time?  Answering these questions is primarily a leadership duty — the strategic CIO is in effect the “chief technology proselytizer” — but the organization will be successful only if those questions are asked and answered within the context of short-term and long-term success.  The history of IT is riddled with stories of visionary IT executives who couldn’t keep the corporate networks running efficiently or get the help-desk phones answered.  The true visionary CIO must work within an effective IT governance process that allows for experimentation in a controlled, business-oriented environment.  There is no place in the strategic CIO’s thinking for “technology for technology’s sake.”  Based on the experience of the NBA’s Michael Gliedman and others who have done well in the role, we have observed that certain guidelines enable CIOs to succeed as strategic leaders:

• …..demonstrate that IT could operate efficiently, that it could give people throughout the organization the tools and help they needed without being asked.
• …..Effective IT governance is critical to developing a smooth-running IT operation.  If the lines of authority and responsibility regarding spending, project approval, and strategic initiatives aren’t clear, no CIO can be strategic or successful.  The CIO will have no clear sense of where he or she stands, and no confidence regarding how to move ahead on projects critical to the success of the enterprise.
• Look ahead.  The strategic CIO is also, by definition, the CIO of the future.  As such, CIOs should study all the new technologies coming down the pipeline, whether or not they appear to be suited to the CIO’s company or industry.  CIOs need to take the time to think about their potential strategic value, not today, but five or 10 years from now.  And they should talk with their peers within the company about how such technologies might fit in with strategies they too are seeing down the road.  If CIOs aren’t keeping these emerging technologies on their radar, it is at their peril: They can bet there’s a competitor out there who is.

Reference : http://www.strategy-business.com/press/article/08106

…..Now a sprightly 67, the inventor of the token ring network has a commercial pilot’s licence, flies his own Hawker jet, takes an interest in cosmology and worries about down-to-earth matters such as corporate computing.  “There is too much technology for its own sake,” he grumbles.  “Too much doing things because they are possible.”  Mr Söderblom is the founder and chairman of the Compass consulting group, now in its 28th year, a position that has given him a unique overview of the problems and possibilities of information technology in many of the world’s largest companies…..”With IT, it was possible to offer services to the customer that were not possible before.  But having started, you needed to follow up so you needed more IT to deliver what IT had made possible in the first place.”  He believes there is a depressing theme running through the development of IT, from the earliest times to the present day.  Corporate management, he says, has always treated IT as a cost rather than as a value: “The whole focus was, we must control exploding IT costs, and that has not changed.”  The irony, he argues, is that IT has been unbelievably successful in managing unit costs, giving as an example the change in data centre costs per thousand-user central processing unit seconds for three of Compass’s earliest clients, Ericsson, Volvo and ABB. In 1980, the cost was about Skr500: in 2000 it was Skr1.  “There is no other human enterprise that has done this.  Over the past five years, unit costs have continued to fall, while total costs have continued to rise.  The reason for this discrepancy is that volumes are just going through the roof and the chief information officer can do nothing about this growth.  “The CIO is being blamed for the increase in costs.  The debate is just wrong and it’s the same debate that has been going on for the past 30 years.”  Mr Söderblom’s colourful career - “from the late 1970s to the middle of the 1990s I was in constant patent battles” - provides the raw materials for his contention that many debates are “just wrong”…..He worked for IBM where he was the product launch manager for the database management system IMS.  This was when IBM was in its heyday - “an absolutely fantastic place to work, with money to burn”.  Eventually, he left for the kind of consultancy work which would eventually lead to the formation of Compass, a company which places emphasis on mathematical modelling and operational metrics of an organisation’s activities.  Companies that have been advised by Compass over the years are on average 27% more efficient than new clients, it claims.

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Mr Söderblom explains why IT departments are blamed for rising costs: “The IT department has been given responsibility for transformation projects that it obviously could not deliver.  Because IT was involved, the IT department was given the responsibility.  But the IT department never had the organisational mandate to make the changes that the IT solution required.”  He argues that the big mistake was that the CIO took on that responsibility rather than saying: “No, it’s not my business.”  “You would not expect the human resources department to take responsibility for a transformational project.  Why should you expect the IT department to do so.  And ERP (enterprise resource planning software) has multiplied the problem manyfold, because it requires more change in the business process than traditional, home grown applications.  “It’s clear that corporate management now understands that something has to be done.  We think the first step is that IT has to invoice for its services in business terms.  That will focus corporate minds on what IT is actually doing.  “It doesn’t solve any problems but it focuses the mind to see the invoice not in cost per megabyte but cost per transaction, cost per widget, cost per whatever.  Corporate management has to take responsibility for such an integral part of the business.”  Perhaps it will…..

Reference : http://www.ft.com/cms/s/92d94ba6-24e4-11d8-81c6-08209b00dd01,id=080305000301,print=yes.html