CIOs need to lead business change

A few years ago, everyone was talking about the importance of IT, and how horribly unjust it was that IT professionals were usually overlooked for places on the board.

The solution, we all agreed, was for IT professionals to understand the business better. Well, that won't work anymore.

The killer objection to the argument that 'chief information officers deserve to be on the board if they understand the business' is that most IT doesn't create business value.

It's just something that's necessary, like buildings and desks. That's partly why you can outsource it.

Okay, I'm exaggerating. Most technology (although by no means all of it) probably did add value when it was first used. Properly handled as part of business change, IT implementation can transform an organisation and help to change its fortunes.

But the competitive advantage from technology erodes quickly, if only because competitors can adopt the same technology.

Even cutting-edge IT eventually becomes a commodity that's taken for granted, like buildings and office furniture. It has very different properties at different stages of its lifecycle.

There are two very different types of IT. One is a dull commodity to be managed, the other an exciting but dangerous tool for change.

This was always the case, but we used to lump the two together. No longer. Businesses now consider them to be different worlds, to be treated very differently.

The horrible truth is that IT is only important when it changes the business fundamentally. Therefore, you are only important when you change your organisation.

As soon as you stop turning your business upside-down, you and the technology you implement become mere commodities - essentially, just another cost. And from being part of the solution, you become part of the problem.

Sure, you can still cut costs by rationalisation. But so can the guy who buys the desks, and the other guy who signs the leases on your buildings. Are they on the board?

It's not surprising, then, that chief information officers (CIOs) are losing their influence. Consultants and systems integrators will tell you they hardly sell to CIOs any more.

Last month, I met Cap Gemini Ernst & Young's top technology gurus. They showed me a truly frightening PowerPoint slide (aren't all consultants' PowerPoint slides frightening?) showing the value-creating technologies they sell - and to whom.

You guys hardly made an appearance: it was all chief executive, marketing director and finance director.

As the business focuses more on creating value, you're falling off the radar screen. Businesses will listen to - and reward - people who make a difference. Even super-efficient management of a relatively stable infrastructure won't make much long-term difference to an organisation.

To be a real CIO, you have to capable of leading disruptive change, not just enabling it. That means focusing on business processes and value creation, not on technology. And it also means being prepared to initiate conflict and take the consequent flak.

Take Maggie Miller, IT chief at Sainsbury's, who was headhunted to push through a £1.8bn IT programme, probably the biggest of its kind in Europe. She considers being an 'organisational irritant' part of the job.

Do you think she calls herself a CIO? Like hell. She is Sainsbury's 'business transformation director (CIO)', and that's the way it should be.

Look out. CIOs in future will increasingly be recruited from among business unit managers and, indeed, management consultancies (such as Richard Granger, the revolutionary NHS technology boss).

Yes, Maggie Miller worked her way up through IT, but she's a smart business thinker with an MBA to her name.

To paraphrase Karl Marx, CIOs have only interpreted the business. The point, however, is to change it.

Douglas Hayward is an analyst at researcher and consultancy Ovum.

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