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Thu, Mar 6, 2008 17:22 EST

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Posted by: Laurie M. Orlov in Best Practices Topic: IT Organization ManagementBlog: Reinventing IT
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American CIOs, says Accenture Chief Technology Strategist Bob Suh, have become followers rather than leaders. But I wonder if this analysis is flawed.
Here's what he said when he did an analysis of a survey of more than 500 global CIOs that Accenture conducted late last year.” Only 6 percent of American CIOs surveyed responded that they wanted to be leaders in adopting new technologies vs. 15 percent among European and 19 percent among Chinese IT leaders. But 54 percent of American CIOs said they would rather be followers in adopting technology, compared with 44 percent in Europe and 27 percent in China."
He then went on to relate this to weakening US productivity:
"Between 2001 and 2005, employee growth outpaced the rise in revenue and profit among S&P 500 companies. By comparison, the S&P European 350 companies have kept revenue and profit growth above employee growth. In China, productivity growth is more than triple the U.S. and European rates", He then concluded: "It’s not too late for U.S. companies to regain their leadership in productivity by investing in new technologies rather than window-dressing legacy systems. As with stock portfolios, cutting your losses and redeploying the capital to fresh investments is often a better strategy than thinking the stock owes you a return.”
Hmm. Since when does 'adopting new technologies' equate to halting the window-dressing of legacy systems'? Instead, perhaps the responders interpreted 'emerging' to mean adding new technologies to the enterprise arsenal, for example, Wikis and other unstructured content, Second Life recruiting, instant messaging and group conferencing, smarter phones, better search, new Google-ized mapping applications, predictive modeling about customers, RFID, embedded sensors, or robotics (varying in relevance by industry and current business strategy and opportunities).
If they didn't interpret the question as meaning they were going to replace a legacy app, but rather, do they want to be first in their firms to uncover or recommend a technology that could, perhaps, help boost the firm's productivity with one or more of the above, then this study confirms what we already suspect. The driver seat in technology is increasingly going to be in the business units, not in IT. Which means that technologies will be discovered and eventually thrown over to IT to support, with CIOs becoming involved at the implementation stage, as IT did at Kimberly-Clark with its Innovation Studio project.
I can already hear the sob story about how American IT organizations are too busy, too short on people, too mired in cost cutting, too tied up in Sarbanes-Oxley compliance, or whatever. But when we wonder about what CEOs want from CIOs, maybe it is time to ask what the CEO needs and maybe hasn't asked about. American firms need a CIO who shows leadership in the adoption of emerging technologies that might jump-start a new revenue stream and customer loyalty.
I was disturbed by the interpretation of the survey data, with no offense intended to Bob Suh or Laurie.
On the comparison to China:
The US IT market has a 20 or 30-year lead on IT-maturity over China - not superiority, but experience in the industry. As a comparative newcome, of course China will outspend the west on new technology - China has far less legacy in place, (hence most purchases are new) and is growing in ways the west can't. CIOs (wherever they reside) should not try to keep pace with China's spending, nor covet the title of / "top techology spender".
On the assumption that new equates to better:
IT has had ample opportunities over the years to realize that new is new, better is better, but new isn't necessarily better, and better isn't necessarily new. I take it as good news that the focus of CIOs is in this study not on retaining the top position in technology spend. CIOs, I suspect are focused on the business, and leveraging all that they already own to serve the needs of the business. When technology fails (to deliver business value) CIOs should replace it. As Laurie suggests - CIOs should spend money on Wikis, Web 2.0 and other new technology that will increase business. However, advice to toss it all away and buy new isn't realistic for many firms. Comments that impli that US CIOs must regain the "top technology spender" mantle is simply not responsible.
What should drive IT spending behavior?
If the survey intends to serve the interests of businesses and CIOs, the ensuing advice would stress balance - replace what you must, reuse what you can, but make sure it all works together to the best interests of the business - not technology vendors' balance sheets.
Laurie
For a potential reason why American CIOs may be right, it's worth looking at what some Silicon Valley Venture Capitalists and computer-industry executives now consider to be 'emerging technologies'.
I'd recommend anyone exploring the question you've raised to read an article entitled "From Geeks to Greens" (February 28th, www.economist.com). Its subtitle paints the picture: "Executives are switching in their droves from the computer industry to clean technology firms".
Now, one article is not cast-iron evidence of a trend, but this one presents a scenario that it's worth every CIO considering.
If what primarily contitutes 'emerging technologies' - which for a long time has been IT - is now shifting to environmental technologies, what does that mean for the corporate strategy that the CIO is leading, and the role of CIO itself?
IT is undoubtedly the backbone of commerce, so it's not about to lost its strategic value and importance. I also agree with your observation that the on-the-ground energy for exploiting IT to create value is increasingly coming from the people who use it, not the IT specialists.
However, IT may have to increasingly share the limelight - and investment - with a new kid on the block in terms of what constitutes 'emerging technologies'.
The article I've referred to explores whether those computer executives making the switch to environmental technologies have what it takes to succeed. Good question, to which only time will provide an answer...
Chris
Too much spent in keep the lights on dollars, including plenty with Accenture.
Here's my challenge to Accenture to free up more money for innovation
http://dealarchitect.typepad.com/deal_architect/2008/03/my-challenge-to.html
Software as it currently exists is quite literally on its way out and a lot of enterprise media has not quite caught on to that fact yet.
New tools that allow enterprise applications to be built without a programmer in a tiny fraction of the time a programmer would take are becoming more and more common. Although Enterprise Mash ups have caught some attention lately they offer limited results and don't even begin to scratch the surface of the kinds of returns that you can get from a platform like Iceberg for example.
We are seeing CIOs build their own applications in less time than it would take them to explain what they need to their IT department.
The major jump here is making these browser based no-code application platforms available INSIDE the enterprise so that they can be run on their own server behind the firewall. This is something that Iceberg does as a key feature and users can use it for teams of up to 5 people totally free.