Finding a Balance

By Erik Sherman  |  Posted 07-19-2002 Print Email

Finding a Balance

Still, there are some IT experts who worry that too much business-side input into technology strategy isn't good, either—and worry that the devolution trend at some companies could be bad news for those firms in the long run. Getting more disciplined about technology is great, says Jerry Luftman, an information systems and alignment professor at Stevens Institute of Technology. "But it would be a mistake to diminish the role of the CIO, because IT is not going to go away. When the economy turns, you want the CIO to be investing in opportunities—and overseeing tech investments—in order to assure the best impact for the business."

Giga's Enderle agrees. Line managers, he says, don't often have the financial or technical background needed to take over IT decision-making. "They may be expert in the business, but they have not received the breadth of training to make the financial decisions they're being asked to make about technology, affecting the entire company, so they can often make bad ones," he says. Further, Enderle says, CIOs have a bird's-eye view of the company that few others do. Regardless of outsourcing trends, he says, many CIOs are in a great position to assert themselves as the key technology strategist liaison between third-party outsourcers and the corporate boardroom.

Indeed, some CEOs are upgrading the job of the CIO so as to foster greater cooperation between IT and the business. At Safeco Corp., a Seattle-based insurance company, president and CEO Mike McGavick hired former IT consultant Yom Senegor to serve as both CIO and director of strategic planning. "I wanted someone who understood our business challenges and how technology could solve them, " McGavick says.

Still, though, not all CIOs are up to the task. Though the number of super-CIOs has grown, they are still in short supply—making it critical for some companies, Enderle says, to train corporate technologists in the ways of business strategy. "I would say that it's probably only about 35 percent [of CIOs] who have stepped up into this strategy role and have the skills to do it," says Joe Eckroth, the super-CIO at Mattel Inc. "I think for some CIOs, it's too late because of their own volition. They never stepped out from the back to the front, and maybe they never wanted to." That sends a message to CIOs who want staying power: Boost your input, your skills and strategic vision—or perish.

Still skeptical? Ask KI CEO Resch. When manufacturing and salespeople come to him now, he says, "I tell them that we've spent X million dollars on this, and I want to see the benefit before we spend another cent." So far, he says, it's working. "All of a sudden, the staff finds they can implement it, find the benefits, cut back on people and improve on quality," Resch says.

Could he have done this sooner? Sure, says Resch. "CEOs are also to blame for some of the technology waste," he says. "People ok'd the systems and then walked away." But now, nobody cares who's to blame. "Now it's time in the evolution of this Internet thing to stop the big talk and make it all work," he says. "It's payback time."

Erik Sherman covers technology for a variety of publications, including Newsweek and Computerworld. Russ Banham and Debra D'Agostino contributed to this story. Please send comments to


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