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Only 'Knuckleheads' Think IT Isn't a Differentiator

By Allan Alter  |  Posted 11-06-2007 Print
Two Gartner strategists say IT and CIOs haven't been this important since the dot-com boom.

Is IT becoming less important? No way: Technology hasn't been this strategic since the dot-com boom of the 1990s. That's what some of Gartner's top analysts told us when we went beyond the formal presentations at October's Gartner Symposium/IT Expo and met individually to discuss immediate and long-term IT priorities, the strategic role of IT and whether the CIO function will survive. Following are edited versions of our conversations with Mark McDonald and Dale Kutnick, group vice president and senior vice president, respectively, of Gartner Executive Programs, the division that works most closely with CIOs.

CIO Insight: What items top your list of CIO priorities?
Mark McDonald: Growth is a challenge. Business leaders are expecting IT to provide some sort of competitive difference in support of that growth. That's leading CIOs to concentrate on projects to promote growth. Improving the skills of their people is another top priority: Skills are the single biggest inhibitor of IT effectiveness. CIOs are working in an expanded environment. Traditionally, CIOs have worked with technology. About two years ago we started to see CIOs get involved in technology and process. Now, in the leading organizations we work with, we're starting to see CIOs involved in four things: technology, process, information/ analytics and customers.

Haven't CIOs been involved in these areas for a long time?
By starting, I mean the IT skills and capabilities are now either a positive contributing or a negative limiting factor on a company's ability to grow. That's coming in part from three major trends: First, the penetration of IT into core processes is largely complete.

Now that these processes are automated and infomated, businesses are going on to the next round of benefits. Executives are telling CIOs, I'm glad you automated it, now go on and do something new with it. Another significant trend is, for companies to grow, they have to be different in a way that matters to the customer. That's driving a whole new way of business process and information transformation built around changing the way organizations work. The last trend driving this together is that the value of information as a component of product and services is rising dramatically. So with all those things, for the first time in seven years, IT effectiveness is a major factor in the CEO's success. The last time IT effectiveness was a major factor was back in the dot-com days.

Is this a break from the past?
For highly effective organizations, it is. Going into 2008, too many organizations have an IT strategy that is generic. It's not differentiated for the company, for the industry, etc. We've been comparing CIOs' top initiatives for the year; there's about 80 percent overlap on average. The list includes network and ERP upgrades and business intelligence and security projects. From a business perspective, saying that my IT function is basically pursuing the same strategy as other companies' IT functions creates no competitive advantage. And that's what's accelerating this thing. Once an IT organization establishes a consistent track record for delivery and credibility, there's an explosion of expectations around processes, information and customers and an expectation that IT will no longer follow a me-too strategy.


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