Executive Briefs: August 2001

Flying Blind?
by Gary Hamel

Gary Hamel, an e-business scholar whom the The Economist calls “the world’s reigning strategy guru,” urges CIOs in a conversation with CIO Insight Executive Editor Marcia Stepanek to think less about using technology to cut costs and more about how technology can be used to create new value for their companies. That’s because, in Hamel’s view, CIOs understand better than the marketing department what is possible with technology and how technology can ease customer frustrations. Even highly competitive companies can develop blind spots, particularly about their customers, and overly cost-conscious CIOs can contribute to that blindness. Hamel talks about how CIOs can correct their vision—by learning more about what customers want and how they use what they buy. CIOs, he says, also need to help their companies justify the prices they charge for the goods and services they sell.

Spies Like Us
by Skip Kaltenheuser and Keith Epstein

Competitive intelligence isn’t new. As far back as the 1970s, Boeing discovered that members of a Russian delegation were wearing crepe-soled shoes to one of its manufacturing plants so they could surreptitiously pick up metal shavings off the floor to determine which exotic metal alloys Boeing was using in its planes. But thanks to the Internet, with its low-cost reach and speed, nearly everybody’s spying now, from MCI to Burger King. Until recently, most corporate gumshoeing was being outsourced to spy companies with 007-sounding names, founded by ex-CIA and Mossad operatives. Now, though, corporate snooping is increasingly being conducted in-house, and for the first time, CIOs are being lured to the front lines of battle. The reason: All the juicy secrets glutting cyberspace these days won’t help companies a bit if they can’t build intelligent data-grabbing IT systems to harvest market intelligence. Writers Skip Kaltenheuser and Keith Epstein take a look at how CIOs are starting to join the CI effort at companies from Compaq Computer Corp. to NutraSweet, and show how they’re helping their firms not only tag, sort and prioritize key data, but also get it to the right people—for a payoff of millions.

The Readiness Gap
by Howard Baldwin

Before a CIO undertakes a project requiring significant change—a reorganization, an IT-enabled shift in corporate strategy, a new technology platform—it can be helpful to know whether his or her staff and management team is ready, willing and able to handle the change. That’s why many CIOs, consultants and academic experts advocate conducting a change-readiness assessment. According to veteran journalist Howard Baldwin, these assessments have become important in order to ensure that IT staffers aren’t overwhelmed by the pace of change and the large number of mission-critical initiatives they are asked to juggle. CIOs can learn about the resources, attitudes and skills of their teams through one-on-one interviews, surveys and focus groups. Human resource managers and even former employees should also be contacted to learn about the history of the organization and its culture.

The CIO Insight Study: Security
by Mike Perkowski and Terry A. Kirkpatrick

Judging from the results of the CIO Insight survey of more than 550 CIOs and senior IT executives, IT security is a study in contrasts. Respondents rated security an average of 8 on a 10-point scale of importance as both an IT and a business issue for their organizations. But they gave their senior business executives a sub-par average score of 4.5. And while 74 percent of CIOs said senior management seemed willing to change business practices to make their company more secure, 30 percent said those same executives later forced them, after receiving complaints, to cancel planned changes that would enhance security. The conclusion, in the view of Mike Perkowski, head of Ziff Davis Market Experts: CIOs aren’t instituting enough of the high-profile risk assessments and simulated security breaches that would increase awareness of the problem of IT security.

License Litigation
by Michael D. Scott

A landmark ruling affecting IT outsourcing arrangements was recently handed down in the Ninth Circuit Court of Appeals. In the case of Beckman Instruments, Inc. vs. Cincom Systems, Inc., the court held that a software licensee may violate its license by outsourcing. When Beckman Instruments outsourced its IT operations, it transferred a database management system from Cincom to the outsourcing services firm it hired. After Cincom objected to the transfer, Beckman sued the software vendor to obtain a declaration that the transfer of software to the outsourcing firm was legal. Michael Scott, an attorney with Perkins Coie LLP, who served as an expert for Cincom, analyzes the court’s decision.