Why is IT in the CEO's spotlight?
Number one, it's the internet and e-commerce, stupid. Number two, the focus of IT effort and opportunity is switching from the back office (accounting, enterprise resource planning) to the front office (customer interaction).
So the technology is becoming the business model and the customer experience. If you're a non-techie CEO, you can't hide from technology any more - and you need 100% confidence that your IT director is on top of their game.
Is this a big shift in organisational role and power?
Absolutely. 'Go and talk to IT' used to send shivers through any snappily dressed young turk in marketing or sales - conjuring up airless basements, full of pale drones running data entry tests under mountains of green printout.
At the executive board level, you used to be able to survive for years without spending time with the IT director or bumping into the IT department. (As a strategy consultant in the early 1980s, I could make it all the way through to the detailed implementation phase before I had to go and see the IT guys.)
This world is no more. IT is central, sexy and high-profile. Those young turks in marketing are all on geek-speak. The IT director (reborn as the CTO) is a fully paid-up member of the executive board and the strat-brats come and see him/her in their first week on the project.
How are IT directors and their teams responding to this change?
Some are stepping up to their new seat at the top table - but many are struggling to escape a legacy straitjacket, an old model of IT thinking.
The legacy IT model was centred on large-scale, multi-year deployments and maintenance of 'mission-critical' back-office systems: initially, accounting, then supply-chain and ERP. The technical environment is different today (open versus closed systems, new architectures and languages). But the bigger challenge is the difference in business environment and behaviour.
What are the key differences in the new IT model?
You play the CEO, and I'll be your IT director. Right, I need rapid, concrete progress in modest, bite-sized chunks. You can't afford to take six to 12 months to define my user needs, 18 to 24 months to deploy a system, then 12 months for the first upgrade.
I can't articulate my real needs up front; in three years, the whole business will have changed, and I now expect painless monthly upgrades like I get over the internet from AOL or McAfee. Timeframes have to be compressed. Deploy something quickly, then evolve it rapidly, based on how it actually gets used.
Second, make it usable and user-friendly - not just for a small group of SAP-trained experts in finance who've spent six months in Waldorf, but for the mass of managers and staff who deliver customer interaction, business analysis, management reporting or marketing campaigns.
The old command-and-control IT mentality was OK when it was about getting baked beans from the Heinz factory to the Safeway shelf, but now IT has come out of the closet. I'm used to Excel and Powerpoint - dump on Microsoft all you want, at least even I can use their stuff from day one.
Is that all you want? I'm tired already.
No, there's more. Third, make it e-centric. The internet allows me to combine information with communication - that's why I'm suddenly getting real productivity gains across my entire employee base, after years of investing billions in the black hole of back-office IT for little visible return.
Last, make it flexible. Don't lock me in to long-term commitments that aren't able to change as fast as the business. My pricing strategy can't be set in stone because it'll take two years to rewrite the billing system.
And I don't see why I should care whether we remain a pure, 100% Unix/Oracle/ SAP/ whatever shop, or whether we do our IT in-house or out-source it.
I want speed-to-market, best-of-breed applications and the ability to change direction like a speedboat, not an oil tanker.
It was very peaceful in the IT basement. Can't I just sneak back in there?
Not an option, I'm afraid. You're now representing 50% to 60% of my capital investment, every year. You're the key to leveraging my customer assets and my human capital.
Come to think of it, I'm depending on you for the value of my stock options. Are you sweating now?