Should the CIO Embrace Moore's Law? - Page 2

Oct 30, 2007

Steve O'Connor

Were I to return to the corporate world today, I'd create a GM for every application or service IT delivers and make that person responsible for everything related to it, including profitability and successful business use. This approach forces IT to do the math—an area where software vendors are already experts. For example, vendors build quality assurance into product engineering because better quality correlates with fewer support requirements and reduced costs. Short changing this equation only leads to higher post-sales costs, whether the solution is delivered by a vendor or an internal IT team.

Optimize the Supply Chain

If corporate IT embraces the principles behind Moore’s Law—which I believe is increasingly likely—the relationships they have with IT vendors and service vendors will be fundamentally altered. The entire semi conductor industry supply chain, for example, has reconfigured itself around meeting customer demand and innovating rapidly. Companies are partnering in ways that would have been unthinkable even a decade ago. Brand owners are including their contract manufacturers in new product discussions, and the manufacturers are driving execution across multiple organizations.

In the context of corporate IT and vendor relationships, turning the tables will be both exceedingly productive and disruptive. Instead of being invited to sit on customer advisory boards, perhaps corporate IT should give key vendors a seat at the table during strategy sessions, in much the same way that a contract manufacturer might be early participants in new product design sessions.

Or, instead of one vendor delivering a single product or service, applying Moore’s Law means that corporate IT should push vendors to orchestrate success across a network of players. Many vendors are currently building “ecosystems” but right now, this is really a fancy name for partnerships that define points of integration between complimentary products.

While electronics companies choose contract manufacturers based on their ability to quickly and cooperatively deliver innovation, could a new class of IT vendor step up to the plate? Not to be a systems integrator on steroids, but to be an innovation hub. This means collaboration across vendor boundaries, and if done up front, it can foster Corporate IT innovation that keeps pace with Moore's Law.

Move On

Success is about more than measuring speeds and feeds or up time. Technology vendors pop a cork on the day that a new release goes GA, but the next day they put the glasses away and begin all over again. In the corporate IT world, the same should apply.

For example, the new CRM solution is up and running, but that's not the end of story. IT must think ahead about how about potential improvements and that requires real-world metrics. Are the lower-case “c" customers happy? What's the data, anecdotal or otherwise? What has it cost to deliver the solution in terms of network components, training, and support? Can IT go back to the economic buyer with evidence that money was well spent?

Regardless of the results, if IT is on top of the situation it can more effectively manage expectations. Having the answers to these questions is what enables IT to base its discussions with business unit managers on business value, rather than overhead. It can also shift the basis on which bonuses are awarded from projects completed to customer satisfaction.

Mindset is key in successfully "running IT like a business." IT vendors compete for business on price, functionality, and service while corporate IT organizations enjoy a monopoly. If the professionals running them adopted a commercial IT business point of view, the average tenure of a CIO or IT manager would lengthen, the perception of IT's value across the organization would rise, and the IT environment itself would be profoundly impacted. Steve O'Conner is the founder and SVP of ITM Software, an IT business management solutions provider. Previously, Steve was CIO of companies such as Silicon Graphics.

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