The CIO Reinvented

By Mike Scheuerman

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IT is dead. Long live IT. Makes an interesting headline doesn’t it? In a world where software is becoming a subscription and no longer a licensed product what’s a CIO to do?

Just think about it: no more annual upgrades, no more juggling staff to get around to every machine to maintain the applications and no more midnight upgrades. What a life of ease! I wish. Now the real job begins; figuring out how to get the business processes delivering more value faster.

This describes the job of the CIO over the next few years: building a whole new way of delivering technology-enabled business processes that are at least as integrated and seamless as the ones we use today. And, as with all change, it has to be managed carefully.

The CIO, who today worries about application vendor licensing and having enough infrastructure to support all those applications in the future, will be thinking about what tidbit of software can be subscribed to that will fill a particular niche in the business process scheme.

There are a lot of terms being thrown around that try to describe this phenomenon: SOA, BPM, SaS, Web 2.0, etc. Yet each of them only describes one particular aspect of this elephant.

When you back up a little and look at the big picture, it becomes a much different kind of problem. The transition from licensed applications to software-as-service will be a rough road, just like the one from mainframe to PC to networked systems.

The majority of the vendors, who are there for you today, will not make the leap over this chasm. Many new ones will develop on the other side to take their place. The CIO (a.k.a. Business Technology Officer) will have to gain more insight into the company’s business processes and strategy, a greater understanding of the service levels needed, and a better way to perform vendor due diligence investigations.

As a CIO, you’re no longer in charge of technology, but rather of ensuring that everyone in the company can get their job done. The technology has become ubiquitous and as such no one notices that it’s there until it’s gone. The competitive edge is not in the technology but the application of the technology in innovative, cost-effective ways.

A deep understanding of the company’s business goals and strategy is required. You have to work with your business colleagues to develop a vision and plan of how all of the pieces of the puzzle will fit together to form a cohesive, reliable, seamless business technology infrastructure.

Moreover, you have to be able to communicate that vision and plan to everyone including the executive staff, the vendors who provide the services and ultimately, to the shareholders and customers. There are a lot of new skills that need to be acquired and polished to get through this transition. The technology industry is beginning to recognize that the basic building blocks of all businesses are essentially the same. They are starting to build applications that can be securely shared by hundreds if not thousands of users.

The new data centers that are being built by the likes of Google, Microsoft, and Yahoo and others will become the repository of the business processes and data for hundreds of companies. The CIO in this world is not a technology guru but a businessperson with the problem solving skills to find, deploy and manage the right combination of subscriptions.

The transition from licensed to subscription won’t take place overnight. It’s a like planning a moon shot. There are lots of little tests with successes and failures before you actually go for the moon. The CIO will be pressed to determine when the time is right for his organization to begin migrating to this new paradigm.

There are a couple of indicators that might help to point out when the time has arrived. What are the unique attributes of the company’s offerings? Draw a circle around the technologies and processes that provide competitive advantage and determine what role technology plays in making them unique.

If you can do this then you’ll know that everything outside the circle is probably a commodity and can be gotten from someone else whose expertise is far greater than yours. Why not let them do what they do well and focus your attention on the technology that provides distinctiveness?

The hardest part is understanding how to separate your business processes into distinct pieces. To adapt, CIOs must think like a manufacturing engineer: What are the components that make up the business process engine? Who can you source those pieces from?

Building up the parts lists from vendors you can rely on to deliver a quality product will be challenging and only slightly different from the job the CIO does today. However, that slight difference is going to have an enormous impact down the road. Just like a one-degree adjustment in flight path would make the difference between hitting and missing the moon.

Mike Scheuerman is a partner at B2B CFO CIO, LLC, a nationwide network of partners that specialize in providing CFO, CIO and senior level executive services to growing companies. Mike has more than 25 years experience in strategic business planning and implementation.