Small Firm CEOs Think IT is Key

By Allen Bernard

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A recent study from Forrester looking at the view CEOs held of IT at companies with more than $100 million or so in revenues found that while CEO are generally satisfied with IT's performance, they did not view it as integral in three key areas: innovation, process improvement and asset management.

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But, in contrast to the study, the three small-firm CEOs interviewed for this article all agree that technology is the primary enabler to the future success of their firms. Forrester's research found that of the CEOs of firms with less than 1,000 employees, most reported "lower than average expectations" of IT as a contributor to the firm's success.

Overall, what came across is IT is performing well in supporting the business and, in many cases, the CIO is part of the strategic planning committee the 71 firms Forrester surveyed — 59% of CEOs were satisfied with the day-to-day support IT provided. Twenty-seven percent were "neutral," and just 14% were unhappy.

Interestingly, the factor making the most difference wasn't a measurable metric like up-time, it was communication. If the CEO felt the CIO was a good communicator, then he or she was happier with IT's overall performance.

What was being communicated wasn't studied so it could be the boss and the CIO both share common interests like baseball or cars, said Laurie Orlov, a former CIO and now a principal analyst looking at CIO and IT management issues, and this could skew the survey's results, but, most likely, they were talking about IT.

Small Dose of Reality

At Parker Finch, a Phoenix, Ariz.-based homeowner's association management company, however, the story is quite different. The company is depending on technology for it expansion and business model.

Run by CEO James Small, a former Accenture IT management consultant, Parker Finch uses hosted applications to support is franchises thus leap-frogging competitors who, in the words of Small, are "technology laggards."

"I definitely don't think of IT as a necessary evil," said Small. "I think of it as a key enabler of our business and, without it, we don't have the business."

Because of the Internet and software-as-a-service, the company can support it's 100%-plus-per-year expansion without having to field an "army" of IT guys flying all over the country to set up and support client-server-based satellite offices.

While the company is small today (just 40 total employees, including franchise owners, in the Southwest and Florida), homeowner association management is a $10 billion-dollar industry in the U.S. alone. Without technology it would take years and years to make a dent in this market, said Small. With technology, the sky is the limit.

"If you talk about IT in general — Does it enable our business? Does it make us more competitive? Does it differentiate us? Yes, yes, and yes, said Small.

"I'd argue in the coming years (my competitors are) going to wake up and have more people like me that didn't come from this industry say, 'Guess what we have all this stuff that differentiates us from you, who have been here for 15-or-20 years and now you're real far behind."

This view is also held by Brian Drum, CEO of Drum Associates, a small, Manhattan-based executive search firm. Like Small, Drum is using technology to field remote workers and expand his business without expanding his physical footprint — an expensive proposition in Manhattan.

"The technical has given us the ability to do that," said Drum. "We'd rather expand virtually than physically."

Right now, he has people working remotely in North Carolina, New Jersey and Thailand. "(Technology) manages my business better but it also helps me innovate things. Now we can do many more things quicker, more intelligently because we have better technology to do it with."

Also bucking the results of the Forrester study is CEO Eb Moore of Coldwell Banker Howard Perry and Walston, a Raleigh, N.C.-based real estate agency with 13 offices and over $3 billion in sales.

For Moore, technology is not only fascinating, it is essential to reaching his customers since 84% of all home-buyers today start their search online.

"Do we depend on it for our success?," said Moore. "The answer is absolutely."

While the primary technology is email and Internet marketing, Moore also sees the advances in mobile technology as critical to his agents doing more, more effectively; especially if they could work as insurance adjusters do, from their cars.

When thinking about technology, Moore includes Blackberries, cell phones, laptops, GPS, printers and, one day, computer terminals built right into his agent's cars, as a whole. To him, IT just one big business enabler.

"For us, we've just realized its going to be a way of doing business for the rest of our business lives," mused Moore. "And quite honestly, it's one exciting journey."

While this may not be the view shared by his bigger-business brethren, it does seem clear that small businesses are excited by the capabilities technology provides and are looking to technology to move their business forward in ways that only a few short years ago would have been unthinkable.

Forrester's Orlov agrees. Now is not the time to be pushing IT off to the side, it is the time to embrace it, shake it, and see what it can do — regardless of your company's size.

"(Technology) may be better in the future but right now it's as good as it gets," she said. "So, now is not the time for a hunkered-down, risk-adverse IT any more than it is for a technology ignorant CEO."