Published November 15, 1999

Business Information Technology Management Questions

Thomas Trainer, CIO for pharmaceutical giant Eli Lilly, recently told a business audience that "If I were the CEO of your company, there are five tough questions that I would be asking about my chief information officer and the activities of the I.T. function." Today we'll look at the first part of those, and next week we'll examine the rest.

Question 1: Is it more important to hire a CIO who has technical skills or one who can relate to senior management and understand the dynamics of this enterprise?

Trainer rephrases the question this way: "If the future of my business depends on using information technology to enable business strategy, is it more important to hire a CIO who has technical skills or one who can relate to senior management and understand the dynamics of this enterprise?" This shows his view on the matter: Hire someone with less technical knowledge who can organize the department and relate to other senior management "as a colleague."

Speaking as a career I.T. hand himself, Trainer says the ideal is to find a bright, technically brilliant prospect in your firm who's adept at rising the corporate ladder. But admittedly, not every promising I.T. professional will want the responsibility, or even recognize the career opportunity of being a true business partner. This is because, after all, "you first get noticed in the I.T. field by demonstrating technical skills to technical managers," Trainer says.

Failing this ideal situation, however, Trainer advises that "if you can't find a career I.T. professional in your company with sufficiently broad management and communications skills, you may be better off appointing a CIO from some other career path within your corporation." Why? "A CIO who is not an organizational leader and who can't relate to senior management as a colleague is not going to get the job done, no matter how deep his technical knowledge."

Question 2: How much should you spend on I.T. and on what should it be spent?

The best way to solve this is to have the CIO at the table when corporate strategy is developed in the first place, and have "a systematized approach for focusing I.T. spending on those projects which add the most value in support of the enterprise strategy," Trainer says. Otherwise, "I can guarantee that you will be spending too much -- if only because a sizable percentage will be spent on the wrong things." If this persists, he says, two things will result: There is virtually zero chance that you will realize the economies of scale and informational synergies that your business deserves and probably needs; and "your systems will not gracefully link with each other -- not just because of hardware and software incompatibilities, but also because data gathered in one part of the business will most likely be in a format that inhibits the use of the same information in other parts of your business."

Nothing of greatness, he says, "neither civilizations nor cities, businesses nor I.T. departments, can be built and sustained without standards, infrastructure and architecture. When I arrived at Lilly, I inherited 17 disconnected I.T. organizations. These people were trying to support 11 e-mail systems, 15 telecom networks, 27 hardware platforms, 51 different types of PCs -- and no data standards. It's a miracle I still have my sanity."

Question 3: How should senior management measure I.T.'s value?

How well the I.T. organization meets budget commitments is important, of course," he says. "But effectiveness and value are far more important measures than only meeting absolute spending targets." Sometimes value will be defined financially, either by return on investment or economic value added. Trainer urges firms to look at a different measurement of value -- by the customers. Are they satisfied? Do the metrics support this? Do metrics exist?

Other ways to think of I.T's value: Is I.T. performing as an enabler, to help the business respond to a constantly changing environment? Are solutions to business needs being delivered while they are still relevant? "Readily available solutions that provide 80 percent of what the business needs today are better than a perfect solution which can't be delivered until after the problem goes away," he says.