Technology in transition

Bruce Springsteen once said that he writes so many songs about cars because he likes to sing about people in transition. Will his next album feature a song called "CIOs Were Born to Run"? Not likely. But it's clear that the role of technology is in a state of transition or, as Springsteen might say, it's chrome-wheeled, fuel injected and stepping out over the line.

But which line exactly? Two alternatives -- or questions, really -- come to mind. In the age of tight IT budgets and increased outsourcing, will CIOs be more or less empowered to shape their own corporate destinies? Also, in the age of strict ROI and commoditized solutions, will IT become a cost center or an engine for building corporate value and competitive advantage?

As recently as 1997, at the height of the economic boom, answers to these questions were clear. CIOs and other technology executives controlled an estimated 68 percent of worldwide IT spending. Their place in the corporate hierarchy was at its zenith. But it didn't last. By 2000, the power of influence was trending the other way and the amount of IT spending controlled by the CIO and other technology executives fell to 57 percent.

In 2004, according to estimates compiled by IBM, the trend will achieve a reversal, and CIOs and other IT executives will only control about 40 percent of worldwide IT spending. (For a comprehensive analysis see "Multiplying Business Value: The Fusion of Business and Technology" by Frank F. Britt, vice president consumer packaged goods for IBM Global Services Americas at www-1.ibm.com/services/ whitepapers/fusion.html.)

So, does the rise of IT influence among business-unit executives diminish the role of CIOs and tech departments in the corporate ecosystem? No, but it changes the rules. As business units drive their own IT solutions, CIOs will become chief integration officers and be held responsible for building inter-enterprise links. They will also become managers of the big IT picture (plus all the details) charged with prioritizing the corporate technology portfolio, resolving conflicts and discovering synergies.

But mostly, they will promote fusing of technology and core business strategy. CIOs have always done this, but they've frequently worked in parallel with business units from a completed business plan. In the future, alignment will mean inseparable linkage and equal-share ownership. Acceleration, as always, will also be major factor, so sit tight and take hold on thunder road.