1 Leadership Imperative
Get Back to Business
After all the compliance work, cost cutting, data center consolidation and effort to wrest the last drop of efficiency from IT systems, what is the No. 1 imperative for IT leaders in 2006?
Getting back to business, that's what.
The focus for IT leaders in midsized companies is shifting from the cost-saving mantra of the past few years to business-facing initiatives geared toward increasing capabilities and sales. Gartner Inc., for example, says IT spending in the U.S. will increase 5.5% in 2006, with major outlays on mobile devices and a renewed focus on applications. Forrester Research Inc. predicts a 6% increase overall, with growth of 10% to 12% in customer-facing applications.
But for many CIOs, back to business means more than spending. "After three years of cost cutting and making do, there is [a] growing realization that IT has become central to our ability to sell and service our customers and to differentiate ourselves from our competitors," says Mike Hugos, CIO of Network Services Co, a Chicago-area distribution firm. "Getting back to business for me means building consensus within the senior management team and the business units to do the IT projects we need to improve our supply chain service offerings."
Refocusing on "core business goals" is what CIO Rich De Brino plans to do at Compass Health, a behavioral health nonprofit based in Everett, Wash. "Let's make sure the business is healthy, profitable and stable in 2006 -- and to hell with the regulators," he says.
Cliff Bell, CIO at $87-million Phoenix Technologies, has a long to-do list. "We have a backlog of projects to drive revenue, increase productivity, etc. ... that we postponed to ensure SOX [Sarbanes-Oxley] compliance," Bell says. "We are spending a lot more time to improve channel systems, sales forecasting, lead generation and fulfillment systems."
In 2005, regulatory mandates such as SOX and the Health Insurance Portability and Accountability Act "usurped important resources and preciously scarce talent" at $750-million Oceaneering International Inc. in Houston, says IT Vice President Gregg Farris. But all eyes have been focused on the business "more than ever," Farris says. "Oceaneering has been running flat-out, pushing every employee and every piece of equipment to their max just to keep up with demand," he says. "To top things off, we've been implementing a new worldwide [system], which not only increases each staffer's work, it screws with their systems familiarity and ability to get their jobs done efficiently."
For Keystone Automotive in Pomona, Calif., getting back to business means renewed outreach from IT to business units at the $558-million auto parts distributor. "We need to enable the business to increase sales, provide optimum customer service and accelerate growth," says CIO Jesus Arriaga.
To that end, Arriaga and his team have developed an IT partner program that assigns staffers as liaisons to Keystone's most significant business units. There's also a field program portion for the general managers and locations scattered across the U.S. "We're calling it the C.A.R program, for 'customer action representative,'" Arriaga explains. "I took the auto concept here to develop a catchy phrase."
But if you're stumped and can't think of how to make 2006 better than 2005, here's a place to start: "Identify one high-impact initiative that will move your business forward," recommends Niel Nickolaisen, vice president of strategic planning at Headwaters Inc. in South Jordan, Utah, and our Business Mentor columnist (see "Business Mentor Seeing the Real Forest for the Trees"). "Say to yourself, 'In 2006, we get this done, no matter what.'"
Now that's a leadership imperative.
Steve Ulfelder was a senior features writer at CIO Decisions. To comment on this story, email email@example.com.
This was first published in December 2005