IT leaders in business are facing a challenge that is forcing a fundamental change in the role they play in organizations.  A trend identified in late 1990s, that CIO’s couldn’t do it all - a successful solution is to recast the CIO to focus on business relationships and change management, while the CTO focuses on technology and future trends.

It happened at FedEx, New York Life, Kraft Foods, and The Disney Company, all created a Chief Technology Officer (CTO) position equal to the Chief Information Officer (CIO).  That leadership vision of the executive team brought structure to their businesses that were enhanced by the inclusion of an individual focused on technology implications.  Each of these companies has seen vast, rapid and unexpected changes in the business environment - all have excelled.  

Expanding the Business to e-business

The Next-Generation Enterprise (NGE) will be organizations that use the right mix of technologies, business structures, and processes to serve customers in Internet time. Ultimately, the NGE will become a fully integrated enterprise with applications linking seamlessly to the customer, partners, vendors and suppliers.  It will be about Internet time - where the fast and nimble will excel.

But the NGE will also be different in that not everyone will be an employee.  Increasingly businesses are using specialists for specific roles.  This expanding role of outsourcing in IT has also reached the knowledge worker.  The IT knowledge worker is in high demand, limited in supply and difficult to gage skills and experience to specific business needs.  The use of contract employee, brought in to fill a special need is becoming a common practice. 

New technology is being spawned every day and utilizing that technology gives the competitive edge in the rapid changes of the business environment.  Successful companies have discovered that by expanding the IT leadership with a technologist, a “virtual CTO” on an interim/follow up basis, they infuse the company with the synergy and fresh ideas that can put them at Internet speed for success. 

The concept of a virtual CTO will allow organizations that do not have the size or luxury of a full time CTO to make use of an individual contributing as a technology advisor.  The virtual CTO will become an objective voice in the executive decision-making process. This voice will become the facilitator and activator to bring consensus in decision-making.

As a facilitator the virtual CTO would work within an organization where the CIO has worked diligently at meeting the organizational needs in providing technology, cutting costs and maintaining the data processing systems.  A new technology has come into existence that enables the organization to better serve their customers, called Customer Relationship Management (CRM).  This is a recent software application that takes all customer touch points and integrates into a common platform all information about the customer.  Sales and marketing has determined that there is a real need for this software to maintain and expand the organizational competitive advantage in the marketplace.  The vendor has made an excellent sales pitch and the software is now perceived as a “must have” business need.  The CIO has difficulty with the product selected because of mismatch with other systems, platforms and skills available within the organization.

The virtual CTO works with the sales and marketing executives to better define the business requirements and identify how it will make the organization more competitive. Evaluations are made as how this requirement can be built that will truly give a distinctive competitive advantage, rather than duplicate what all other competitors are doing the in the market.  Based upon those business needs, the virtual CTO works with the CIO and IT department to define technological requirements to make for a successful implementation.  Based upon both needs, a bid and proposal cycle is created to find the best fit for both business units.  A project is defined upon proper budget analysis and return on investment analysis.

As an activator example is the virtual CTO works for several different organizations that are non-competitive. The exposure to different industries, different organizational cultures present the virtual CTO with fresh ideas and concepts.  Taking a concept from the aerospace industry, an Internet startup company restructured their R&D and engineering departments into a project, matrix organization that better met the divergent requirements placed by different customer groups. This led to more solutions fitting the needs of a larger customer base and expanded the revenue streams for the startup.

Recasting the IT department can create a powerful solution to building your business and your bottom line.

Michael Siersema is Chief Technology Officer and Founder of Phoenix 2000, a 15-year-old strategic technology consulting company focused on integrating technology with business. He has been programming for 39 years, with 23 years of business leadership experience.

http://www.phoenix2000group.com

BACK TO  Articles from The Business Forum Journal