CIOs Move to Boardroom

Business demands that it heads take an executive role.

It will take a combination of business savvy and technology to ensure the alignment of business with technology. That message, heard increasingly in computer rooms across the country, was loud and clear at the Society of Information Managements SIMposium conference, held recently in New York. Top-level IT executives at the conference, as elsewhere, were looking for answers to questions that will enable them to prove the strategic position of IT in their organizations.

The questions are deceptively simple. How can a CIO guarantee that technology leads—and doesnt follow—a company through tough economic times? How do you ensure the technology a company chooses promotes the enterprises success, not failure? And how should IT heads move from the computer room to the boardroom, to maintain ITs place at the table?

However, a survey from Computer Economics Inc., of Carlsbad, Calif., shows the answers are anything but simple. Twenty percent of the high-level IT managers polled by Computer Economics said IT and business strategies were not effectively aligned at their organizations.

IT managers are working to close the gap, though. In a SIM-sponsored survey of 300 senior IT leaders that was released at the conference, the successful alignment of business and IT was the top management concern. IT planning ranked as the second-most-important concern in the survey, while security and privacy issues ranked third.

Among priorities, business intelligence topped the list of what respondents deemed to be the most important new applications and technologies. (For eWEEK Labs in-depth look at several business intelligence packages, go to Enterprise application integration ranked third among must-have applications in the SIM survey.

Put another way, the ability to extract usable information from the raw data being generated by earlier technology investments is key to ITs ability to move from the computer room to the boardroom. However, this capability is still eluding a significant number of organizations.

Despite obstacles, CIOs are already in place in some companies boardrooms, and theyve gotten there by combining technology and business savvy. Organizations such as FedEx Corp., in Memphis, Tenn.; Mellon Bank Corp., in Pittsburgh; and AMP Ltd., of Sydney, Australia, have IT oversight committees in place. At FedEx, for example, the board of directors has four committees: audit, compensation, nomination and governance, and IT oversight.

The point of such a structure is for CIOs to engage in conversation with senior managers and the board of directors.

"Its a fait accompli, and its time for IT leadership to stop falling between the cracks," said Richard Nolan, a professor of technology management at Harvard Business School, in Cambridge, Mass., speaking at the SIM conference. "Exploiting information technology resources is the best game in town."

Nolan challenged CIOs, senior management and boards of directors to collaborate to successfully align IT with business and to develop effective and efficient uses of technology. Although most CEOs believe IT is strategic, he said, few will admit they know how to exploit technology to streamline their businesses.

One way CIOs can ensure they meet business needs is by adding to the corporate boards of directors an IT oversight committee that oversees major IT-related projects and technology decisions.

"CEOs can no longer say I leave IT to my geeks or to my technical guy because thats a dangerous situation," Nolan said. "As the organization moves from hard boundaries to permeable ones, emerging concepts are enabled by technology. CEOs and boards need to be accountable to ensure the proper mechanisms are in place to transform companies as we go forward in the next 40 years."

CIOs attending SIMposium agreed with Nolan. Mitchell Habib, CIO of GE Medical Systems, a unit of General Electric Co., said he consistently challenges his colleagues to think outside of the computer room.

"We work in the computer room and in the boardroom because we get paid to make the right decisions," said Habib, of Waukesha, Wis. "Getting there is not the destination; its only the beginning."

The SIMposium conference serves as a forum for high-level technologists to discuss business issues related to IT management and to identify industry best practices. SIM, founded by CIOs, has 30 chapters in the United States and more than 3,000 members.

Senior Writer Anne Chen can be reached at