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Tuesday, 19 October 2010 15:09

Complexity catapaults CIOs to box seat

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The burden of complexity which most large enterprise CEOs now face is catapaulting CIOs into the box seat as far as their ability to become both valued adviser and trusted service provider is concerned.

Earlier this year IBM released its Global CEO study, the fourth in a series of biennial reports, examining the key issues exercising the leaders of large enterprises. Today the company released a report Capitalising on Complexity, which examines the implications of that Global CEO study for chief information officers.

One of the overarching factors is that technology is recognised as a valuable asset by CEOs. In 2004 when the first survey was conducted 'technological factors' was only the sixth in a list of external factors identified as having an impact on large enterprises. Today that has shot into second position, lagging only market factors.

According to Matt English, IBM strategy and change leader, most CEOs identified increased volatility, uncertainty, complexity and a structurally different marketplace as being issues that would have to be faced in the future. Of the Australian CEOs surveyed 84 per cent said they expected increased future complexity, but only 39 per cent felt properly equipped to deal with that.

For CIOs, who are increasingly expected to provide the tools to manage much of the complexity, there is still a way to go.

But as Paul Williams, CIO of Campbell Arnott noted, 'Technology can't make anything simpler. It can only automate a process which has been made simpler.' Williams stressed that at its core Campbell Arnott 'makes soup and biscuits' which on the face of it wasn't a complex issue.

However making soup and biscuits for a global parent, in a fiercely competed marketplace was complex, and IT had a role to play.

'Big organisations have created internal complexity almost wilfully. We (in IT) need to get back in our box and do things flawlessly,' said Mr Williams.


IBM's report found that among the most successful global enterprises three common traits were demonstrated; they had become creative leaders, reinvented customer relationships and built operating dexterity. Both Mr Williams and IBM's own CIO Steve Godbee today provided examples of how these traits might manifest at the launch of the report in Sydney today.

To demonstrate creative leadership Mr Williams for example explained how following the conclusion of an SAP R3 rollout, Campbell Arnott put all staff through a training course to explain how the computer systems were used to optimise performance and productivity. Dubbed A day in the life of a Tim Tam, the programme was able to track every step in the production of the iconic chocolate biscuit and show the impact of even minor changes.

Creative leadership did not extend to offloading IT responsibilities to the business however.

On that Mr Williams was firm; 'Skunkworks are an admission of failure if they are happening on a regular basis,' especially if they led to the emergence of uncontrollable legacy that ultimately fell to IT to manage. Instead he argued it was important for IT departments to become nimbler and be able to respond to business requests faster which would reduce the need for the business to look outside the enterprise for alternative solutions.

When it came to reinventing customer relationships Mr Godbee stressed the importance of analytics. He provided the example of IBM's Blue Insight programme which is based on a Cognos platform and provides single point of access to IBM's 100 plus international data warehouses.

It was in the area of operational dexterity that Mr English believed there was particular opportunity for CIOs by simplifying where possible, managing complexity, enabling speed of operation and embracing global IT trends.

For Mr Godbee that behoved CIOs to ensure that there was a robust and efficient IT infrastructure available to the enterprise, whether home grown, or bought on a software as a service (cloud) basis. The computer giant regularly runs major infrastructure refresh programmes, for example in recent years it has completed an overhaul of its data network, has moved to a VoiP platform, is about to conclude a wireless network overhaul and will next embark on an Ethernet gigabit-to-the-desk refresh as part of a global programme.

As the IBM report notes as complexity continues to mount and volatility is accepted as a way of life for large enterprises; 'CIOs will need to act as both strategy collaborators and technology managers to help CEOs more effectively get a handle on complexity.'


 

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