The CIO in the Age of Analytics: From Infrastructure to Insight

Author: Joseph Baird

I have been advising senior executives for much of the past twenty years.  Many of my clients have been Chief Information Officers and it has been remarkable to see this role change during this time.  In the pre-2000 period, IT was seen as a strategic advantage and the move towards the web gave the CIO a very important seat at the table.

But as the decade wore on,  and the globalization of IT occurred, the role became more about managing down costs, the stabilization of ERP and operational systems and the providing of infrastructure for a mobile workforce.  Cost containment and predictability ruled the day and the job was more about Infrastructure vs. Information.

The CIOs that thrived during this time period were skillful administrators, negotiators and technology generalists. Their backgrounds mostly were from within the IT organization or Finance.  This served companies very well in this period of stabilization and commoditization of core IT services.  As the famous Harvard Business Review article  proclaimed IT was perceived to no longer be strategic but rather a cost center that needed to be aggressively managed.

The role of the CIO became more about defending vs. attacking and many who assumed these leadership positions were not natural risk takers but risk managers.

And then the ground shifted…the age of the smart phone and tablet has ushered in a new wave of business models in which the consumer knows more than ever before about what, where and how they want to engage.  We are awash in Big Data Hype and the same HBR has now proclaimed….

Now these same CIOs are being asked to develop new consumer facing technologies and create solutions that can take advantage of Big Data.   But the skills and operating models necessary during a period of modest innovation and cost containment are not the same as required for the Age of Big Data.

The skills for data scientists, app developers and others may not only be hard to find but also are at a much higher price point.  This is creating challenges for CIOs who are far from comfortable taking the risk of these hires or the necessary experimentation and controlled failures.

I believe that multiple operating models are and will continue to emerge.  In the case where the current is not suited to extend his or her skill sets into the required areas, the role may be split. In other words, the traditional CIO may need to focus on infrastructure and senior management will need to hire a leader to drive the analytics initiatives forward.

CIOs should recognize that this model has a risk of driving the relative value down of the traditional role.  This model will likely occur where the CIO does not have a history of an operating role either in sales, product development or supply chain.

For those executives who want to make the leap to Chief Insight Officer, I offer a few words of advice.  First of all, recognize that the core skill gap is not technology but technical.  That is, emerging Big Data technologies are fairly easy to understand. The technical aspects of data mining, visualization and process optimization are not.  Spend more time understanding the appropriate use of techniques than you do on a specific technology or vendor. 

Further, successful analytical transformation is all about adding predictive or prescriptive insight to core business processes. As such, knowledge of these business processes is essential.  The CIO who partners with the business to build deep knowledge about the nature of the business will become essential. The ability to apply new technology and techniques to these processes is the holy grail.   The development of six sigma and other process mapping and optimization skills on your team should be a top priority.

Finally, get comfortable with the development of business cases that justify your investment in people and other resources.  Your success demands the formation of a A team who can deliver extraordinary results.  This will not be the low cost provider.  The Chief Insight Officer must confidently build investment cases to acquire this talent and deliver on the investment required.

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Who will drive your Big Data Bus? Executive leadership in a new age

Author: Joseph Baird

 

First let me start by stating my dislike of the ambiguity and hype of the term “Big Data”.  And by Big Data in the context of this writing is nothing to do with the overused Velocity, Variety, Volume and Veracity.

But it has everything to do with what we can now more easily know about the signals from the physical world and its systems as well as the interactions and behaviors of customers for a wide range of companies around the globe.

I have spent much of the past five years advising senior executives from the world’s largest retailers and media companies.  From an nascent awareness brought about by the work of Tom Davenport a few years ago to the screaming hype from today’s cover of Harvard Business Review, it is clearly on the top of mind for nearly every CEO, CFO and COO.

But there is also a disconcerting pattern of corporate behavior that has largely left many frustrated and entering the land of disenchantment.   Non-IT Executives, uncomfortable with asking “stupid” questions or appearing vulnerable, too often have pushed the Big Data opportunity back to the CIO or others in the IT organization.

Yet, if you view the problem as an opportunity to create new products, customer experiences or market opportunities, the decision may be a bit different.   Let’s say your Walmart and you are making a decision to launch a new group of groceries.  Or maybe you are General Motors bring the new electrical Leaf to market?  Maybe even State Farm Insurance deciding which products to bring into which markets?

Invariably, these companies would bring together engineers, market researchers, and designers under the leadership of a very senior business executive.  And ultimately, the decisions(after thorough analysis, prototype and experimentation) to launch product would make its way to desk of the CEO or maybe the Board of Directors.

So, when I am asked who should lead a company’s Big Data efforts, I invariably ask what is the business trying to achieve in the market?   If there is a real, clear vision of a new market opportunity, leadership must be driven by the executives in charge of the functional area or business unit and not the IT leadership.

While there is a clearly a supporting role to be played by the CIO,  the bus must be driven by the senior executive responsible for the business opportunity. And, those executives must take the time to get smart about the new raw materials that are available to create these Big Data products.

Henry Ford became a student of the automation of the assembly line.  Fred Smith at Fedex immersed himself in the new logistics technology that picked Memphis as the first hub.  They realized that even though it was a technology problem, ultimate ownership was taken by the business leader not the technician.

Be good to remember as you decide who is going to drive your Big Data bus….