If you envision the CIO of five years from now, what is that person doing? How much power will that person have in the business? First of all, I don't think there's one general CIO role, so I don't think you can draw one broad generalization of either what CIOs are doing today or five years from now. So I think in some companies, the CIO role will more or less disappear, and the IT management function will largely become a procurement...
and maintenance function. In other companies, the CIO will be a very important, very central executive on the executive team. And [at] other companies, the CIO will be in essence a project manager who is very effective at scoping out and running very complex projects.
I think companies need to gear their IT manager role to what their IT needs are. I think we will see, in general, a move of CIOs to become less of innovators and visionaries and more of very strong managers who can take this complex resource and have it deliver what companies need at a low price and with high reliability.
I'm not sure about ones who have evolved over time into very different roles. I think the CIO of Verizon, Shaygan Kheradpir, provides a good model of a very strong executive, but one who's really taken a hard-headed approach to IT and -- by capitalizing on what I see as the commoditization trend of IT -- has really driven down the cost of IT for his company. I think the IT budget for Verizon went down from 6% of revenues -- which is the telecommunications industry average -- to just 4% during his tenure, and I don't think anyone would say Verizon is less savvy or getting less IT capabilities than it used to. More and more, that will be the model going forward. To capitalize on commoditization is to capitalize on the new options that are emerging for IT buyers and to drive down the cost and risk while getting more. So along that line, do you think that's what CIOs should do to remain relevant? Should they take the hard-headed business approach instead of the tech approach?
I do. I think it's really now a matter of being a good manager and looking at the trends and IT capabilities. Figuring out where you need to be on the IT sophistication curve -- whether you need to be way out on the cutting edge or whether you can back away toward a cheaper, more generic solution. Focus on cost management, risk management and the capabilities your company needs with the reliability and the low cost that will itself distinguish you from perhaps less frugal competitors. It seems like most of the IT management conferences over the last year focus on three areas -- compliance issues, outsourcing and aligning IT with business. Do you think these issues should be the focus of IT? If not, what should be?
I certainly think they are going to be three of the main issues going forward. I think IT/business alignment has been a perennial issue, so that's nothing new. Compliance is a very big, immediate issue for IT people and outsourcing … yes. To me, outsourcing is one component of a broader trend in having more options in how you buy or source your IT capabilities and even the processes that run on top of your IT platform. I think there might be a danger in looking at outsourcing in isolation, but I think it will continue to be an important area for learning and sharing best practices, doing all the things you do at conferences. Tell us a little bit more about your new book, Does IT matter?.
[It] focuses on issues of IT management -- what's the best approach to managing IT -- and quite a bit of the book expands on those themes, but I try to go a little bit further in the book in looking at how the rise of this new IT infrastructure affects other corporate decisions beyond IT management -- things like organization and strategy and how you manage and think about processes and partnerships. I think that the IT infrastructure itself -- by automating and standardizing many processes -- raises a whole slew of new challenges for companies beyond IT management itself. So I tried to look at some of those questions a little more deeply.
Click here to read the first part of the interview, where Carr clarifies his theory and talks about why it may have been misinterpreted.