CIOs at SIM: Why IT matters

Does IT matter? Now more than ever, according to IT executives who gathered in Boston this week to talk about technology as a real-world competitive advantage.

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BOSTON -- IT matters. And it's about to matter more than ever. That was the message Monday from Don Tapscott, founder of a Toronto-based think tank and keynote speaker at SIMposium Executive Summit 2005, a technology conference of IT executives sponsored by the Society for Information Management.

In a talk peppered with references to Karl Marx, Victor Hugo, Machiavelli and Tapscott's teenage son, Tapscott took on the argument now made infamous by another business guru, Nicholas Carr. According to Carr, IT no longer represents a competitive advantage for business. Because everybody's got information technology, Carr said, IT has become a commodity and should be procured as cheaply as possible.

"I've debated Nick half a dozen times and he's a very smart and articulate guy. But I have a big advantage in these debates, which is that he's wrong," Tapscott told hundreds of IT executives who attended the conference keynote.

Tapscott argued that IT has never been about the hardware and software used to process and transport information in digital form. "Who cares about a bunch of boxes and wires? It's all about the information -- stupid!" he said.

Far from being a cost-sucking, brain-dead commodity, Tapscott argued, IT is the driver that will allow companies to embrace a number of historic changes in the business world, including the baby boomlet's "no fear" approach to technology and the public's demand for corporate transparency.

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IT is anything but a commodity at The Chubb Group, said James Knight, the CIO in charge of claims for the New Jersey-based insurance company. "IT is very strategic for our company. You talk about the value of information. With Hurricane Katrina, we cover a lot of places, we know where we have to get and we know really where we have exposure. Without that data, we couldn't do that," Knight said.

Brian Irvine, vice president, information technology director, for MBank, a small $250 million bank in Gresham, Ore., also heard Tapscott's SIMposium keynote. "My bosses see IT as critical and fortunately they view it as the way we will differentiate ourselves for our competitors," Irvine said. "Banking itself is a commodity, and one way you differentiate yourself is by offering value and trust to your customers," Irvine said.

The bank recently invested about $120,000 moving to a collocation facility operated by SunGuard. The project took about six months. "This is about promising business continuity. We were in a situation where one drunk driver … or one earthquake … and basically we're out of business. We made a huge investment to move all our mission-critical stuff to a facility about 20 miles away. We went from almost no protection to rock-solid protection," Irvine said. The IT initiative has become part of the bank's marketing appeal.

"When our loan officers are talking to customers, they're saying, 'Hey, look we're not Bank of America and we're not trying to be. But we still offer the kind of protection and services and business continuity that you're going to find at the big banks,'" Irvine said.

Lego gets a lock on IT

Companies that have embraced a new paradigm, whereby IT is a business tool, have learned to harness the genius of their customers to create value, Tapscott said. He cited Lego as a company that understands how to "co-create value." Lego Mindstorms allows kids to build robots. But kids could also hack into the software. "Lego had a choice. It could be like the music industry and decide to sue children, or it could open up. They published all the specs and now they have thousands of software engineers between the ages of 60 and four years old, who are building Mindstorm applications," Tapscott said.

The old model for business was closed, keeping information close. Tapscott said businesses that embrace the new paradigm tap the open market place for ideas, using sites like Yet2.com, or by taking advantage of aggregated information through tools like Innocentive, where 70,000 scientists can be tapped to solve a problem. "Innovation is opening up through business Webs," he said.

"The question you should be asking is how you can infuse your products with knowledge that will make you a market leader," Tapscott said. "This is not about technology, when all is said and done. Technology enables new business designs."

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