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CIO priorities for 2005 run the gamut

The days of cost cutting may be over for CIOs, so the question now is: How will they handle growth? Ten CIOs weigh in with answers as diverse as their companies.

Ask a bunch of CIOs what their priorities are for 2005, and the answers likely will be as varied as the CIOs themselves.

Becky Blalock, CIO of energy firm Southern Company in Atlanta, plans to focus her 7% spending increase on security, Sarbanes-Oxley (SOX) remediation, lifecycle issues and the need to accommodate growing needs in storage and bandwidth.

Ann Franks, vice president of IT at Atlanta-based office supply firm Lanier Worldwide Inc., is in the middle of a major enterprise resource planning (ERP) implementation -- 50 modules with 200 people involved -- and a CRM initiative, so her attention and her budget are focused in those areas, as well as beefed up security.

Scott Hatfield, CIO of Atlanta-based Cox Communications Inc., also is finishing up an ERP implementation and will spend his "marginally more" funds on customer management systems, e-commerce and customer care technology. "We take 50 million calls per year, and we're adding customers," he said.

Storage firm Quantum Corp., in San Jose, Calif., recently acquired another company, so CIO Scott McIntyre's attention is focused on turning two IT systems into one. "We have huge integration issues, so business process alignment is critical," he said.

[2005] is more and more about hitting the mark and making sure the services are there.
Mark McDonald
Group Vice PresidentGartner Inc.

Delivering growth

All four executives are validating what Mark McDonald, a group vice president for Gartner Inc., said will be the over-arching CIO priority in 2005 -- delivering high quality IS services within business expectations but without an obsession with cost cutting.

"It's more and more about hitting the mark and making sure the services are there," he said. "It's more about better and faster than it is about cheaper."

McDonald bases his prediction on surveys the Stamford, Conn.-based research firm conducted with more than 2,000 CIOs worldwide.

The most radical change from this time last year could be transitioning from cost cutting mode (and saying "no" to all requests) to growth mode, and being able to handle the change more sensibly than IT folks did in the late 1990s. "Now is the time to deliver the growth you've been preparing for," McDonald said. "You have to be able to lead in an environment where you selectively have to say yes."

Growth -- remember that word? Companies that want to grow in 2005 will use IT to propel themselves ahead in their markets. "IT does matter to companies that want to grow," McDonald added.

Susan Wolff, CIO of NCH Healthcare Systems Inc., in Naples, Fla., can feel the pressure for her department to grow the business. "We're required more and more to compete for capital and to deliver value," she said. Same goes for Quantum's McIntyre, who ranked delivering the value of IT among his top priorities.

IT matters at Nashville, Tenn.-based Corrections Corporation of America, the largest for-profit prison company in the country. "I'm in transformation mode, not maintenance mode," said CIO John Pfeiffer. His department is growing and hiring in a more robust -- and more rational -- IT environment, he said. And like McDonald advised, Pfeiffer is more selective with his "yeses," particularly when it comes to hiring -- he's trying to recruit and retain the best people in a rebounding market.

"Everyone is smarter this time around and making better, smarter decisions," he said. "They're approaching the employee/employer relationship approach more sanely and maturely."

IT at Wal-Mart Stores Inc. has been delivering value for a long time, according to Dan Philips, vice president of operations, data warehousing, databases, large systems and communications information systems. "We just need to keep doing what we're doing," he said. But like Pfeiffer, he's looking for the right people to help keep the machine going.

"We're seeking a more diverse work force -- this includes minorities and women," he said. "We're concerned about the decline of women entering the IT field." Phillips wants to stretch out the recruiting venues and find and "grow" new leaders for the future.

Another top CIO priority for 2005, according to Gartner, is business intelligence, with a focus on quality of information put in the right place as opposed to quantity. "Most people have been disillusioned with bringing in as much data as possible," McDonald said. "Now they're making sure they're putting out the best possible information."

That's exactly what Abbe Mulders, CIO of Dow Corning Corp., in Midland, Mich., is looking to do next year. The silicone maker will implement an information delivery strategy with a focus on "delivering the right information to the right people at the right time," Mulders said. The plan includes a global rollout of an enterprise portal and integrating information on the manufacturing shop floor with business information.

Other high priorities McDonald singled out include infrastructure and security investments, as well as a spending mindset that's more focused on a "pay as you go" approach rather than investing ahead of results.

Everyone is smarter this time around and making better, smarter decisions.
John Pfeiffer
CIOCorrections Corp. of America

SOX and the CIO

Laurie Orlov, a vice president and principal at Cambridge, Mass.-based Forrester Research Inc., added a few more priorities to McDonald's list, including some usual suspects -- delivering and valuing the economics of IT, aligning with business processes ("Once IT organizations figure it out, the game changes dramatically," commented Wal-Mart's Phillips), deciding whom and what to keep prior to outsourcing, and dealing with the SOX.

For some CIOs and IT executives, SOX is no big deal from an investment standpoint. "It's not a budget line item for us and not a significant expense," Phillips said.

But for others, ongoing compliance with SOX is near the top of the 2005 "to-do" list.

Tsvi Gal, CIO of Warner Music Group Inc. in New York, counts it among his high priorities, as does Sandy Hofmann, CIO of Alpharetta, Ga.-based Mapics Inc. "SOX remediation leads the list over security," Hofmann said.

Dow Corning's Mulders concurred: "It's definitely one of our priorities for 2005." . She spent this year upgrading business process documentation to highlight the internal controls that are in place. In 2005, her department will focus on documenting and upgrading IT controls to reflect the Control Objectives for Information and related technology [COBIT] standard, she said.

Still, other CIOs think SOX compliance has strayed from the original intent of the law.

SOX has eaten up more time and money than CIOs were led to believe, according to CCA's Pfeiffer. "I'm not sure it's in the best interests of the stockholders," he said. "It's far bigger, requires far more money and is far more IT-oriented than I think we expected."

For Quantum's McIntyre, the uncertain nature of regulations and the possibility that they may change means SOX compliance is a mid-tier priority for him. But Gartner's McDonald thinks 2005 will be the year that CIOs will get a clearer picture of compliance as an overall core process going forward.

"People will figure out what's really required and set their budgets up or down," he said.

Other CIO priorities for 2005

Developing global applications and implementing global systems -- not one-country systems -- then enhancing them for all other countries -- Dan Phillips, Wal-Mart Stores Inc.

Prioritization at the task level and SLA management of business components. "True" utility computing via innovative joint ventures and other agreements with vendors. -- Tsvi Gal, Warner Music Group Inc.

Automating the business process and business process management, and running IT as a business unit that generates revenue. -- David Guzman, Owens & Minor Inc.

Leveraging sourcing capabilities both internally and externally to meet demand challenges for corporate geographic expansion and R&D activities around adaptive computing, which is the next technology wave to support. -- Abbe Mulders, Dow Corning Corp.

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