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IT takes charge

As companies go global, what part does IT play in helping them transform? A recent Forrester forum takes the issue head-on, with war stories and how-tos from top IT execs.

If General Motors goes under, it won't be because of CIO Ralph Szygenda.

Since 1996, when Szygenda was recruited to re-haul the ailing car maker's IT systems, GM has transformed itself into a digitally networked business where cars can be designed, built and sold anywhere in the world. The company's IT silos were broken down and about 1,000 business information technologists were brought in -- including an elite corps of PIOs, or process information officers, with expertise in critical aspects of the car business, from product design to supply chain.

The IT redesign helped bring about many efficiencies. Three of the five most productive plants in North America today are GM plants. And money -- big money -- was saved. Today, GM spends $1 billion less on IT than it did in 1996, Szygenda said.

With a Rip Torn delivery and no-nonsense manner, Szygenda was among an impressive lineup assembled yesterday at the Forrester Research Executive Strategy Forum 2005 in Boston to talk about the role IT can -- and must -- play in a world where increasingly all business is global. The take-home message? IT has to intercalate itself throughout the company, taking charge of the way business is done at all levels. Rather than responding to the needs of business units, IT needs to push innovation. This leadership role is a sea change for most IT departments and requires CIOs with a hefty dose of courage.

"Sometimes you have to bet your career," Szygenda said.

Traditional IT departments built systems to fit the functions of the business, said Forrester analyst Bobby Cameron. Old school IT systems were local, reactive and viewed as cost centers. To become the "business-enabler" IT departments aspire to today, they must span the network and be viewed by the company as an engine for growth. And rather than just react, they must initiate innovations. Basic or "underwater" technology functions, such as storage, data centers and desktop, should be commoditized, so that CIOs can keep their heads "above water," Cameron said, and focus on more strategic issues.

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At Procter & Gamble, retired former CIO Stephen David said IT became a force in the product giant's business by focusing on information -- or as he put it, going from a small "i" and big "T" to It. With a background in sales and general management, David made sure IT helped the business compete at the "first and second moments of truth," company lingo for the moment the customer picks the product off the shelf and the moment he uses it. Product has to be in stock to make the first win, and outperform its competitors to keep customers coming back. The alignment of IT to the business is critical. "If you don't have that, you will fail," he said.

One way David ensured that IT understood Procter & Gamble's business objectives was to require his IT leadership team to run a business at the company, complete with profit and loss responsibility. Speaking in tongues was also forbidden. IT has to be demystified, David said, so CEOs will not be afraid to use it, but instead look to CIOs to solve problems. At Procter & Gamble now, IT is no longer seen as a function but a capability embedded in business units and as the vehicle that forces business change and innovation. Just as in the past, when sales or marketing or product development pushed Procter & Gamble to new heights, this is now the Age of IT at Procter & Gamble, he said. Like Szygenda at GM, David said these kinds of transformation don't come without a lot of push back from people who don't want to change.

David's and Szygenda's messages resonated with Dean Bilden, director of e-business development at Houston-based BJ Services Co., one of the big providers of pressure-pumping services for the oil industry. The $3.2 billion company does business in most of the world's major oil and gas regions.

Bilden, a geologist and 22-year veteran with the company, started managing the company's software development seven years ago, after he was brought in to fix a major IT application project that was built internally and didn't work. Now, as the company's liaison between business and IT, who reports directly to the company's CEO, Bilden is steering the company's IT transition from a U.S.-based system to a global network. About 90% of the IT operations are here, even though 40% of the business is overseas. His biggest challenge he said is getting local managers to give up control of IT.

But Bilden said he took heart from Proctor & Gamble's David, who told the audience: "A CIO's job is about vision and the courage to speak up."

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