An article in The Wall Street Journal this week highlights how one CEO learned the hard way to take IT more seriously.
Before Hyundai Capital chief executive Ted Chung got word early this spring that a hacker was holding his company's confidential data for ransom, he didn't think the IT department was any more important than other corporate functions. The South Korean consumer finance firm's leader told the WSJ that he kept IT at arm's length, only realizing after the hack that he needed to be directly involved in its policies and procedures.
Chang has joined a growing trend of CEOs grasping the importance of being committed to IT, 110 percent.
"No CEO is that stupid not to pay attention [to IT]," Chung told the paper. "But maybe they paid the same attention I did, which is increasing the budget, giving encouragement but then saying, What the hell do I know about programming? That's the wrong support... Spend your time to understand IT..."
Now, Chung's IT department reports directly to him, and he's involved in setting policies that help it run more effectively -- such as agreeing to lengthen response time on a company Website if that's what's required for better security, or reconsidering the need for a new Website that may expose the company to a fresh vulnerability.
Chung's story is not unique. A recent IBM survey report on CIOs notes the growing importance of enterprise technology leadership, as embodied in the role of the CIO: "CIOs are moving closer to the locus of power in their
organizations. Therefore, it should not come as a surprise that there is a stronger alignment in the thinking of CEOs and CIOs."
In its report on a survey of over 3,000 CIOs worldwide, IBM refers to the CEO/CIO relationship as one of "shared executive agendas."
Nothing new here; for years, analysts have stressed the importance of aligning IT with the most vital organizational strategies. They've railed about the risks of not doing this. And much space has been devoted to educating CIOs and other tech leaders about how to communicate with the top brass.
Yet apparently, a gap remains between CEOs and IT that can lead to problems. Sometimes, it's only after a crisis occurs, as it did at Hyundai Capital, that consciousness is raised and priorities adjusted.
Organizational experts continue to work at closing the CEO/IT gap, especially as the importance of "big data" and online activity grows. In a column in The Wall Street Journal in April 2011, Jeanne W. Ross and Peter Weill of the MIT Sloan Center for Information Systems Research asserted the importance of a closer bond between IT and top management:
In a digital economy, IT is the foundation for doing business... companies of all types are discovering that how they manage IT is crucial to their competitiveness... This doesn't mean that top executives should review every IT investment proposal and decision. But it does mean that senior management must define how the company as a whole will do business in a digital economy. It means they must lead the IT initiatives that cut across all business lines. And it means they must resolve issues that local interests cannot resolve—like what data and processes will be standardized companywide.
Unfortunately, too many CEOs and other top executives often don't even know where to begin when it comes to managing IT.
If you're concerned about closing the gap between CEOs and IT, join us here for a live chat about this topic on Monday, June 27, at 1:00 p.m. ET.
As the person who covers the executive perspective on this site, I can honestly say that CEOs need to be painfully reminded that all parts of a business are important.
CEOs and IT management should always be on the same page. However, I'm not shocked that the WSJ story revealed this:
"Chung has spent weeks learning the ins and outs of network architecture, security infrastructure and the tradeoffs between data protection and customer satisfaction."
Whereas in the early days, technology companies were run by the engineers themselves: Intel, HP, VMware, Apple, Microsoft, etc... too often companies these days (and not just technology ones) are run by former sales or midmanagement types who know about the bottom line but not the shop floor.
The sheer number of executive-level attendees at UBM events like Cloud Connect or Enterprise 2.0 is indication that much still needs to be learned about the structure of the Internet and the fast-paced changes that impact both the corner office and the server room.
It was a similar IBM CEO survey, the reprot found midmarket CIOs are on the same page as their CEOs. This might be because sub-Fortune 500 companies have fewer layers of business than larger ones.
That said, shame on any executive who dismisses IT as a secondary player in an enterprise strategy. They should be one of the foundations of your company.
IMHO (FWIW) the CEO needs to know how hackers attack systems. He needs this information so that he doesn't get sold a used car by his CIO or CSO, -- or auditor.
this may be the most critical security issue on the table today.
what data paths are available to attackers?
how is each path protected?
what methods are attackers using today?
what protection do we have against each such attack?
don't just pull out a wad of boiler-plate and throw it at the CSO. get involved.
I agree that C-level execs need to know the busines from the ground up and that they need to keep up on trends.
I love to talk with executives who have a realistic engagement into how the technologies work. That helps keep vendors from spouting off broad terms to describe complex concepts (like the cloud).
It's often said that managing techies is like herding cats.
Now with the shift to the Cloud, it becomes ever more difficult to get your arms around not only the workers, but the platform! Where is it, if there is no data center to go to and yell at the head of MIS (oh, yes, sorry, "I T").
The thing is the C-levels could be right! The most important business of a business is sales. Getting and selling a customer is really the only thing that matters...however, as the computer replaces the human as the interrelationship with the company (see Obama's speech on tellers yesterday) then the computer interface, security and performance suddenly is the business itself!
So, is the best President of Ford an engineer? They tried that in 1991 and it only lasted a year or so. In the same way, while a great Operations gal can make the machines hum, putting the sizzle on is still the job of the deal makers. Quite frankly, if they can bring in the revenue, I'm not sure if it matters whether they know an iPhone from a telephone pole.
In the WSJ article, CEO Ted Chung noted that a lot of security decisions affecting IT require approval and/or policies from the CEO -- such as trading off faster response time for better protection.
To each his own. I think all functions need to be considered for the entire enterprise "machine" to work. But IT may just have to be considered a bit more than it has been in some places.
I am buffled that there still exists a gap between IT and CEO, this was an issue discussed in my MIS course in the mid to late nineties and gaining momentum in the early part of this century.
I would have expected that given the strategic advantage of IT to companies the world over, CEO (at least in advanced economies) would understand the stakes. I am astonished that it is not only CEO in developing countries that seem not to get it.
Such an interesting subject matter Mary. Theres something we would say at a past job of mine: Always be nice to the nerds. (And by "nerds" i mean the quiet geniuses who keep us all afloat) I have come across so many people in my career who have no respect for IT. This includes everyone from the working bees to upper management. I recall observing a corporate cafeteria where a few publicist types were eating lunch and you could just tell how superior they thought they were to the table of IT guys next to them. It was somewhat reminiscent of a high school cafeteria. Little did they know, when layoffs happened, it was their jobs that were on the cutting block, not the lowly IT guys…
So yeah, this article definitely resonated with me. Its funny to see the IT guys assert their power, even for nefarious reasons.
Another thing that your article made me think of was the idea of contracted IT professionals. Its something i've never understood.
The nature of my career calls for a lot of freelancing, which means I've seen the inner workings of many professional environments from small companies to corporations. And something I've seen consistent throughout is oursourced or contracted IT. These days, a lot of companies contract employees through an agency, especially in media, because of no reason other than it being cheaper. Which is what I assume to be the leading reason why IT professionals are often outsources in these environments as well.
Outsourced positions at companies inevitably have high turnover. So I cant help but wonder how a smooth running IT department can function with many of its key positions being revolving doors of contractor after contractor. Doesn't this make an organization open to all sorts of trouble? Theres the obvious security threats that can come from this, but so many more that I, as a Video Producer, wouldn't even begin to comprehend.
I suppose its situations like this that bring the IT department closer to the CEO's corner office...which I honestly believe isn't a bad thing.
hey Abdlah, it seems to be a case by case basis. Younger companies obviously know better. The dinosaurs...well, they will learn the hard way. if not today, then eventually.
The ThinkerNet does not reflect the views of TechWeb. The ThinkerNet is an informal means of communication to members and visitors of the Internet Evolution site. Individual authors are chosen by Internet Evolution to blog. Neither Internet Evolution nor TechWeb assume responsibility for comments, claims, or opinions made by authors and ThinkerNet bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose.
Facebook and Twitter are great for posting cat pictures. But are people really using social media for life-changing communications? Like, if a hurricane comes by and blows down their house?
In a standout presentation at the Jefferies 2013 Global Technology, Media & Telecom Conference in New York this week, the UK government talked about becoming a "very intelligent client."
A consumer business would have to be crazy or desperate to change call-center software in December, the peak of the holiday season. But that was exactly Positec's position.
To help enterprises deploy software faster for mobile, social, big-data, and cloud applications, IBM this week acquired development tools vendor UrbanCode.
Internet Explorer seems like a relic of the 90s, like parachute pants and Friends. But that's just me. I'm a Chrome guy, and before that I used Firefox.
Cisco's rumored sale of Linksys suggests we may have problem with innovation and profit at the edge of our Internet, and that could be critical to the evolution of many Internet-delivered services.
Multi-tenant clouds assure security for clients, but not necessarily for their ideas. Here's one thing you should discuss with your cloud provider before you sign on.
The very low-tech "scrum" project technique introduces "crowd talking" to projects and also sets the entire crowd to problem solving. So far, these new social-media-style meetings appear to have supercharged project execution.
With 24/7 processing and business continuation paramount, more organizations are considering having three datacenters, where primary and secondary datacenters are in their immediate region and a third is in a remote geography. Why? To avoid repercussions of a major disaster that could hit every IT resource in a specific region.
E-discovery is the requirement to make available all digital information related to, and in conjunction with, a legal proceeding. An appeals court ruled recently to limit the scope of e-discovery searches, which gives corporate counsel and IT executives a bit more power over the e-discovery process.
Enterprises would like to move to cloud computing but are hesitant because they are concerned about providers’ ability to secure company data. Here are some tips that help to ensure that if breaches occur, the business is not left holding the bag.
Big-data has become a big point of emphasis for many businesses. While the technology is available to deploy these applications, the needed personnel often is not. As a result, analytic engineers' salaries have blown past the six-figure mark, and hiring these experts has become a challenge for IT managers.
50 billion household devices will be on the Internet by 2020, according to Cisco. And we're hearing foreign governments are hacking our infrastructure. Surely our refrigerators are next!
New tools like laptops, tablets, smartphone, and wireless connectivity let us work from San Diego to Katmandu, and anywhere in between. But time management remains a problem.
Showing results is the best way to win over social business doubters, according to Mary Maida, Medtronic lead information solutions manager. Internet Evolution's Mitch Wagner interviewed Maida at the E2 Innovate conference.
New York's Metropolitan Transit Authority is conducting a pilot test of digital kiosks to guide subway users to where they want to go more efficiently and at lower cost.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
While NFC's original goal was to enhance mobile commerce applications, it is finding its way into a number of other uses, which is creating both opportunity as well as challenges for IT departments.
Enterprises would like to move to cloud computing but are hesitant because they are concerned about providers’ ability to secure company data. Here are some tips that help to ensure that if breaches occur, the business is not left holding the bag.
Edmunds separates customers into segments based on the info it collects on its site and from partners, and uses that to push out custom content, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
The automotive website uses propensity modeling to target ads and customer registration forms, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
Subsidized handsets, rather than locked handsets, should be the focus of regulators. We're not getting good deals, not fostering innovation, and weakening our power as buyers.
Expert Integrated Systems: Changing the Experience & Economics of IT In this e-book, we take an in-depth look at these expert integrated systems -- what they are, how they work, and how they have the potential to help CIOs achieve dramatic savings while restoring IT's role as business innovator. READ THIS eBOOK
your weekly update of news, analysis, and
opinion from Internet Evolution - FREE! REGISTER HERE
Wanted! Site Moderators Internet Evolution is looking for a handful of readers to help moderate the message boards on our site – as well as engaging in high-IQ conversation with the industry mavens on our thinkerNet blogosphere. The job comes with various perks, bags of kudos, and GIANT bragging rights. Interested?
To save this item to your list of favorite Internet Evolution content so you can find it later in your Profile page, click the "Save It" button next to the item.
Email This
