Reece: The CIO transformation

The job of the chief information officer has never been easy. Today, with increasing demands to get a bigger bang for the buck, it is even more challenging. But there is an answer: CIOs must take the lead in making information technology investments that maximize the total value of their enterprises' operations. Then they can position themselves as architects leading their business partners in optimizing how their businesses do business.

One of the first steps CIOs can take to strengthen their position is to embrace the telecommunications changes that are revolutionizing the way government works. Enormous savings can be achieved when individual employees are allowed to conduct their work in a virtual world.

But to do this, they must have remote, secure high-speed access to their enterprises' information and functional support to achieve their individual missions. Instant connectivity to their enterprise resources anytime, anyplace, makes these stakeholders "virtual."

If CIOs share this view of their networks and innovative new operational approaches, they will begin to focus on how best to enhance each of their stakeholders' experiences during each connection they make to the network.

This is a much different perspective for most CIOs because it redirects their attention from managing the total cost of ownership of IT resources to creatively, proactively developing an architecture that defines how the organization puts end-to-end support delivery processes in place to maximize the value of the enterprises' operations to each group of virtual stakeholders.

This approach also positions IT costs more appropriately — that is, as an integral element of an end-to-end operational delivery chain whose aggregate costs are more than justified by the high value of the outcomes it produces.

It's not a moment too soon for CIOs to change. Demands for increased support for "virtual" workers are greater than before and continue to proliferate as the numbers of such workers grow and as their productivity expands.

Janet Wallace, president of Unisys Global Infrastructure Services, underscores this rapid evolution away from traditional desk-bound work processes. She said security plays a pivotal role in offsetting the operational risks of virtual solutions, enabling land-based and wireless connectivity for these new, more productive workers.

Wallace and her team at Unisys anticipate that this rapidly expanding virtual workforce will have a dramatic impact on how businesses operate, how their employees work and how they reach their prospects and customers. In her view, all of this activity is spurred by the real and tangible recognition by senior business executives that this approach is a new opportunity for market-leading companies to create value.

She cites a simple example to make her case. A European car rental company she visited recently had invested in handheld devices to streamline the process for returning rental cars. The company's studies found that this new capability would dramatically improve customer satisfaction while expediting vehicle turnaround and saving money. Again, a new operating paradigm replaces an outdated way of doing business.

Stakeholders are increasingly expecting and demanding virtual operational support — any service, anytime, anywhere, in real time.

We've already seen how personal digital assistants have affected people's work habits. Such devices and their remote connectivity to enterprise networks are making it easier for people to take their work with them wherever they go — not only outside their offices, but also across the hall, to meetings across town, nationwide and even worldwide.

People like the flexibility, and it typically improves the enterprise's financial performance and individual workers' productivity.

An American Business Collaboration study in 2002 found that more than 80 percent of full-time Americans work off-site or with others who are located elsewhere.

Making it work

Mounting demands for increased productivity and enhanced efficiency in achieving organizations' missions are part of the pressure to accomplish more for less. New technology-based tools are coming to market to make the mobility, security and affordability of virtual work increasingly feasible.

At the Internal Revenue Service, officials are working to create a support capability for remote employees that will ultimately serve the entire agency. It started with employees in the Large and Mid-Sized Business (LMSB) division.

The first step was to set up a virtual private network. The next step was to augment that service with DSL wherever available to ensure a secure, high-speed connection to the network.

The final step is to adopt a new remote access program that will greatly reduce costs and allow officials to extend this productivity-enhancing service to other IRS workers. The results will further demonstrate how using secure high-speed networks can revolutionize enterprise operations, save money and increase the chances for mission success.

"The VPN service was piloted and the results proved highly beneficial," said Dave Bass, the IRS' director of business systems planning. "Despite the cost of the VPN service, local examiner productivity improvements, senior examiners' and subject matter specialists' abilities to more productively engage themselves in individual taxpayer issues, reduced travel costs and other identified benefits justified the program. Therefore, as funding became available, we proceeded with rollout. But in parallel, our LMSB and IRS security and networking teams aggressively sought lower-cost alternatives."

To be most effective, CIOs must develop the basic knowledge and acquire the skills necessary to lead efforts to optimize analysis of enterprise value chains and business operations. They must sponsor winning investments on a continuing basis across a full spectrum of options, including the workforce, technology, information and other fixed assets.

The transformation begins by acquiring a full understanding of and developing the ability to practice and apply the principles of creating new value from enterprise operations.

Successful CIOs recognize and define the opportunities for operational improvement — by leading solutions design, establishing realistic performance measures and taking advantage of vendor resources to the fullest degree practical.

In short, CIOs are a natural source of leadership, but success will come only with proactive, proven

value-creating results, jointly subscribed and mutually earned with business unit executives and workers.

Unisys' Wallace sees "the CIO as the individual executive most eligible and accountable to lead the drive to capitalize on these new opportunities across their respective enterprises."

But, she adds, "The ability of CIOs to win in this instance rests heavily on their capacity to work successfully with their executives and business unit partners. Without this strong bond and deep mutual commitment, the effort is destined to fall short."

The value of delivering products and services to stakeholders — citizens, managers, workers and others — is a great opportunity for all agencies. And the challenge of succeeding lies squarely with CIOs.

Can they win the hearts and minds of their business executives and partners and become architects who optimize the total value of their enterprise

operations?

Reece served as CIO at the IRS from March 2001 to April 2003. He now heads John C. Reece and Associates, a Washington, D.C., consulting firm.