IT is All Grown Up

Solid corporate partner, leader of innovation, booster for systems of engagement: IT gets re-tooled for the future
IT is All Grown Up

The essentials

James McKeen has worked in, studied, and taught about information technology management for many years. An emeritus professor at Smith School of Business, McKeen has a unique perspective on the evolution of IT from strictly service provider to strategic partner and innovation leader. In this conversation with Smith Business Insight, he shares his views on where IT is headed.

IT moves from systems of record to systems of engagement

IT has been engaged forever with systems of record. They manage the transactions in the organization and do all the accounting. Every sale of stock gets recorded; that’s a system of record. Increasingly, IT is being called upon to develop systems of engagement. 

For years, they developed IT systems for employees. They had a captive audience, so they bought and developed software and rolled out big training programs. They said, Here it is, use it, and if there are any problems, we’ll have a help desk.

When you go to a system of engagement with customers, vendors, or suppliers, everything changes. With customers, firstly, you don’t have a captive audience. Secondly, you have no opportunity to train them. Thirdly, they have no desire to be trained. And fourthly, they’re probably a click away from leaving you. This is totally different. IT departments don’t have a history of building online transactional systems for end users and customers.  

Systems of engagement can also be internally facing, to employees. What some IT departments are trying to do now is build what’s known as workplace enablement, so employees can be treated as well as customers. For instance, they get rid of the situation where, on the weekends at home, I have all the latest and greatest technologies, and then when I show up to work on Monday morning I go back two decades with systems I’m forced to use to do my job. 

The give and take between Marketing and IT 

If we rolled back 10 to 12 years to when e-commerce first became the hot thing, marketing grabbed most of it. They said, We’re going to market directly through online websites. Now marketing is making decisions about deployment of technologies and services and channels that they should be deciding upon. But even if they build their own capability or buy or subscribe to their own capability, eventually all these roads come back. The systems in an organization need to be integrated. Ideally, you’d rather not have the marketing department or any department grabbing things and running away with them. You’d rather have the marketing department say, I need to call my friend in IT so we can partner and deliver the best possible business service. 

Back around a dozen years ago, I thought that for e-commerce to be really successful, IT and marketing would have to work together. So we at Queen’s School of Business developed an executive development program on e-commerce. Each participating company had to bring both the marketing executive and IT executive. It didn’t get much beyond the idea stage: the marketing guys wouldn’t sit in the room with their IT guys. That told you the state of the relationship between the two groups. 

Today it has improved an awful lot. Marketing is involving IT from the get-go; they say, To  enable and drive everything, we need those guys at the table. If IT is a strategic partner, it even goes beyond that because in many organizations IT is actually driving the innovation agenda.

Which technology leaders are effectively driving innovation?

Vineet Gupta, the CIO of Fairmont Raffles Hotels International, works hand in hand with all his business partners and works very closely with his marketing partner. Canadian Tire is taking huge steps in that direction right now. The Chief Technology Officer, Eugene Roman, is really pushing the business hard to come into the latest century with technology. Working with marketing, they designed the flagship Sport Chek store in the Yonge and Eglinton area of Toronto. It features digitized walls and screens; you can wave a soccer shoe in front of the screen and it will tell you all of the professional players who use that brand of shoe. It offers all kinds of engagement with the customer and is meant to be fun and interactive. 

As soon as something catches on, it will be incorporated into a store and if it doesn’t it will be discontinued immediately and they’ll move on to the next thing. Eugene has worked very closely with the marketing people to try and change the level of engagement and the nature of engagement of the buying experience. 

Eugene Roman is a finance guy to begin with, a Certified Management Accountant. But then he got into IT at Nortel Networks and Bell and then at Open Text. He doesn’t know a lot about retail other than being a customer but he knows an awful lot about technology and shaking up an organization. The president brought him in to dynamite IT and make retail fun and profitable. 

Certainly there are lots of examples where successful managers are recruited from out of the business to clean up IT and make it responsive to the business. And there are technology-oriented people doing that as well. It doesn’t matter which road you take, but once you’re given the label CIO, you have to have accumulated a very strong understanding of the business. 

Interview by Alan Morantz

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