Building a Better CIO

There may, however, be a countertrend. When an IT function goes haywire and begins to interfere with business operations instead of supporting them, Olson observes, it is not always the techies’ fault. One of his recent students worked at a privately owned retail chain whose owner was the culprit.

“This owner dictated what technology projects would be worked on,” Olson says. “He’d read about a cool CRM system in BusinessWeek or someplace and say, ‘We need one of those.’ I think that’s happening more often today. Technology is so pervasive in our culture that a powerful executive can read a magazine article, and there’s your next technology strategy.”

Sorting Options

What that student wanted above all from St. Scholastica’s program was skills and knowledge that would help her educate the owner about how to evaluate software and systems, and how to make better decisions about adopting new ones. IT managers in general may not face her particular problem, but they do have to educate top executives about the pros and cons of competing options. That is a common challenge that drives them into these university programs. And the stakes can be very high.

S. Massoud Amin is director of the University of Minnesota’s Technological Leadership Institute (renamed in July from the Center for the Development of Technological Leadership) and previously directed the university’s master’s degree program in management of technology. The degree, established in 1990, is the oldest of its kind at a public university, Amin says. (An MIT master’s program predates it by a few years.)

A few years ago, Amin says, one student was a systems programmer for what he describes as an information-services company. The man had been hired while the company was changing its business-systems software to Oracle II. The transition took two years longer than planned, and costs grew from a budgeted $9 million to $25 million. “The student’s boss and his boss’s boss had both been fired,” Amin says.

The company now faced a decision whether to “ride out” Oracle II, upgrade to Oracle IIi, or switch vendors—to SAP or PeopleSoft, for example. The hot potato had dropped into Amin’s student’s lap. What should he advise his company’s executives to do, and how should he explain to them the business consequences of the various alternatives?

The student turned the problem into the “capstone” project for his degree. The company adopted his recommendation, which was to upgrade to Oracle IIi. He demonstrated that by doing so, the organization would save $6 million up front and almost $6 million a year due to capacity gains and lower maintenance costs. Sticking with Oracle also would be less disruptive than switching vendors, require less retraining, and so on.