Mike Barlow - The Changing Role of the CIO

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Information technology (IT) traditionally focused on the processes of managing data, rather than on data itself. The relatively new idea that data itself has intrinsic business value is forcing corporate IT departments to rethink many long-held beliefs about data management. The notion that data has valuethat it is, in fact, the new oilis having a seismic impact on the IT function.

Were going to see a lot of changes in the IT industry, says Harvey Koeppel, a veteran chief information officer (CIO) whose lengthy career includes executive posts at Citigroup and Chemical Bank, now part of JPMorgan Chase. Were at the beginning of an inflection point, and weve only begun to scratch the surface. Until very recently, the primary role of IT was to enable business processes. From a technology perspective, that role forced IT to focus almost exclusively on the programs running underneath those business processes.

That master/slave relationship is drawing to an end, says Koeppel. The reason for the sea change seems relatively simple on its surface: many companies now perceive that their data has more inherent business value than all the various processes and technologies necessary for managing that data.

Historically, the IT industry was based on a process paradigm, says Fred Balboni, who leads the big data and analytics practice in IBM Global Business Services. You kept your eyes on the process. You were more interested in the pipeline than in what the pipeline was carrying.

If data truly is the new oil, then what is the proper role of IT in a global economy that is fueled by data? Is IT analogous to the oil industrys drilling equipment, pipelines, refineries, and gas stations? Or does IT have a strategic role to play in the age of big data? And if IT does indeed have a strategic role, what is the proper role of the CIO?

IT has focused traditionally on building reports about events that happened in the past. Big data is now shifting the focus of IT. Instead of just looking backward, IT can develop the capabilities for looking forward, says Clifton Triplett, a West Point graduate who has held senior executive IT posts at Baker Hughes, Motorola, General Motors, Allied Signal, and Entergy Services. Going forward, IT will be far more instrumental in predicting future opportunities and strategies based on statistical information. As a result, IT will become much more important. Shifting from a backward-looking to a more forward-looking role will require IT to change its view of data. IT will have to understand data in a business context, says Triplett. IT will have to acquire new skills for managing and understanding data. Today, the average IT person doesnt have those skills.

In other words, IT must learn to perceive data in a way thats similar to the way that the business perceives data. As IT develops more expertise and a deeper understanding of big data analytic techniques, You will begin to see a stronger integration of IT and the business, says Triplett.

Ashish Sinha, who leads the Data Warehouse Technologies group at MasterCard, agrees that IT is poised for a significant transformation. In its earliest days, IT was known as Management Information Systems (MIS). Over time, MIS has evolved from a purely reporting function into a fully fledged corporate department that oversees virtually every business process occurring within the modern enterprise.

Despite its enhanced scope and larger budget, IT still exerts relatively little influence on the development of business strategy. Thanks to big data, however, that influence gap is on the verge of vanishing. Big data technology allows companies to harness the power of predictive analytics, extract value from their data, and monetize it, says Sinha. For the first time in its history, IT has the potential to transform itself from a cost center into a profit center. For the CIO, the upside is clear: When you lead a department that makes money for the company, you get a seat at the table when strategy is discussed. If you are the CIO, big data is your new best friend.