From...

May 28, 1999
Web posted at: 9:14 a.m. EDT (1314 GMT)

by Barb Cole-Gomolski

(IDG) -- As businesses become more-savvy consumers of technology, CIOs are morphing from behind-the-scenes tech-heads into exalted members of executive teams, a recent study shows.

MORE COMPUTING INTELLIGENCE
	IDG.net home page
Computerworld's home page
Computerworld Year 2000 resource center
Computerworld's online subscription center
Reviews & in-depth info at IDG.net
IDG.net's personal news page
Year 2000 World
Questions about computers? Let IDG.net's editors help you
Subscribe to IDG.net's free daily newsletter for IT leaders
Search IDG.net in 12 languages
News Radio
	Computerworld Minute
	Fusion audio primers

Although most CIOs agree that their jobs are changing, they disagree on whether outsourcing — which is often touted as a way to free CIOs from the drudgery of technical maintenance — will help or hurt their efforts to use information and technology for strategic advantage.

A recent survey by Los Angeles-based Korn/Ferry International that polled 150 U.S. CIOs showed that 65% believe their jobs are becoming more business-focused. As part of the Korn/Ferry study, respondents were asked about general technology trends, including those involving the Internet, network computing and outsourcing.

About half the U.S. CIOs surveyed had reservations about outsourcing, saying it's too expensive and makes it difficult to react quickly to business changes. Others saw it as a way to free themselves from day-to-day minutiae, thus giving them more time to focus on strategic applications and general business issues.

Sixty-seven percent of respondents said that, to some extent, outsourcing hadn't been cost-effective.

"Outsourcing doesn't help [a CIO move into a more business-focused role]," said Chris Horrocks, CIO at Commercial Financial Services Inc. in Tulsa, Okla. Though Horrocks has no problem outsourcing small specialty projects, large-scale outsourcing has a paralyzing effect on IT, he said.

Still, San Jose, Calif.-based research firm Dataquest said the information technology outsourcing market is growing rapidly, from $55 billion last year to a projected $77 billion by 2000.

At Commercial Financial, Horrocks looks to his own staff to cover him on routine tasks. He and about 35 other high-level IT staffers focus on strategic applications, such as data warehousing and knowledge management, while a separate group handles day-to-day IT operations, such as PC and network support and mainstream application development.

That isn't always practical in today's tight labor market because firms often can't hire and retain the staff they need, said Karen Rubenstrunk, an analyst at Meta Group Inc. in Stamford, Conn. "Outsourcing is now a way of life because no IT organization can do it all," Rubenstrunk said. Instead of avoiding outsourcing, CIOs should be developing skills to deal with external resources, she said.

That's exactly what Sears, Roebuck and Co. is doing. The Hoffman Estates, Ill.-based retailing giant is shoring up its internal project management and negotiating skills to better manage contractors. CIO Joseph Smialowski, who will move to the top IT post at BankBoston this week, estimated that outsourcing operations of the Sears data center off-loaded about 40% of his work, freeing him up to hold spots on the company's executive, finance and compensation committees.

"If you outsource commodity work, it will help you focus more on the business," said a CIO at an oil company. When he started at the company a few years ago, the IT staff was handling PC and network support. "I have since outsourced that so we could focus on strategic applications," [including a retailing data warehouse], he said.