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How CTOs Can Help Businesses Run Better

This article is more than 10 years old.

What is the role of IT professionals in the long term? To me the answer is that CIOs, those who manage the portfolio of technology in a business, and CTOs, those who build and enhance solutions inside that portfolio, have one essential job that defines what they do: conquer complexity.

As the component parts of IT become simpler through Software-as-a-Service offerings and cloud computing, the playing field becomes wider. At most companies the bedrock systems are in place. Money and goods are being tracked. The important processes in customer service, compliance and the supply chain are being supported. There are gaps and more to do than time and money will allow, but that is always the situation in a mature company of any size. The beginning period when everything is being constructed does not last too long.

The problem facing most CIOs and CTOs is that they too often appear to the rest of the company as a cost. The question the rest of the company asks is: How can we spend less on what you do for us? About 70% of the IT budget is dedicated to maintaining the status quo. Most of the time CIOs and CTOs are not focused on the business, but on gardening the systems that are in place. Software as a Service may change the nature of this gardening, but to truly escape this trap, it is time for CIOs and CTOs to find ways to master complexity and become more relevant to the business.

After talking to dozens of technology vendors and CIOs and CTOs who are on the front lines, it's clear that there is a broad opportunity in the field of business intelligence for CIOs and especially CTOs to become far more helpful to the businesses they serve. My argument rests on the untapped power of the data explosion, the change in the nature of business intelligence technology, and a new way for CTOs to interact with the rest of the business.

The raw material of the opportunity is the explosion of data from many sources that rarely finds a way inside traditional business intelligence systems. Machine data is pumped out of web servers, networking and telecommunications equipment, sensors, and other sources. While a web traffic log is not sexy, the fact that it paints a picture of individual customer behavior is. Social media data from Twitter and elsewhere is also a huge opportunity for improving predictions of demand patterns. At most companies these new data sources are not being tapped. They are not even seen as an asset. The CTO should start a catalog of all of these new information sources and start to understand what value the information may have to the business.

The current generation of business intelligence technology cannot handle the influx of machine data. It is no accident that every single large scale web company has had to either build or adopt a new generation of NOSQL databases. The first thing a CTO must do is find tools to help understand new data sources. Splunk is a tool for searching and understanding machine data that had its roots in helping IT understand operational log; it is now branching out to show how such data can be used to provide business insights.

QlikView has achieved dramatic growth because its in-memory architecture can be loaded up with any sort of data that can be associated and explored dynamically. WiseWindow is charting new territory in modeling consumer behavior based on social media comments. Vitria Technology is pioneering the field of operational intelligence, systems that are focused gaining enhanced visibility and insight from streams of data that are flowing from many sources.

At SAP TechEd two weeks ago, SAP CTO Vishal Sikka confirmed that many of these trends, especially in memory technology and the ability to analyze event streams through complex event processing, are going to become core parts of the SAP infrastructure. He explained that in-memory technology would eventually absorb much of what business intelligence data warehouses currently do. The point is that understanding the new data opportunities will require new technology. The good news is that most of these systems are cheap compared to past investments.

The business side at most companies is suspicious that the CIO and CTO are really more interested in the technology they play with than the success of the business. The right approach is to make a catalog of the data that is available, understand the potential of the technology mentioned so far, and then go to the business in search of questions. Find out from the line of business managers the questions for which the answers would really make them money. Most of the time the conversation will be short. Business managers are usually suffering because they do not have key information. They know the questions and answers they need to make more money.

With data, questions and technology in hand, CTOs can work their magic. They can dive into that ocean of complexity and burst forth with a way to provide answers. At that point the business managers will be shocked to find a technologist coming to them with a genuine business innovation. Then the budget will be easy to find. The business line will get the money right away, because they know the return will be quick and large.

Dan Woods is chief technology officer and editor of Evolved Technologist, a research firm focused on the needs of CTOs and CIOs. He consults for many of the companies he writes about. For more information, visit evolvedtechnologist.com.

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