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Tough Money: Technology

A CEO's Guide to Computer Systems

Make sure your managers understand the company's growth plan, and get the right technological information from the right people.

March 24, 1997|ROBERT BEAMESDERFER | TIMES STAFF WRITER

Picture this: You're the chief executive of a medium-sized business poised for expansion. Your accounting, marketing, sales, operations and information services managers say everything is in place except for one thing: a new computer system.

And not just an update to the old accounting-billing-order-processing setup that's wheezing along on everyone's desktop.

You, however, are not completely comfortable, because while you've been growing the business, information technology has mushroomed into a dizzying array of options. How can you be sure what you need and when? Can you simply trust your technology chief to make the right decisions?

Well, you can relax a little, because the experts say the answer doesn't lie in your knowledge of the inner workings of the technology. But you do need to have an overall idea about how each piece of technology affects your bottom line. And if your company is to stay competitive, technology needs to be part of the plan.

The key element, however, is still good, old-fashioned management basics: Make sure your managers understand the growth plan and goals, and get the right information from the right people.

First stop: your top information systems person. In big companies, that's a chief information officer. You're not that big? Don't worry, the fundamentals still apply.

Abbie Lundberg, editor in chief of CIO magazine, recommends viewing the top information systems person's role the way you would any other top manager.

"You have to look at it in context of how you look at other functions, such as finance. The CFO and COO really understand the business and market," and the CIO should too, Lundberg says.

Lew Leeburg, director of the Information Systems Research Program at the Anderson School at UCLA, concurs. "The CIO needs to be as good as his peers at the company."

To that end, your technology chief needs to be able to present the options to you without using software salesman's lingo, just as your finance officer would neatly sum up the pros and cons of a particular business loan.

Often, Leeburg says, the most important skill your technology chief needs is a good sense of timing--knowing what to do or not to do, and when.

Consultant Robert Kriegel, who owns the San Francisco Bay Area consulting firm Kriegel Squared and is co-author of "Sacred Cows Make the Best Burgers," says your technology staff should know how a piece of software or hardware will add value to the business.

"A lot of [technology people] keep up with the technology for the technology's sake instead of for the business' sake," Kriegel says. The critical thing for information technology people is to stay abreast [of] the changing aspects of the company's business, he says.

Information systems people "need to get out on the factory floor and in the field with the sales force," Kriegel says. The person in charge of technology at your company needs to be customer-driven, whether that "customer" is one of your managers or the potential new client who just walked in the door. In short, he says, a company's high-tech people need one-on-one human contact.

Kriegel cites a pharmaceutical company that asked its information services department to provide laptop computers to the salespeople. The manufacturing manager wanted more information about customers' anticipated orders so production could be more efficient.

An information systems staff member went out with the salespeople to better evaluate what he was dealing with. He discovered that the sales force was buried by paperwork, Kriegel recalls. Instead of just picking a laptop and software to satisfy the manufacturing manager's needs, he also developed a solution to reduce the paperwork.

Result: Salespeople had enough time to make one to two more sales calls each day.

Now that we've defined the technology chief's role, step two is your turn.

Nearly everyone has come to you with their concept of a "perfect" system. Sales wants the paperwork burden lifted. But marketing wants more information from sales and more quickly. Operations wants more data from sales too, so it can anticipate heavy and slow cycles. Accounting wants more detailed and up-to-date data because, well, they're accountants. UCLA's Leeburg says this is where a chief executive's role moves front and center.

"A CIO can suggest systems that have certain abilities and suggest solutions, but the CEO needs to make the decision," he says.

More important, Leeburg says, "the [CEO's] perspective has to be [that information technology] is an asset to be optimized, as opposed to an expense to be minimized."

And, he adds, having the latest software or hardware isn't always that critical. Most of the high- performing organizations, Leeburg says, aren't always the ones with the latest technology. The top performer is often the company that might be a couple of versions behind but uses what it has to the fullest extent.

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