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The IT function is just a utility and the IT director has no place on the board

The IT function is just a utility and the IT director has no place on the board

True, says Dirk Sauer, commentator and B&T's resident curmudgeon

There is a lesson in the dot-com disaster, a disaster which single-handedly has brought the American and European economies to the brink of recession. It's this: IT got too big for its britches. The relationship between technology and business got skewed. The Internet, really just a pretty good communications and research tool, was hyped into a world-altering phenomenon that would change the very contours of the business horizon.

Balderdash.

The point is, information technology is just that - ways of organising and conveying information. It speeds up certain parts of doing business but it doesn't fundamentally alter the way business is done - or the rules about what makes a business flourish or flop. It doesn't mean that IT directors are suddenly boardroom material.

The best IT directors are those who deliver a service to their companies reliably and within budget. The best analogy is a utility company: you wouldn't ask Thames Water which house you should buy. Similarly, IT directors should be expert in emerging technologies and in their own company's needs. Thinking up new ways of doing business isn't properly within an IT person's remit.

This isn't to say IT directors should not be important people in the company. They should be, but they shouldn't crowd the boardroom table, taking space better reserved for disciplines more critical to success, like customer service or product innovation.

Research by the Impact Programme shows that CEOs believe the IT leader will spend less time driving change and more time keeping up with the latest technological developments and making sense of them. In other words, stick to what you're good at.

The best model is for the IT function to come under the aegis of the finance director, a breed of executive groomed and conditioned for the rigours of corporate governance.

False, says Brinley Platts, MD of IT directors network the Impact Programme

Companies will miss out on the very real payback of IT if the person in charge is not very senior and intimately involved in the key decisions - if, indeed, that person does not have the title or the responsibilities of chief information officer.

For example, Web-based processes are moving toward the heart of successful companies. We're not talking about dot-com endeavours necessarily, but supply chain management, procurement, communication within the enterprise, and other basic functions.

Oracle, for instance, has shaved $2bn from its yearly operating costs by employing Web-based processes to cut down on complex and manual procedures. This company illustrates the fact that unless Web-based methods are embraced, a business can never be lean, efficient or global.

And it's not just about making old processes better. IT can create new business models, routes to market and step changes in customer service. HM Land Registry speeding up conveyancing? British Midland doubling its market in Europe and the US? BMW custom-building your car in under six weeks? These accomplishments can't be achieved without IT, and such a fundamental function needs support and representation at the very top of an organisation.

The fact that a lot of companies have dozens of uncoordinated Websites provides a good illustration of what happens when you don't have a CIO who is empowered and in charge. When you have marketing departments contracting out Web initiatives to third parties, you risk incurring serious damage in terms of security and branding.

Needless to say, if companies don't have a CIO that combines an executive perspective with IT orientation, the various departments put in charge of outsourcing IT services stand to receive a fleecing from suppliers.

Information technology is now the key interface between a company, its partners and its customers. If the head of that function isn't a peer in the community of divisional heads or doesn't have a solid working relationship with the chief executive, his or her company is bound to get it wrong when it comes to participating in the network economy.

Read more on IT outsourcing

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