Solve the CIO Problem by Properly Organizing Our Capital

    March 20, 2006

Our CIOs have a problem. One person has to have capabilities in managing diverse kinds of capital.

The CIO has to have professional capabilities with management strategy, technology, equipment and network operations, business organizations, and business processes. The CIO also needs to have capabilities with all types of enterprise information capital – – data, knowledge, records, and intelligence.

The same problem extends down from the CIO into the IT function. IT has to have capabilities in all these areas as well. All enterprises that I have evaluated have problems somewhere or another because IT does not have the capability to handle all of its responsibilities.

We have such examples as:

  • Business change is stuck in the technical IT backlog
  • Application systems are managed as technology and interfaced with the business rather than being integrated with the business process
  • The analysis of business improvement needs is separated from the business, and needs are satisfied by technology rather than precisely-defined business improvements
  • Users assistance is restricted to how to use technology per se and is no help in using technology to solve business problems
  • Stress on data and records with little support capability for knowledge or intelligence
  • System utilization managed as system availability or a service level rather than managing the utilization of the system to create value for the enterprise

So how do we solve the CIO problem and the problems faced by IT?

We now propose a CTO to handle technology needs. The idea of splitting out management of our capital based on capabilities required is valid, but we must do it right.

This is one of the issues we are discussing at the Business Change Forum, in order to define problems with conventional methods and to discover breakthroughs in enterprise management.

The root of the problem goes back to the beginning of IT. Our business processing used to be managed by each business unit with support from an enterprise organization and methods kind of unit. Then we started employing technology in our business processing that required special professional capabilities, so we set up data processing to develop the programs and to operate the expensive centralized technology. So now we processed data separate from the business. From here on things just expanded into the Information Technology units of today. As IT expanded, it became more difficult to manage, so we appointed a czar in the CIO.

But, what has happened to the rationale that set up data processing? We no longer need much programming capabilities, since we are using packages. The systems are much more pervasive and familiar, so everyone in the enterprise has at least, basic capabilities. More and more of our computer power is operated by the users, with IT handling the connecting architecture and network.

It is time that we rethink IT and all of our capital using the basic premise. “What professional capabilities are required to manage and support our capital”. We also need to rethink the meaning of capital utilization. We think of utilization as being used. We need to think of utilization as being managed for measured benefit that provides the return on the investment in capital. For years, IT has provided equipment or a service, and nobody managed how IT was utilized to benefit the business or to gain the return on IT investments.

We need to understand and structure all of our capital to satisfy three important needs.

  • To apply the proper professional capabilities to operate and support the capital
  • To provide the capital in such a way that it can be integrated and utilized by the business to produce benefit
  • To manage the performance of capital across the enterprise to ensure that it is utilized, improved, and developed properly to provide the return on investment

When we examine our capital to define it, structure it, and manage it properly, we will automatically solve the problems of mismanaged capital and the organization of IT. The CIO would no longer be one individual expected to do everything. There would be separate professionals with capabilities to manage each category of capital.

This process is fundamentally the way we organize capital to be managed and supported by R-pM. Capital is managed and supported by professionals who have the capabilities required for the capital.

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Harry Greene is American, with over 40 years’ experience in business change. He developed R-pM, the new breakthrough in managing the enterprise described in the book “R-pM Foundation and Advantage”.

Harry is the President of Result-performance Management Ltd. and edits Business Change Forum ( a weblog on problems with conventional methods. Contact: