Monday, April 3, 2006

Executive Education: Now More Than Ever

It's time to learn more about strategy, sales, or finance. So do you take an individual, week-long certificate course at Harvard, or opt for a custom-designed, department-wide program from the Wharton School? We lay out some of the basics.

By Carol Hilderbrand

By now, CIOs ought to be used to rapid changes — in technology, in business, in world economics. But after the tectonic-plate shifts of the past few years, IT executives now look out on a corporate landscape that has changed nearly beyond recognition. Global economies have been buffeted by geopolitical events as well as a continuation of the Internet implosion. As the economy struggles to recover, companies have put the brakes on IT spending — technology budgets are largely flat or declining in the Fortune 500.

But corporate expectations about technology investments have only risen as senior executives look to any avenue to improve the bleak profit picture. Now, CIOs face intense pressure to spend frugally, and to seek IT projects and investments that promise an immediate return on investment. "With today's fluctuating IT budgets, project performance right out of the gates is critical," says Charles Breckling, director of marketing for executive education at the Harvard Business School in Cambridge, MA.

In short, it's crucible time for CIOs.

"The pressure has undoubtedly intensified for them," says Donald Lessard, professor of international management at MIT's Sloan School of Management. "There's been a sharpening of focus as executives realize that IT is a key determinant in how a company does business and that it has to be considered strategic."

Indeed, the concept of strategic technology has grown in importance over the years, as IT moves from an operational cost center to a function with the potential to actually generate revenue for an organization.

"Technology executives need to move from simply supporting business initiatives to becoming more integrally involved in strategy and organizational design and understanding how IT can change the business," explains Lessard.

For example, Gerard McCartney, CIO of the Wharton School at the University of Pennsylvania in Philadelphia, works closely with CFO Scott Douglas to prioritize technology projects to fit business goals. "We always make sure that the projects we fund support those strategic objectives," says McCartney. The two biggest priorities are faculty research and student education, and that's where a large amount of funding goes — a decision that has paid off in spades. McCartney supported a project called WRDS, a data-mining tool that helps Wharton faculty do research. "There's nothing to compare to it," says CFO Douglas. "When we sold it to other institutions for $30,000 a year, we knew we had a case for proving IT value. Now it's become a revenue generator."

Executives who are looking for money under any possible rock love the idea of IT moving from the red to the black side of the balance sheet, but in order for that to happen, CIOs must undergo a sea change in their very job description. They must be able to boldly envision technological initiatives that provide competitive advantage, and they must do so within the fiscal straitjacket that is the order of the day at many companies. Moreover, they must do so in a world in which corporate and customer expectations of IT capabilities are very high indeed. It's not enough for CIOs to streamline the supply chain within their companies — now they must tightly couple their systems with those of their suppliers, partners, customers, and even competitors. Customers, in the meantime, want instant access to information — about products, orders, bills — through a variety of access points, be they phone, email, or Internet portals. All this adds up to an urgent need for some very fresh thinking about the problems and challenges of managing technology.

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