e-Talk Radio: Rubin, Howard, 18 January 2001

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callers the toll-free line if they'd like to join in, pass a comment on to Howard, and that is area code 866-...it's toll free, 866-277-5369. If you'd like to call in and pose a question or if you've got some comments you'd like to add as we're going through the show. So, what is this Howard, the new business of IT, running IT like a business?

Rubin: Actually, the amazing thing, I mean if any of your listeners...just step back for a moment, in terms of IT, where IT was going, back in time it was a back office. The world has changed now, and IT is sort of totally fused with the business activities right now, and you look at the major banks and companies, and not forgetting about the dotcoms even for a moment, about major companies, one out of every four expense dollars is being spent on information technology whether it's in the IT budget or not, so in fact as IT becomes obviously more strategic, more important to the business, it becomes an increasingly large part of the cost structure of the business. IT can't be run as, I hate to use the word loosely, but IT has to be run as a business, that means IT has to be market competitive, it has to be market ready, it has to be offering the customers options, it has to be managing self with a strong fiscal accountability, it has to be treating the monies that it's responsible for as an investment and on and on, so the notion of running IT as a business now, really a business within a business or a business as part of the business, really means taking IT and making IT competitive through the regular market pressures of the business that houses it, and you feel like you're seeing this all over the place as more and more companies are understanding this.

Dekkers: And you said a bit of a challenge when you take...I know some of the CIOs have come up through the ranks of technology and so they're very technical savvy, but how can they fit into the business if you've got a lot of technical people managing technical people and now the new paradigm of "let's run it like a business..."

Rubin: They really have to enter what I would say is a whole new mind set, and this is not an easy transformation and not all are going to make it. In some companies, I mean, look at the range of things. IT in most companies is managed as a cost center, sometimes there's a cost center, where things have been charged back sometimes or not, sometimes the IT dollars look like funny money, sometimes IT dollars are just set by some corporate dictum that says "we will spend no more then 3% on technology and that's that," and that's one of the heritages, managing it to some budget cap and treating it as an expense. When I said the mind set has to be changed to make the transformation, in fact the CEO of a company in conjunction with the CIO now really has to think of them as an investment fund manager, and that investment fund is the investment in the company's technology assets whether these are the people, the processes, or the applications themselves. And you know if you become an investment manager or fund manager...a little later I'll talk about the notion of portfolio management...I mean that's what this transformation is about. You're going to have to look at the managing, this is

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