Technology: How Much? How Fast? How Revolutionary? How Expensive?

Not long ago, we believed in technology's outsized potential to move markets and to transform industries. Now the promise of technology seems unfulfilled. What's next? Will technology take a backseat? Or are we about to see a new role for technology — one that is smarter, sharper, and more sustainable?

Lightning Round 1: Technohits, Technomisses

Polly LaBarre (senior editor, Fast Company): Where have we overshot the mark when it comes to technology, and where have we not yet begun to realize its potential? Gloat or vent.

Christopher Meyer (vice president and director of the Center for Business Innovation, Cap Gemini Ernst & Young): We've undershot in terms of courage on the strategy side. Technologists have developed new capabilities, but strategists haven't figured out how to use those resources to start adjusting strategy.

Frances Karamouzis (research director, Gartner Inc.): We've underestimated how long it would take for technology to permeate the social fabric and underestimated our own human capacity for creativity.

Jim Davis (senior vice president and chief marketing officer, SAS Institute Inc.): The issue isn't technology. The issue is whether an organization can apply new technology.

Paul R. Gudonis (chairman and CEO, Genuity Inc.): More than 500 million people around the world are now connected to the Internet either at home or at work, and tens of millions more are coming onboard. But we haven't figured out how to make money with the Internet yet.

Glen Salow (executive vice president and CIO, American Express): Five years ago, we said that the Internet would reinvent the world. And the media and the investment bankers actually listened to us. Now we've got our tails between our legs. We have created a new level of connectivity, a new level of service, and a new level of intimacy with our customers. Some things fell short, but I'd make the same mistakes again.

John R. Patrick (vice president of Internet technology, IBM): In terms of technology, we're at the very beginning. Although there are 500 million people connected to the Internet, only about half of them are using it right now. That leaves nearly 6 billion people who are not using it. When you look at the potential of the technology, we're less than 5% of the way there.

Jill Mullen (first vice president and CTO, Corporate Technology Group; Merrill Lynch): In the financial world, the real focus is on cost-efficiency. That's where we've undershot the mark. We've spent lots of money growing technology initiatives and projects, but the ROII — return on Internet investment — isn't necessarily where people want it to be.

Lanny Cohen (vice president, strategy, technology, and new markets; Cap Gemini Ernst & Young): There's great technology out there, but I'm concerned about the readiness of organizations to respond to the challenge and to execute quickly.

Andrea Anania (executive vice president and CIO, CIGNA Corp.): I think that we've overestimated the ability of enterprises, individuals, and organizations to absorb change, and we've seriously underestimated the amount of discipline it may take to do that well.

Thornton A. May (chief psychographer, Toffler Associates Inc.): The Vietnam War was lost in part because of a lack of popular support. Technology's promise is lost because of a lack of popular support. There should be no more CIO-centric technology implementations. No more technology Vietnams.

Essay Question 1: The Technology Decision Maker's Agenda

Polly LaBarre: What are the "Thou shalt" or "Thou shalt not" commandments that CIOs should heed?

Thornton A. May: The number-one "Thou shalt not" is actually from Jerry Gregoire, the former CIO at Dell, who said, "Don't automate broken business processes." Technology doesn't make you less stupid; it just makes you stupid faster. Basically, we have Star Wars technology, factory-level deployment, and sit-around-the-campfire human behavior.

Christopher Meyer: The executive side wants the information side to get out of the prison that is created by older systems. Churchill once said, First we shape our buildings, and then they shape us. Information architecture is about as flexible as a building. Knocking down all of the constrictions that make up the infrastructure of most of our large businesses today is a big requirement for the CIO.

John R. Patrick: But the solution isn't just to break that infrastructure down and throw it away. It's better to integrate and reengineer all of the various silos of automation, to link those silos together. You should be able to go to a hotel Web site, reserve a room, and check which airline you want to have your frequent-flier miles deducted from to pay for it. Those kinds of things don't require massive engineering; they just require linking separate systems.

Paul R. Gudonis: The question is, What are CEOs thinking about? I meet with about 200 CEOs a year. When the dotcoms were grabbing headlines, revenues, and customers by implementing Internet technologies, enterprise CEOs could just say, Get my company online so that I can try to stop the flow of customers and traffic to those dotcoms. Now they're saying, I want to see ROII.

Glen Salow: The single most important thing a CIO can do is to show people how to get what they need and how to get an immediate return on investment.

Jill Mullen: Part of the difficulty in organizations today is expectation management. There were years when no CEO wanted to talk about technology. Then, suddenly, everyone wanted to talk about technology. Then everybody had very high demands for technology — and, frankly, we delivered. The Internet allowed us to reach our customers in completely new ways, and that has been a great advancement. In the financial world, the real focus is on cost-efficiency. That's where we've undershot the mark.

Frances Karamouzis: The question is, When do people actually act? People act when there's pain, when there's fear, or when there's hope. The business case for those three things varies dramatically. It's very easy to quantify the pain; it's much harder to quantify the hope. The Internet era was based on hope, and it was very hard to get to a bottom line.

Lanny Cohen: In my conversations with CEOs, I'm hearing about stabilizing the business and surviving in today's times. I'm hearing a focus on customers. And I'm hearing a lot about protecting people. I'm not hearing a lot about technology. The assumption is that technology is baked in there.

Frances Karamouzis: We need to understand that technology is an enabler. The end goal is to drive business. Right now, there isn't a single new technology that's pervading everybody's mind. So this pause is actually being perceived by leading-edge companies as an opportunity to move forward, integrate, and converge on key business goals.

Glen Salow: We're all so busy talking about how technology is an enabler that a lot of people are shying away from the next big ideas in technology — the kind that will rock the world. CIOs and technology leaders are pulling away because they got burned when they stepped out in front with the dotcoms.

Essay Question 2: Technology Meets Strategy

Polly LaBarre: When it comes to linking technology and strategy, what are the issues that CIOs need to address?

Andrea Anania: I spend my time focusing on organizational and strategic flexibility. That involves a lot of unsexy things, including serious thinking about organizational-design options so that you can get the most out of your people, so that you only have to build things once, so that you can reuse things, so that you can have absolutely rigorous processes, and so that you can execute and deliver well.

Lanny Cohen: That's the basis of the concept of adaptive IT. The architecture, infrastructure, applications, management, and information have to allow the enterprise to respond quickly, because we can't predict the future.

Christopher Meyer: Different companies approach technology and strategy in different ways. Both Amazon.com and Capital One view themselves as information-based businesses. Amazon considers every call from a customer to be a failure of the online system, because it wants its customers to be able to do everything online. For Amazon, each customer call is like a consulting report that tells people there what didn't work. Then they ask, How do we fix that so it never happens again? Capital One built its information system to learn about the marketplace in a very specific way. The company puts lots of offers out there. The ones that fail are considered to be experiments that tell them something about their consumer models, and what they learn goes back into the models. Their system is designed to learn and evolve.

Both of these examples are cases where the people who thought about strategy created a learning and evolving system using connectivity. That's the right recipe. We don't know yet how to apply it to every kind of business. But bringing together executive management and information management around such issues is a productive idea.

John R. Patrick: When it comes to customers, the Internet is a sense-and-respond model. You listen hard to your customers. You learn and you change — but not over the course of 18 months. You do it over the course of 18 days or maybe 18 hours. How do you learn this outside-in approach? Talk to kids. Watch how they use instant messaging, and you can learn it all. Kids hold the clue to the future of technology.

Lightning Round 2: The Next Technology Thrill

Polly LaBarre: Which technologies are you excited about? What's on the horizon for business opportunities and customer innovations or for changing the game?

Andrea Anania: For the first time, we're seeing consortiums of competitors come together to work toward eliminating complexity. There's a move toward standardization, which will make a very big difference to all health-care consumers.

Lanny Cohen: I see a lot more movement happening in broadband and in digital networking. Wireless is going to come back even stronger over the next couple of years. Collaborative computing will become a big thing, because it will enable a lot of human interaction. And I think there will be a big play around employee-relationship management technologies.

Paul R. Gudonis: We're planning for the arrival of persistent networking, where the Internet is always on. It makes a big difference when you have an always-on connection at your home. Add wireless to that, and you have a low-cost, home-based, wireless LAN. Your devices can always stay connected. They're in your pocket, they're in your purse, they're in the car — they're truly ubiquitous. It will offer everybody at this table a different way to interact with customers.

Jim Davis: Going forward, there's going to be a real focus on human factors. Who is it that we're dealing with? Who are our customers? How do they like to be dealt with? Who are the influencers? When we market something, maybe we shouldn't give that 20%-off coupon to the person who's most likely to buy. Maybe we should give that coupon to the influencer. Technology can help make big gains there.

Frances Karamouzis: A computer-like device called a "radio frequency identifier" now costs less than $1. It has RAM and circuitry just like a computer, so it can store and transmit information. It can be weaved into your clothing, placed on your pizza box, or embedded on any widget that comes off of the assembly line. And the key opportunity is in bringing all of those things together collaboratively and interactively.

Lightning Round 3: What Happens Next?

Polly LaBarre: For our final lightning round, I want you to think about one absolute truth, one assumption, or one simple step that we can't leave this table without.

Christopher Meyer: Branch Rickey, the general manager who built the St. Louis Cardinals and the Brooklyn Dodgers, had a very simple management rule: Put a rookie in the starting lineup every year, and you'll keep the whole team from getting old at once. He applied selective pressure to what already existed. Similarly, IT people should look at their system and ask, What is going to hold me back if the whole system gets old at once? As a discipline, they should get rid of part of the system every year. In time, they'll create an adaptive IT infrastructure.

Frances Karamouzis: The critical factor is how human behavior and technology interact.

Jim Davis: Leverage the investment in technology that you already have. Use existing technologies to focus on your assets. Recognize that your assets are the people you do business with — your customers, your suppliers — not your desks, your computers, or your balance sheet.

Paul R. Gudonis: I would borrow a suggestion from a friend, Geoffrey Moore, who wrote Crossing the Chasm. He said, Figure out what you want to do better than anybody else in the world, and then outsource everything else — whether it's the payroll system, technology operations, or design work. Then, focus on creating your competitive advantage. Because of the huge costs in IT, ask, How can you leverage the investment that others have made in order to direct your investment to the areas where you want to create competitive advantage?

Glen Salow: If you can't explain it to your mother or your grandmother, don't do it.

John R. Patrick: Look at your Web site, and find all of the things that you can't do. Then prioritize and work on them. Soon, people are going to expect to be able to do a lot of things that they can't do now, and you need to be ready.

Jill Mullen: The only certain thing is change. A career in technology is a good place to be. But we're all a bit masochistic. We like being just this side of uncomfortable, and that's what I see coming in the future for technology.

Lanny Cohen: Acknowledging my business partner, Chell Smith, I'd offer a phrase: Architect to evolve and build to perform.

Andrea Anania: My message is, Constantly be thinking about flexibility so that you can help drive the organization forward. Think about how you can deliver speed and quality simultaneously. Retire a legacy system every year. (I love that one.) And really focus and understand what you do well and what others can do better.

Thornton A. May: Every person on this planet — every CIO, CEO, board of directors, and citizen — gets the technology they deserve. It's not the vendor's fault. It's not some environment's fault. It's time for us to stop being victims and to stop blaming other people. We have a personal responsibility to make sure that our technology works and that it's something we can be proud of. The only limitation on our technology is how great we as individuals can be.

20 Technology Briefs: What's New? What's Next? What Matters?

1. Technologists have developed capabilities that strategists haven't figured out how to use.
2. Technology is fast; the absorption rate by society and by organizations is slow.
3. We have a global network, broadband, and data centers. Now all we need is a way to make money.
4. Just because we haven't figured out yet how to monetize technological advances doesn't mean that they aren't critically important.
5. We're only 5% of the way toward using the technology that's been developed.
6. No more technology Vietnams. No more CIO-centric technology implementations. No more open-ended technology deployment.
7. Technology doesn't make you less stupid; it just makes you stupid faster.
8. Information architecture can be as inflexible as a building. Sometimes you have to knock down the walls.
9. CEOs were looking for an online presence. Now they're looking for ROII — return on Internet investment.
10. When do people actually act? When there's pain, fear, or hope.
11. CEOs are talking about surviving tough times, about their customers, and about their people. They're not talking about technology.
12. The only way technology matters is if the PDU — the poor dumb user — trusts it, believes in it, and wants it.
13. The job of the CIO is to provide organizational and strategic flexibility.
14. Internal constituents and external customers aren't on the same page: It's technology Bosnia.
15. Competitors are forming consortiums to eliminate technological complexity.
16. Collaborative computing will be the next big thing.
17. In five years, the best personal assistant you've ever had will be with you every minute.
18. If you can't explain it to your mother or your grandmother, don't do it.
19. Architect to evolve and build to perform.
20. Everyone gets the technology they deserve.

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