This is an amazing time to be a CIO. The integration between technology and a company's revenue stream is becoming so seamless that every company is (or will be) a technology company; and this provides enormous career opportunities for CIOs. Keep your focus on supporting the business through efficient internal processes and systems, and you will live a gratifying CIO life. But expand your focus to customer-facing product development, and you will set yourself up for a wealth of new roles.
To understand how to make that happen, I spoke with four CIOs who successfully launched revenue-generating products and leveraged that experience to carve out a more multifaceted role for themselves within their respective organizations. They share their lessons below.
Partner with the business. In 2006, the marketing department at VistaPrint, a US$150 million company that provides customized printed products to small business, identified the need to offer customers the ability to design logos online. "Our software engineers created a way to algorithmically map the elements of a good logo," says Wendy Cebula, then CIO of VistaPrint. "We worked with marketing and developed a logo design tool that blew away the competition, and we integrated it as a new service on our site."
The logo design tool successfully enhanced revenue in three ways: VistaPrint customers tend to order more print products while using it, thus growing existing revenue; customers design logos for free but pay for reuse rights, a new revenue stream for the company; and businesses in search of logo design now visit VistaPrint, allowing the company to tap a new customer segment.
The tool was successful from a career perspective as well: Cebula was promoted to COO nine months later.
Give IT accountability for revenue. About 80 percent of VistaPrint's IT staff is in the Capabilities Development Group, which consists of software engineers, project managers, process experts and DBAs. "The group acts like a consulting organization for our business units," says Cebula. "Whenever the business needs a new process or product, the group starts early and works broadly across the whole capability. We pull together the entire solution, not just the technology."
While the product managers own the P&L, the capabilities development teams are measured on how they help the product managers meet their revenue goals. "My staff's responsibility is to meet or exceed the revenue goals for what they are developing; they make decisions based on those objectives," says Cebula. "Any one of our developers could tell you in an instant what their product's revenue projections are."
Use the two-way mirror approach. H&R Block CIO Marc West partnered with a VP of store operations to develop a major new business unit, H&R Block Commercial Markets, which launched this February. The new business provides tax preparation software as a service to companies who in turn offer tax preparation to their customers. West, who is now both CIO and group president of Commercial Markets, projects significant profits for the business in 2007.
West came up with the idea for Commercial Markets during an RFP process for some tax preparation software he was evaluating to support the business. "We used that RFP to review the major software providers to our competitors," says West. "From that software review, we learned a lot about the independent market and what our next move could be."
West calls this approach a "two-way mirror" model, where in the course of evaluating technology for your own business, you ask the right questions to gain insights about how your competitors are using that technology. "Every time you look at a technology, consider not just what it does for you, but what it does for your competitors," says West. "Then you can have a real conversation with your CEO about new market opportunities."
Know how technology impacts your industry. In 2006, Guido Sacchi, CIO and VP of corporate strategy of CompuCredit, a direct marketer of branded credit cards, established an innovation committee. There he, the CFO, CEO and other business heads meet to discuss new ideas. Last year, the committee decided to look into entering the mobile phone market. "The CFO's role was to ask, 'Can we afford this?' The head of business development asked, 'What is the market potential?'" says Sacchi. "My role was to ask, 'Can we operationalize this? Can we make it happen?'"
When Sacchi came back to the committee with a plan for implementing the new business idea, his CEO offered him the reins. While retaining his CIO title, Sacchi is now the senior operations executive and P&L manager for the new business, which will launch later this year.
"CIOs should capitalize on the fact that the technology content of products and services in every industry is increasing," says Sacchi. "The credit card may disappear with its functions embedded in some other device. Financial services are now offered in virtual networks like Second Life." CIOs intent on business innovation and revenue generation need to stay on top of how technology is permeating their industries. And it doesn't hurt to establish and lead an innovation committee that is poised to turn new ideas into action.
Pick the right company. As technology moves to the core of all businesses, CIOs will have a better shot at creating revenue-generating products if they pick a company that embraces its technological destiny. Like all of the companies mentioned here, Advanced Health Media is not, strictly speaking, a technology company. Its business is in managing promotional events for pharmaceutical companies, and it uses technology to fulfill that goal. In the process of supporting this business objective, CIO Greg Miller created a new technology product, a tool that tracks every transaction for every promotional dollar spent by its customers, that will begin generating direct revenue over the next 12 months. Serendipity? Not at all. Miller made sure going in that this was a company that would allow him to move seamlessly between internal systems and new customer products.
"Prior to this position, I owned a software company, and Advanced Health Media was a client of mine," says Miller. "The founder of the company told me that he liked my approach and that he wanted to lead with technology."
In nearly every industry, the divide between technology and a company's core product line is decreasing by the minute. The time is now for CIOs intent on moving into "the business" to capitalize on this shift and start producing revenue. Show your CEO the money, and chances are good that he will show you a terrific new career opportunity in return.
Martha Heller is managing director of the IT Leadership Practice at ZRG, an executive recruiting firm based in Boston. Reach her at email@example.com.
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