CIOs know how to maximize that IT dollar

October 8, 2001

BY MICHAEL KRAUSS

Chief Information Officers are undiscovered bellwethers.

When I want to understand the trends in information technology, I often turn to this underappreciated target audience, and so should you if you're a marketer interested in technology and in getting ahead.

In the early 1990s, my CIO friends said the Internet would offer plenty of opportunity. Marketers who listened led movements in their organizations and were promoted ahead of their peers. They connected customers to their companies using a plethora of new technologies.

So what's on the minds of CIOs these days? One common refrain is optimizing last year's investments in Internet technology. The information systems department is looking at all of last year's spending on hardware, software and services that was supposed to yield business advantages, and its executives are working overtime trying to figure out how to deliver results. They're standardizing and synchronizing processes and technology platforms so that last year's promised benefits become this year's bottom-line realities.

Consider Ergin Uskup, CIO of Des Plaines, III.-based United Stationers Corp., the largest wholesaler of office supplies and equipment in the United States. Uskup is a 28-year IT veteran and has seen a lot of technology trends come and go. Today, he's responsible for a 270-person information systems function in a $4 billion dollar wholesale distribution company.

What keeps Uskup up at night? Not much. He's still doing what he's always done: leveraging technology in practical ways.

"Most people in traditional companies are still figuring out how to align technology with their company's long term objectives," Uskup says. "Lots of different technologies have evolved, but in the final analysis, CIOs are focused on applying technology for competitive advantage."

As a distribution company, achieving customer satisfaction and minimizing cost are two of Uskup's business aims.

"From where I sit, not a great deal has changed," he adds. "Technology can help us be responsive to customers. It can help us achieve quality. We can also improve efficiency and reduce cost through technology; minimizing cost is one of our tenets."

Sharing IT services across multiple business units is one of the ways Uskup hopes to achieve this year's cost reductions.

"With our noncustomer-facing systems-- financial systems, HR systems, e-mail, networks, voicemail-our standards and our vendors ought to all be the same. Instead of having three different inventory management systems across three business units, you could get those systems consolidated. We have an initiative that looks at just that," he says.

"Eventually, we get a buying advantage, (and) we can increase our profitability," he says.

During the expansion of the late 1990s, companies often grew by acquisition. Decentralized management structures were common, plus there was an explosion of new technologies adopted throughout the enterprise. Today's CIOs have their hands full rationalizing these purchases, bringing order to the chaos and delivering the anticipated financial benefits.

"The key thing is to eliminate confusion," Uskup says, "and to ease the transfer of data from one division to another. Minimally, what makes sense is to address those areas that deal with data and communications issues and try to make those things common and standard."

Uskup's been involved in linking organizations and their customers since the early days of electronic data interchange. Maybe that's why United Stationers isn't feeling the dot-com hangover; it was heavily invested in being an e-commerce company long before it became fashionable. In 1994, 84% of United Stationer's orders came in electronically from customers' computers. Today, that portion is 93%.

Of course, Uskup doesn't expect to have his name up in lights like the many dot-com millionaires who have come and gone these past few years. He's the president-elect of Chicago-based Society of Information Management (SIM). Like most successful CIOs, he's a pretty low-key and reserved fellow. That doesn't mean he's any less innovative, just more pragmatic.

Uskup's started a new division called United Stationers Technology Services that, with him as its president, is mainly focused internally but also provides operational effectiveness services to United Stationers' customers. My guess is they'll be happy to have support from such a seasoned veteran as Uskup.

What does this mean for marketers? While it's nice to go long for touchdowns from time to time, we'd better not forget that fundamental conditioning and basic blocking and tackling win games. Synchronizing our back-end systems and achieving operational effectiveness may not feel glamorous, but it can have some powerful bottom-line benefits.

Tomorrow's promotions are going to go to the marketers who lead these kinds of projects, not to the MBA who creates a new e-commerce front-end system. They were yesterday's heroes.

Michael Krauss is a partner with Chicago-based DiamondCluster International. He can be reached at news@ama.org.