When James McPartland took on the CIO role at Torchmark Corporation in 2014, he had a big task before him: Show the rest of the business that IT could help drive growth.
The Future of IT for CIOs: Essential But Not Sufficient
Part Two of our second roundtable conversation with Enterpriser CIOs.
- Tim Elkins, EVP/CIO, PrimeLending
- Lee Congdon, CIO, Red Hat
The following is the second article in a two-part except from a recent roundtable conducted by The Enterprisers Project. Here, we continue to discuss the both the “best of times” and “worst of times” argument about the age of the CIO and highlight some of the core issues.
The future of IT: essential, but not sufficient
The Enterprisers Project: As we mentioned up front, Gartner recommends that companies need to selectively retire low-impact systems and aggressively change IT cost structures in order to make this age of the CIO real. What are you both doing here?
Tim Elkins: I’ve been here five years. One of my first jobs here was to set up our own Exchange environment and our new loan origination system and that’s because some of that was run by our bank prior to me getting here. When it comes to legacy systems, I have retired just about every one of them. That’s unique here because a) we didn’t have anything, in some cases, and b) we have grown 500 percent over the last five years, if not more, and it’s all been new technology we’ve been putting into place. I think I’m in a fortunate spot.
Lee Congdon: I think I’m in a fortunate spot, too. We have a very homogeneous infrastructure on our own products. Our acquisitions have been of a size that we were able to quickly move them onto our systems rather than retaining duplicate systems. We have also been fortunate in that we have had the resources to continuously upgrade the hardware, the software, middleware – and the apps, for that matter. Still, I would say we have relatively little legacy equipment and applications. We are somewhat forcing that issue as we move toward cloud technology in that, by buying software-as-a-service apps, the vendor does periodic upgrades and it forces us to keep a cadence rather than fall to the temptation of no longer keeping systems current. That combination of things, discipline on the internal system side and taking advantage of the forced upgrades on the software-as-a-service side, are serving us well right now.
Tim Elkins: The core system we put in, our new loan origination system, is also software-as-service and it takes a lot of strain off of us. That’s a good point.
The Enterprisers Project: In closing, would you agree that this really the age of the CIO? Or would you say that IT is just becoming a part of next-generation companies in such an integral way that you wouldn’t even pull out IT or the CIO any longer?
Lee Congdon: I would lean toward the latter view, but I do think that a key element is IT. Just as finance and human resources and legal and other professions have matured over time, I would expect that we’ll see continued maturation in those basics. At the same time, I absolutely agree that because we are making this transition from an industrial age to an information age, that many enterprises will need to have information at the core of what they do. Having that base IT capability to deliver projects and solutions will be essential, but not sufficient, to be able to compete successfully in the future.
You are also going to need everybody in the business to understand the capabilities of the technology. You are going to be looking for opportunities to disrupt your competition or to provide better services for your constituents or better education for your students, whatever it might be, based on the capabilities of technology to a much greater degree rather than simply digitizing traditional processes. And so, given that, there is an extra bit that just about everybody needs to do over and above what I’ll call traditional IT. So even as you are maturing in those traditional capabilities, you need to be rapidly expanding and thinking differently in this brave new world.
Tim Elkins: I think he put it very well. I think IT is the business now. Today you can get a mortgage from just about anywhere and they are going to accomplish the same thing. You think as a consumer, I want a mortgage from someone with a low rate or the terms that I want. But honestly, we can all hit the same mark, especially with Consumer Finance Protection Bureau compliance coming down. We are all doing the same thing. It’s a commodity. We have to look at what can be – how can we be different? How can we be better than someone else? And everything that we are approaching is technology related, direct to the consumer. How do we make that consumer’s experience better? How do we provide them more transparency? How do we provide them access to data? I think technology is your competitive advantage but in the center it is also the business as well. The business is completely run by the technology in all facets today. When I first entered the mortgage space 20 years ago, that wasn’t the case. Technology was not the center of the mortgage – it was typewriters and all kinds of manual tools. Now, it takes far fewer people to do it and it’s all based on technology. We have a core system go down and the company’s down. We look at it as how we run our business. It is our business and it’s also our competitive edge.