If you thought that chief information officers in design and construction firms today just upgraded inefficient servers or made sure the e-mail system was working, youd be sadly mistaken. These gurus of corporate information technology management are at the heart of what drives and differentiates engineering and construction firms these dayscost competitiveness, collaboration, innovation and entrepreneurship. As such, more CIOs now are valued members of the executive management team or are jockeying for a boardroom seat next to the CEO. Even so, the day-to-day pressures of keeping disparate company units connected yet secure and meeting tougher cost and profit goals is a challenge even for the most technologically astute.
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| (Photo manipulation by Guy Lawrence for ENR) |
To determine how industry CIOs are faring, ENR invited 11 executives with that title or something equivalent for a two-hour roundtable March 31 on todays technology management issues. The group, which met in New York City, represents a cross section of companies in terms of revenue, geography, discipline and market diversity.
For most roundtable participants, the CIO position is fairly new, created to harness, better manage and even deliver value from the fast-moving technology function. The job in specialty contractor EMCOR Group Inc., Norwalk, Conn., was created four years ago for the express purpose of looking at how technology was applied across our then-43 companies and developing some sort of strategy, says CIO Joe Puglisi. They wanted to make sure we had the best. Adds James Brogan, director of IT since 2001 for architect Kohn Pederson Fox Associates, New York City: My position was a new one. The focus at the time was to have more of a strategic direction on global connectivity and solutions. Its a very creative environment at KPF and having the right tools is critical for us.
Others say top management saw a practical need to keep the IT guy close at hand. You need tools leading the industry now in collaboration and processes, says Keith Authelet, vice president and CIO at Gilbane Building Co., Providence, R.I. All of a sudden you end up at the executive meetings.
At MWH, the global environmental infrastructure engineer in Broomfield, Colo., Chief Knowledge Officer Vic Gulas takes cues directly from the top. Our CEO wants to be a global leader in our core areas and deliver products anywhere in the world. That allows us to begin laying a knowledge management framework, he says. To be at the senior management table is not just part of the business, its essential to the business.
Vincent Laino, CIO at engineer Weston Solutions Inc., West Chester, Pa., says the IT function had to earn its executive status. The technology group had to prove to the rest of the senior management team that there are some values generated, says the executive, who is also chief financial officer. Once that happened, frankly, the seat at the senior management table was kind of de facto; we are an integral part of the planning process now.
HNTB Corp., Kansas City, envisioned a new profit center. The design firm wanted key hires outside of the engineering practice to create momentum in areas that wouldnt necessarily have been spawned within the organization, says Dan Wolgemuth, CIO and chief administrative officer. Speaking in business vernacular is what earned us a place in the boardroom and the right, not only to weigh in on issues related to technology, but also to our core business.
Even so, some CIOs still struggle with old stereotypes. For Geir Ramleth, Frederick, Md.-based senior vice president and CIO for Bechtel Group Inc., technology is frankly very often looked upon as a necessary evil, rather than a driver, he says. My biggest challenge has been to get costs under control so I dont have my other senior managers saying I dont know what you do, but it costs too much.
The CIOs critical role in integrating business and communication systems, particularly as more E&C firms grow through mergers and acquisitions, has shed new importance on the function and perhaps more positive light.
Patrick Thompson, CIO and chief administrative officer for The Shaw Group Inc., Baton Rouge, says integration has been his top priority in a firm that has morphed into a mega-contractor through several recent large acquisitions. Thats all I've been doing for the past two years, he says. We literally had to get to a single platform in about nine months, with about 17,000 employees and five different [corporate platforms].
Completing that mission has brought Thompsons IT function more in sync with Shaw operations. Now that we have finished that project, we have been a little nicer about approaching the business lines to get involved in some of the other technology initiatives, he says.
For Skanska USA Building Inc., Parsippany, N.J., the IT management function also was critical to running a consolidated construction business, says CIO Chris Stockley. Skanska found itself owning a series of well-run companies with independent or separate IT initiatives, he says. Interestingly, the consolidation of the company started with IT. The role was primarily an integration type role and is now becoming much more of a business function.
CIOs say that staying closer to the business units and their missions can help them bond with other company managers. Allen Anderson, CIO at C.W. Driver Contractors, a mid-sized Pasadena, Calif., firm, came up through construction without a purely technology-based background. Being able to use analogies that everyone can understand in terms they use every day, I think has really helped significantly, he says. Now, we can help people understand that there is a common place that you look for things, there are not five or six different databases or 30 spreadsheets for each project manager to turn in for the weekly or monthly report.
Adds Puglisi: You dont want to spew a bunch of three-letter acronyms or techno-babble at them. You want to take away some of their pain. They dont make any money when they are fixing their mail system.
Maintaining a lid on expensive technology also is important to cost-conscious industry firms. We all have profit margins that are [slim] and we cannot allow the cost of too much democracy into the IT side, says Bechtels Ramleth. There are other things that drive our businesses. We are part of it, but we are not the key driver. Therefore, we should be a risk avoider and not a risk attractor to these projects.
KPFs Brogan admits that a long time ago, I would sit downstairs with the IT folks and kind of just do my thing and its absolutely the wrong thing to do, he admits. Now, Im out there involved with all the projects with the folks that are working.
Keeping a low profile and supporting the business units in driving change also is key to greater corporate acceptance. The CIO role is a very unique role, in that everyone in the organization knows and looks at us [when there is a problem] that we or our technology caused, says Skanskas Stockley. But we [in the CIOs office] have done a pretty good job of building relationships and really developing transparency in our group. It doesnt give the feeling or appearance that change is being driven by IT. We try to support the goals of the organization. We try never to have initiatives, ever.
But HNTBs Wolgemuth insists that pushing marketing responsibilities on the IT function has created a bad reputation for us. He contends that CIOs ought to be listening and not selling. To the extent that we have sold without understanding problems, then weve earned the reputation that says we dont connect.
Marrying technology with business goals is key. I dont have an IT department because I didnt want technology to drive what we were doing, says Dean Kershaw, president of Titan Facilities Inc., the Niceville, Fla.-based E&C unit of Titan Corp., a technology and defense conglomerate. I wanted it to be the other leg of the stool, along with people and process.
While CIOs are at the forefront of efforts to expand collaboration among employees and between firms and their peers or clients, some worry about how to meet new demands for information security and privacy.
I have a few thousand people sitting on my network that are not our employees, says Bechtels Ramleth. We started a year ago writing a new e-mail policy, and we are still writing it because the environment is changing so fast that you dont know what to put in. It started out to be a nice two-page document; now its 23 pages. Its a very complicated environment.
Shaw Groups Thompson says that the security of his firms industry collaborations is built on relationships and the trust factor. But he also admits that a lot of times you get trust through contractual means.
EMCORs Puglisi points to new responsibilities in managing corporate information under new federal rules, such as the Sarbanes-Oxley law that stiffens public company accounting. The law shines a spotlight on the integrity of the security around systems, he says.
Panelists predict that they eventually may have to introduce tighter controls or more exclusivity in e-mail and other IT systems. But such steps may be unaffordable for some firms, CIOs say.
The role of CIOs and IT management in fostering corporate culture development and an entrepreneurial spirit generated much debate among panelists.
CIOs predictably see information systems as a first line of defense against unsuccessful mergers and acquisitions. Puglisi contends that EMCORs corporate communications network was instrumental in more quickly acclimating employees of firms it purchased. You talk about the cultural impact. This was becoming a part of EMCOR, he says.
We found that some very similar acquisitions leave organizations cultureless, says Skanskas Stockley. Any time there is that much change, all organizations have to re-sort themselves. The system plays an amazing role in giving organizations a way to communicate and to talk, but ultimately, people have to re-establish culture.
Panelists also worry about how to instill technology cost-effectiveness without harming the companys entrepreneurial spark. There certainly are economies of scale or efficiency to be gained by centralizing, standardizing and consolidating in many instances, says Puglisi. But we would never want to lose or even compromise the entrepreneurial spirit and connectivity to the local marketplace.
KPFs Brogan contends that its harder for firms to balance growing technological sophistication with risk, particularly among new hires. We are constantly trying to push things that may or may not work, he says.
Adds Wolgemuth: While you want to feed the entrepreneurial spirit, you get the sense that youre feeding the black hole. We need to [stop] throwing money into something thats way too broadly defined to actually impact the business.
Panelists offered an array of responses to questions about what keeps them up at night. Titans Kershaw focused on the overall challenge of being a technology manager because right now, IT is the future of our business. Bechtels Ramleth worries about how changing technology and demographics will affect staffing. Will we have the people available and ready to do the job that will be required in the future? he asks.
Skanskas Stockley points to challenges in creating what he calls the virtual organization. He defines this as an environment that allows for...any employee to do the job for the customer with the support of the whole organization. Creating support systems to foster that is the tough part, Stockley says.
Shaw Groups Thompson is challenged by the number of new responsibilities being added to his job, such as facilities and risk management. That diversity is stretching me pretty far, he says.
Authelets sleeplessness stems from the CIOs continuing identity crisis. You have to make sure people understand what we are doing and why, he says. Its a constant question. Puglisi is concerned that the construction industry hasnt adopted new technology fast or far enough, and in the next five or 10 years, it still wont have changed very much.
MWHs Gulas worries about how to spread technology and new ideas solidly across an organization. How do you create a process so that an idea imbeds? he asks. He also warns of too much focus on costs. At the end of five years, if all I had to show for working in this area was that I reduced costs, Id be pretty upset with myself, says Gulas. You cant optimize out innovation.
