What do CEOs know?

Do CEOs get IT? That’s IT, as in, Information Technology.

Do CEOs even care?

I’ve devoted a lot of time in large part to answering a question that has vexed and perplexed me for quite some time.

I do know that quite a spectrum of opinions exist.

Recently I spoke with Geoff Smith, CEO of Ellis-Don, a commercial real estate developer based in Toronto. They are responsible for such notable projects as the Rogers Centre, the Art Gallery of Ontario, London’s Canary Wharf and many others.

Smith believes that more than just contribute to business efficiency, IT is transformative and can translate into competitive advantage.

“The construction industry is all about information,” he says. And that is why Smith pays close to attention to his software systems.

The company, for example, built a complex application called Edgebuilder that it uses to automate all the documents and processes around construction management. It also takes advantage of the Internet to communicate with its thousands of contractors and hundreds of consultants located at job sites and offices everywhere. As simple as the concept is, the system took years to develop but is paying off handsomely.

“It is hard to measure,” he concedes. But over time, he maintains it has doubled their volumes but their overhead is the same, and IT gets some of the credit.

“Why the rest of the industry is not adopting IT is a mystery to me.”

This is a powerful testimony to the use of IT, but Smith is probably the exception to the rule. And despite what the surveys say, most CEOs are not as yet paying attention to IT in any substantial way.

The reasons for this are numerous. I will wildly speculate and list just three:

1. IT shows up as only one to five per cent of the total operating budget. Why pay attention to something that does not represent a large expense.

2. When broaching the topic of IT and CEOs, it’s usually in context does your CEO a PC or laptop, does he prefer e-mail or voice mail and seldom is it conversation about how you can use ERP to attack your inventory problem or use collaborate technology to build a real-time supply chain.

3. IT is still enduring a dismal reputation brought on by huge project failures of the ’90s, the Y2K farce of 2000, the dot-com bust earlier this decade, anyways, you get my drift.

So what do you think? Will CEOs finally pay attention? Are CIOs helping or hurting their cause? Are brighter days ahead? Stay tuned.

Martin Slofstra is the editorial director of the ITBusiness Group

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