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The New Wave of IT and the Role of the CIO
1. Chapter 1
The New Wave of IT and
the role of the CIO
Booking an airline ticket was a surpris-
ingly manual process before the mid-
60s. Booking agents used handwritten
tickets and chalkboards to allocate
seats on upcoming flights. But in 1965,
American Airlines launched Sabre, a
computerised booking system that
used two mainframes, a thousand
terminals, and a million lines of code.
It could process 40,000 reservations
a day, turning IT into a competitive
advantage for American Airlines: It
needed fewer employees and offered
better customer service than its rivals.
The mainframe era was a revolution for
business as one company after another
automated paper-based processes. But
the underlying technology – mainframes
and the software that ran on them – was
the exclusive preserve of a high priest-
hood of engineers and the companies
that could afford them.
The PC era changed that. It ‘democra-
tised computing,’ according to pundit
Nicholas Carr, and it ‘liberated the com-
puter from corporate data centers and
IT departments turning it into a universal
business tool.’
This process of democratisation turned
computing to a commodity. The result?
‘IT doesn’t matter,’ said Carr in his
2003 Harvard Business Review article
of the same name. If everyone used
the same systems and ran the same
software, how could they differentiate
themselves? In other words, there were
no opportunities left to repeat American
Airlines’ game-changing innovation
using IT.
If IT was a commodity, then IT chiefs
were in danger of commoditisation too.
The IT department’s job was to keep the
servers humming, to keep the PCs run-
ning, and to deliver annual budget cuts.
For a while it looked like the role of the
CIO had been indefinitely determined.
The last few years have changed all
that, forcing a re-examination of the
CIO role and contribution. We’re going
through another IT revolution now,
driven not by a single innovation but by
several. The most disruptive technolo-
gies over the next decade, according
to a Gartner survey of CIOs, are mobile
(70%), big data/analytics (55%), social
media (54%), and the cloud (51%).
These new technologies are not only
changing IT, they are changing busi-
ness itself. For example, car compa-
nies don’t just compete with other car
companies. They compete with social-
media-inspired, cloud-hosting carpool-
ing services (for example, BlaBlaCar),
taxi and limo apps on smartphones
(for example, Hailo and Uber), and
hourly car rental services (for example,
ZipCar). Size, incumbency, and a long
history are no defence against the new
digital insurgents. This new wave of
innovation will make all IT infrastructure
a commodity, perhaps even a function
of purchasing or facilities management.
Companies will need to embrace new
technologies in different ways, picking
and choosing the right combination to
meet individual business needs.
