Undressing for the Future

Trust me, these vignettes have less to do with speculation than they do with inevitability. What responsible adults call transparency, and less couth managers might describe as bare-naked exposure in compromising positions, will soon become a distinction without a difference. This view of the future ain't pretty, but CIOs had better manage it . . . or else.

The natural extension of supply chain management, customer relationship management, and compliance with Sarbox and the USA Patriot Act is that enterprise IT infrastructures are invaded and penetrated by external networks, databases and software. This is what tomorrow looks like. Transparency implementation - whether internal or outsourced - becomes something that must be deployed in collaboration with key customers, suppliers and (ahem) other constituencies. There is no alternative.

The CIO's role, with colleagues in general and lawyers in particular, will be to negotiate both internal network access and its implementation protocols. In other words, CIOs will have to be in the room when these deals are cut. They'll have to be in the room when the nasty and niggling details of implementation are hashed out. This won't be fun.

The only thing more difficult to craft than access policies will be access implementations. Doubt that? Look at the ongoing litigation (Eliot Spitzer's suits are just one example) in both the criminal and civil court systems in the US regarding search warrants and discovery. Admittedly, those proceedings are inherently adversarial. Then again, if you think negotiating access with your rivals is painful, negotiating access to - and with - your customers, colleagues and partners is even worse.

Why? Because CIOs will be the ones held accountable if the costs of invasive transparency outweigh its benefits. The lawyers always find a way to wriggle. Hammering out service-level agreements for transparency is guaranteed to become far more difficult - and far more important - than hammering out SLAs for outsourcing to Bangalore. To be sure, CIOs can't - and shouldn't - negotiate them on their own. But managing the SLAs for transparency portfolios will increasingly consume greater portions of CIO time.

When a Wal-Mart, GE, GM or, let's say, your bank decides that it wants enhanced access to your purchasing, inventory control and cash management systems . . . or else, it's not immediately clear whether this makes the CIO more influential within the enterprise or a C-level eunuch.

My own belief is that extreme transparency turns CIOs into very influential eunuchs. "We had no choice," says one CIO for a supplier who had to open the corporate kimono wide for his company's biggest customer. "We felt like we were going to be violated. But it was interesting. Most everybody was willing to share the data. What we were really afraid of was sharing network access. They could see what we were doing as we were doing it. That freaked the line managers out."

So what happened? It's still too early to tell. But one interesting side effect, says the CIO, is that "people don't write long e-mails any more, and they're more matter-of-fact. I've found a couple of managers who now use their AOL accounts to send messages they don't want the customer to see."

The notion that greater transparency may prompt informal horse-trading (what economists like to call grey markets) in information exchange shouldn't surprise anyone. But guess who will become responsible for monitoring them? That's right: the overextended, naked CIO.

While the lawyers, the board and the CEO will have ultimate say as to what constitutes proper transparency policies, this nonoutsourceable trend can't help but make the CIO a more intimate part of the executive team. That said, CIOs had better be prepared to help their organizations honour the Golden Rule of Transparency: "Network unto others as you would have others network unto you."

Amen.

Michael Schrage is codirector of the MIT Media Lab's eMarkets Initiative. He can be reached at schrage@media.mit.edu