CIOs must seek out the hidden pockets of ROI, or else run the risk of leading business down the garden path.
It takes a brave organization to defy its own and its competitors' established norms by opening up its valuable knowledge base to the rest of the world - including its fiercest competitors. So there was considerable surprise and not a little bit of controversy when the University of Pennsylvania's The Wharton School decided to make one of its most valuable research tools, the Wharton Research Data System (WRDS), available to rivals.
But the strategy, according to Wharton CIO and head of Wharton Computing and Information Technology (WCIT) Gerry McCartney, has been hugely successful, not only in turning competitors into customers, but also - by turning technology into a major selling point - in giving the school an edge in the ongoing battle to attract star researchers. The proof is in the number of new faculty demanding of other top schools that they purchase WRDS - if they sincerely want them to come on board.
The success of the WRDS strategy is the perfect exemplar of a message McCartney has taken to preaching to fellow CIOs: that to score points with their CFO and to fulfil their mission effectively, CIOs must constantly seek out the "low-hanging fruit" when hunting down hidden pockets of ROI.
This was McCartney's topic at the Forbes CIO Conference in California in early December. He says "low-hanging fruit" are those projects that can be done without first having to radically re-engineer the organization - in other words, where the benefits can be gained from within the existing cost structure. These ensure easier pickings than fruit "higher up" because the latter implies large amounts of preparatory work (additional funding, major reorganizations and reallocation of large amounts of resources) before any major new implementation could even begin.
"While every organization likes to think they do things in a unique way, the fact is that similar organizations have similar problems and opportunities," McCartney said in a recent interview with CIO magazine. "In our case it was supporting large-scale quantitative research. For the airlines, as another example, it is booking customers.
"What the CIO should look for is ways to master a process that is 'essential' to the core mission of their type of organization. If they do truly master it, they can then sell that process to their competitors or use it to drive their competitors out of business."
Wharton has done just that. WRDS, which the school describes as "an intellectual descendent of the school's early research in 'heuristics', a computer-based information-intensive method that substituted data processing for mathematical manipulation", but which McCartney likes to call a "data supermarket", was developed by Wharton's Computing and Information Technology department. WRDS includes stock prices and returns for more than 6500 companies, S&P data on 7000 publicly-held companies and macroeconomic data back to the 1920s.
The comprehensive Web-based data management system allowing easy retrieval of information from a wide variety of financial, economic and marketing data sources, has now become a vital tool for many of the US's most prestigious business schools. In fact the program is so desirable 75 of the world's leading business schools are prepared to pay Wharton $US30,000 a year for access.
US CIO magazine last year honoured Wharton with an Enterprise Value Award for using WRDS to extend the value of its brand by turning its competitors into customers and making business school faculty around the world more productive (see "Best in Class", page 54).
"The value they're providing is not just to Wharton but to research in [other] universities," says Doug Barker, CEO with Barker & Scott Consulting in Washington, DC, and one of the year's Enterprise Value Awards judges. "[WRDS] is realizing the promise of a networked world." And Patrick Harker, Wharton's dean, acknowledges its success. "We know we've crossed this magical line when junior faculty at other institutions are saying that a condition for them taking their jobs is having access to WRDS," he says.
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