Enterpriseleadership.org recently sat down with Peter High, founder of Metis Strategy and author of the book World Class IT: Why  Businesses Succeed When IT Triumph.  Peter talks about the changing roles and importance of CIOs within a business's infrastructure.

EL. What motivated you to write a strategy book for enterprise IT?

PH.  For years, CIOs ranked as second-class citizens in the corporate structure. During the past decade, however, the best CIOs have recognized that they occupy a unique perch within that structure. Their relationship with the business units (like Marketing, Operations, Finance, Human Resources, Operations, and the like) can often times run deeper than the relationship the business units have with each other. As a result, the best CIOs can leverage this relationship to add value and to build the top and the bottom line of the corporation. Likewise, they can drive innovation, as it is prudent for them to engage the very players that are mentioned . I have seen many cases where having the right IT leader in a well-oiled organization can help to bring a diverse group of people to talk about innovation on behalf of the company and on behalf of the customer. Thus, the CIO can facilitate a level of collaboration that does not normally happen. We are on the cusp of a real boom in the power of the CIO role. In fact, more and more CIOs are taking their rightful place as true peers of the other C-level leaders in the organization.

EL. Have you come across organizations that have separate IT innovation groups?

PH. Harrah's innovation group, for example, evolved from IT into something separate. In the beginning, many of Harrah's IT people populated this innovation group. As time went on, it drew from people across the organization, in areas such as Operations and Gaming Products. Tim Stanley, Harrah's CIO, was chosen to head this group. As the story goes, during a meeting with the CEO and other executives, Stanley wrote down on a note that the company needed an innovation team. He added a P.S. that he did not want to be the head of the team, however. The CEO convinced Stanley to assume the other "CIO" role- chief innovation officer-as well. As time evolved, the group had a link to IT through Stanley. The separation from IT gave the innovation group a separate degree of visibility. Stanley spent two days a week on innovation and the other three days on IT and product development.

EL. Can you tell me what Harrah's innovation group accomplished?

PH. It developed many innovative ideas that were new to the industry.  They worked on a virtual roulette project in which a dealer spins the wheel and gamblers place bets in front of a bank of screens throughout the casino rather than at a table. It's potentially a more efficient--and profitable--way of gaming.  Other innovative ideas that have been written about elsewhere include server-based casino gaming machines, leveraging Microsoft's Surface tabletop computer, and computer systems to control hotel room functions through televisions.  It all begins with IT's incredible gathering and synthesis of data, be it customer or company data.

EL. Do most of the companies you work with use some sort of an IT maturity index?

PH. Different organizations operate in different ways. Many organizations use CMMI and other means to determine where they are relative to best in class. The methodology described in the book World Class IT- with the five principles [people, infrastructure, project & portfolio management, IT & business partnerships, and external partnerships] and thirty sub principles, represents a maturity model of sorts. It depends on the number of principles and sub principles the organization uses to operate at a high level. We use a traffic light system to grade our clients. The higher percentage of those that are green and the fewer that are red suggest a greater level of performance and a greater level of maturity.  The best organizations have some means of evaluating how they are doing relative to a broader benchmark.

EL. Have you come across many organizations that have automated the IT management process for governance, where the organization has a common language across the organization?

PH. Many organizations have invested in systems to help with the management of all of their projects, to help determine the true business value of the investments they are putting together. Since high-performing organizations tend to grow very fast, the processes and tools do not necessarily grow at the same pace. Much of our business focuses on helping organizations measure the true business value of their investments. We have worked with some organizations that have gone from collecting data on spreadsheets to more automated, globally available methods, which both IT and the business units can use.

EL. Can you give me a historical account of how some CIOs have earned a "seat at the strategy-setting table," so to speak?

PH. In the 1980s, the best IT organizations could find ways to automate manual processes, and along the way cut costs for the company. In the 1990s, we began to see a greater number of organizations, , where IT began to weave itself into the knitting of the business. These IT-developed capabilities that helped to enhance revenues, such as customer relationship management databases, also helped to develop products that the Web could deliver, such as e-commerce. Within the last decade, and I believe to a greater extent in the decade ahead, a greater number of CIOs recognized that their strategic perch within the corporate structure allowed them to impact the overall strategy of the organization. Again, the strategic insights they garnered due to their relationships with the business leads to insights that in some ways they are better positioned to point out and articulate than the business units are themselves.

EL. Can you give me an example of an organization where the power of the CIO really helped to turn things around for the business?

PH. In the book, I reference an airline coming out of Chapter 11. During the course of the proceedings, this organization thought it was cutting costs dramatically throughout the organization. It also recognized that IT was a facilitator for that cost cutting, and as a result, IT was asked to cut its costs. However, the demand for IT services kept increasing. The CIO at the time highlighted this fact, and provided the rationale to ensure that the business leaders present their needs and plans for the future in a similar manner. By creating plans that were presented in a like fashion, and by presenting them together, there were strategic advantages that went well beyond solving the demand management issues highlighted by the CIO.  There was greater understanding of priorities across the company, and there was better collaboration and even the elimination of redundant efforts as a result.  IT can take a good portion of the credit in solving this issue.  This is just one of many examples where we see IT going from being an order taker to being a key driver of the strategic conversation.

As a result, IT can now push, pry, affect, and develop new aspects and wrinkles to the corporate strategy. They can eliminate waste by finding like needs across different divisions of the organization and attack those together. I see this capability as one of the emerging business values that IT will continue to have in the decade ahead. It is important to note that this requires a new type of IT leader.

EL. What type of a career path do you see for a CIO who can use IT to deliver greater business value to the organization?

PH. The organizations that develop these types of leaders will realize a tremendous amount of benefit. It is important to note that businesses as diverse as Walgreens, Schneider National, Ameristar Casinos, Drugstore.com, and Network Solutions have or had CEOs who were once CIOs.  A 2007 article in Baseline magazine included a survey that found that 56 CIOs had advanced to more senior business positions. Many on the list became CEOs as well as chief financial officers and chief operating officers.. This should be an encouraging message for those who once joked that "CIO" stands for "career is over."  Now it is just the beginning in many ways.

EL. In your dealings with CIOs, how have the best IT executives communicated business impact?

PH. Again, it gets back to this historical misunderstanding because of the differences in education, language, career path, and the like between the IT organization versus other departments. IT has always had the reputation of being the bastion of engineers who operate in a different and foreign manner. IT leaders have traditionally been more comfortable operating in "ones and zeroes" as opposed to "P&Ls."  This chasm has kept IT from securing a seat at the corporate table to present business plans and business value, or the projected ROI on the investments they are planning to undertake. Today we are seeing a confluence of many different issues - everything from increased knowledge that many companies are getting more value from IT, to a younger generation of business executives who are more curious and knowledgeable about IT. This younger generation will give way to a new breed of CIOs who are well-informed technology business leaders.  These are the so-called "digital natives."

Because of the economic downturn, organizations want more visibility and transparency into what they are getting from their investments. IT continues to comprise a large share of many capital investment portfolios. As the overall governance of the organization increases, IT will get its share of scrutiny, and CIOs need to be able to speak like any other business unit head as to the value that is expected from their portfolios. All of these factors are leading to a changing paradigm.

EL. How do the best CIOs communicate business impact with their peers in the business? 

PH. Sometimes they have their own communications department. Many organizations are taking people from the corporate PR department and placing them in IT to develop communications programs specific to IT. Before attempting this, however, we advise that CIOs define the right metrics. Developing the dashboards of how IT is performing and then communicating them is key.  Again ,the five principles and thirty sub-principles presented in World Class IT are just such a framework in which to do this. This involves everything from the performance of IT people as judged by business partners to the availability of infrastructure to the degree to which projects are delivered on-time, on budget, and on scope to the ability of IT to delivery business value to the performance of the external partners.  The book introduces both introductory and advanced metrics for IT to leverage and to communicate.  This constant flow of information will increase the confidence and understanding that the business has in IT.

It is also imperative that IT executives be honest about where there are issues. For example, where performance metrics are trending in the wrong direction, it is important to highlight this, but also to highlight how this will be resolved.  Business leaders don't expect IT to be perfect, but they do expect them to be on top of their domain.

Dashboards are an effective communications vehicle, as they provide a good way to communicate a lot of information in fewer pages.  This type of communication can help to increase the curiosity and scrutiny the business community has about the IT community.  I call this the "burning of the ships event" - there is no way back to the old world once you have done this. You have to stay in the new world where the business is better informed and will have a greater desire to remain informed. Once you begin to communicate this, you begin to put positive pressure on the IT department to perform at a higher level, constantly improving. Once you begin to open the kimono on all the things the organization is undertaking --  how it is performing, and where the warts are - you will find more of an appetite for that continued conversation.

Elizabeth M. Ferrarini is a technology writer from Boston, MA. You can contact her at elizabethferrarini@yahoo.com.

Today's enterprise has a ravenous appetite for information, and mandates such as Sarbanes-Oxley require longer retention for even more kinds of data. Standard storage devices are reaching their limits. Enter something entirely new in the storage arena: holographic storage. This new technology promises to store previously unheard-of amounts of data efficiently, and to enable speedy access.

Sound too good to be true?

Enterpriseleadership.org recently spoke with Kevin Curtis, chief technology officer of InPhase Technologies, a developer of holographic storage, about how it works, how (and why) it was developed, and what it can bring to the enterprise. For both businesses and consumers who need to keep their digital-data houses in good order, holographic storage might just be "the next cool thing."

EL: Can you tell us about yourself, and about your company, InPhase  Technologies?

KC: I've got a bachelor's, master's, and a Ph.D. from the California Institute of Technology in electrical engineering. I've worked about 17 years in holography and optics at Caltech Northrop and Bell Labs. At Bell Labs I was the project manager for the holographic storage project at Murray Hill; from this group, InPhase was formed in 2000.

EL: So, InPhase Technologies was actually a spin-off of Bell Labs,  with the aim of developing holographic storage technology?

KC: Yes. We were very focused, and put together a great team at Bell Labs and at InPhase to work on all the technical, and the business and marketing issues.

EL: What is holographic storage, and what are  the benefits it will bring to the enterprise?

KC: Holographic storage is similar to an optical disk, like a DVD or a CD, but it's actually designed to go into automation systems. Instead of holding 4.7 gigabytes like a DVD, the first-generation holographic storage disk will hold 300 gigabytes and will transfer it at the rate of 20 megabytes per second. And, that's the first generation: we've actually designed three generations of product going out to 1.6 terabytes on the same disk and it can be read at 120 megabytes per second. The disks are all plastic, there is no metal there, and they've been tested for 50 years archival lifetime. They're very stable, and they can be manufactured inexpensively. So, the primary market for this technology is corporate long-term archival storage, for those who have digital assets that they want to keep for a long time.

EL: Could this technology replace the tapes that are being used for  data storage now?

KC: Yes; tape systems are really designed for, and the market for them was, backup. Data backed up in this manner is not meant to be kept for very long. Archival storage means storage for seven, or 10, or 50 years. But in the case of the professional video marketplace, for example, or compliance, or medical marketplaces, you're required to keep digital data for very long periods of time. Holographic storage offers a very unique combination of the robustness and random access of an optical disk with capacity that's more akin to tape.

EL: What was the genesis of this technology?

KC: The concepts behind this technology go back at least to the mid 1960s, and there was a lot of work in this area, including at Bell Labs, in the late 1960s and early 1970s. But there were some fundamental issues that couldn't be addressed then in terms of components and media. In 1994, Bell Labs decided that you could actually buy enough of the drive components to be able to put together a system, and then try to figure out what was needed for media. We've now made tremendous advances in media by developing a unique, two chemistry photopolymer material. We came up with a way of manufacturing the media at a low cost, to multiplex and record holograms at high density, and to enable recovery in a very robust manner. That's the genesis of the basic technology.

EL: Using holographic storage technology, how easy is it to not only gather, but retrieve large quantities of information, quickly?

KC: That is one of the advantages of a disk versus a tape: a disk has random access. For completely random access, this disk functions at a speed that's similar to your CD or DVD, around 250 milliseconds. But the technology offers a unique characteristic: inside a rather large body of data -- say about 150 megabytes -- you can have two-millisecond access to data inside a particular field. It's a unique combination. And, you certainly do have random access, and once you get that, you can stream it out continuously at 20 megabytes per second initially, and this speed will be increasing to up to 120 megabytes per second with future generations. The one thing that's unusual, at least for disk, is that those are sustained rates. Often, with CDs and DVDs, and other disks, they spec just the outer track, which spins faster than the inner tracks. And so the actual rate that you see on a CD or DVD is much slower than the actual spec. Our rates of speed are actually continuous, sustained across the entire disk.

EL: Can you talk about data security and holographic storage?  Are security issues similar to those for other storage technologies? 

KC: Yes, especially for removal of media. This has garnered a lot of attention lately: As the capacity of these media goes up -- whether it's a tape or a disk -- somebody could, potentially, walk out the door with a lot of data. Every company that's in the data storage field is considering encryption. And the format that we've implemented for our device certainly supports and anticipates encryption use.

In addition, the first generation technology, particularly for archive, is worm technology, meaning, write once, read many times. It actually cannot be erased. That's often very important, legally, for record authentication.

Compliance and Holographic Storage

EL: Gathering and storing certain data is also required for regulatory compliance. You touched on that when you talked about medical compliance.

KC: Yes. Five years ago, archival storage was the ugly stepchild of storage. Now, it's coming front and center as a critical and very rapidly growing issue. That's a real problem, because tapes and other technologies weren't designed for long-term retention. That's where we see a good opportunity for holographic storage to make a difference. Both e-mail and e-mail attachments now have to be kept for a very, very long period of time. Both the medical, and the financial industries, for example, have significant data archival requirements. And, Sarbanes-Oxley is a very significant factor.

Our technology's also getting a lot of attention in the professional video space. More and more content is being filmed in high-definition digital format, which increases the difficulty of storing it.

EL: InPhase is currently focusing this technology as it is relevant for the corporate customer. But do you foresee moving more into the consumer market?

KC: Absolutely. We actually have two projects to develop holographic consumer products that are being funded by major companies. One product is a holographic, read-only memory, like a CD-ROM or a DVD-ROM. Essentially, it's a very small card that could hold maybe 50 gigabytes that can be replicated very quickly. In optical media, the real advantage of optical storage has been in the ability to quickly replicate the content so that the cost of distribution is very, very low. We've developed a mastering and replication process for holographic that allows us to do the same thing: we can replicate content and distribute it. This could be for games or any sort of video or video content. You can have a very small drive with huge capacity that can be distributed very, very inexpensively.

The other project that's being funded by a major company is translating professional recording technology into technology available to consumers -- like the next generation after Blu-ray or HD-DVD -- something we can make very small and inexpensive.

EL: What about the cost of your technology?

KC: For professional products, we have to do a tremendous amount of testing, and the reliability is really critical. So certainly, that adds cost -- and, this is the first generation. Initially, we're looking at drive prices of $18,000 and media prices for 300 gigabytes of about $180. These compare quite favorably with tape prices, particularly high-end tape prices. Video professionals are used to that. Now, for a small business, that's quite an expensive piece of equipment, but we feel that this is an initial launch price. With volume, our pricing can come down into the small business price range.

EL: Enterpiseleadership.org did an interview some months ago with the chief technology officer from another corporation. We called the interview "The Next Cool Thing," because this CTO talked about certain emergent technologies that he felt would lead to big paradigm shifts. In that spirit, could holographic storage technology be called "the next cool thing"?

KC: There are two points to be made here, at least. One is that archiving for both the consumer and professional is now becoming a really significant need. Our technology has some unique attributes that can satisfy this critical need -- that's quite important for business. Also, this is a new approach: storage does not require a spinning disk. There are new consumer formats, particularly for distribution, that can be enabled because of this technology. Very small devices -- 50 gigabytes on something the size of a postage stamp -- can be replicated very, very cheaply. I think that really could enable some very cool consumer applications.

"Never compromise integrity" has become a long-standing principle of the $44 billion Chubb Group of Insurance Companies. Chubb offers both commercial lines and personal lines of insurance through its 120 offices in 29 countries.

Everything about Chubb propelled June E. Drewry, a 30-year IT veteran, to come out of retirement in 2005 and become global chief information officer of Chubb & Son, the organization that oversees the management of the Chubb Group of Insurance Companies. She has held IT leadership positions, including CIO, at Aetna Inc., Freddie Mac Corporation, and the Aon Group. She also has received numerous IT leadership awards from organizations, such as Women in Technology and SIM.

While Drewry's predecessor did a great job running the IT organization, she, nevertheless, faced several challenges: improve the IT governance model, drive innovation, and make sure her successor could fill her shoes. Enterpriseleadership.org recently spoke with Drewry to discuss how she's carrying out these tasks, along with her involvement in IT organizations and what she learned from September 11, 2001. Here's what she had to say:

EL: What's the leadership structure of your IT  organization?

JD: Our organizational model mimics Chubb's decentralized federated model, which consists of three business units. We have 1,500 IT employees who are managed by three geographical (or zone) CIOs, three business unit CIOs, one CIO for finance, and another CIO for claims. Each CIO, naturally, has a group of direct reports. A shared service manages our IT infrastructure for the U.S. Collectively, these CIOs comprise my senior IT leadership team.

EL: Can you describe how IT handles business process  improvements?

JD: We don't have a formal program for it. Our applications folks are embedded in our business units, and our IT federated model mimics the company's federated model. We do have centralized core resources that look at the leverage of things across business units, such as using a significant process or eliminating processes or workflow. If we have a particular benefit in one area, we then use the core staff to make sure we're exploiting it across the business units.

EL: After you joined Chubb, the company went to a more formal  governance model for IT. Why did you need to do this?

JD: I got used to joining companies where the relationship between IT and the business units needed improvement. Chubb presented a different scenario: IT had good alignment with the business units. Our work quality was high; projects got done on time and on budget.

My first task as CIO included getting all my CIO leaders together and finding out what our next challenges were. We agreed to work on enterprise-wide efforts. Some of our work had become captive in the business units. If we were going to get a real payback from IT, we needed to develop our enterprise architecture. It had to enhance our ability to leverage without having to re-platform. We also wanted to bring the business unit leaders together to do their strategic planning and to leverage technology. Specifically, we didn't want to find out individually what each business unit was trying to accomplish and then go off and do it in the background. This new process enabled us to bring IT governance and business governance together in the same room.

EL: How does your governance model work?

JD: We meet more often than IT organizations in other companies. In fact, my peers in other companies say it's unusual to meet as often as we do. Because it was so hard to plan, in 2006, the senior IT leadership team started to meet once every week for several hours. We meet every two weeks for a couple of hours more. Then, we meet off site once a month for two-and-a-half days. During this time, we go through the formality of governance where we review technologies and begin to push them further along. We're not allowed to discuss the day-to-day status of upgrades. That's a waste of our energy when we're off site.

EL: How do you keep track of projects for all of these  meetings?

JD: We have a dashboard. It's not a balanced scorecard. Some of our business units have their own balanced scorecard where they look at people, process, and technology. We look at a set of projects we've initiated as a group. We have a subcommittee that works on this weekly to keep things moving between those two-and-a-half days.

EL: Anything else you can say about your governance  model?

JD: Based on all of our industry reading and research, we learned that the IT governance process was the first step for getting things done right. So, if this was the case, we decided to run our service-level-agreement efforts through the governance process, along with our enterprise architecture and our creation of centers of excellence.

EL: Do you use any formal quality best practices, such as Six Sigma,  in IT at Chubb?

JD: Within IT we're not working on Six Sigma. Instead, we've identified those best practices used by each business unit or by the IT groups that support those business units. Before we can standardize on these best practices, we need to assign someone to make all of the business units aware of them. To this end, we can create a center of excellence to accomplish this task.

For external best practices, we belong to several networking groups where we have a different person represented at each one. This approach has created a broader network for us and more development opportunities for each group representative.

EL: Can you go into more detail about your center-of-excellence  concept?

JD: We've mandated functions such as risk management or payroll. Our shared services organization runs specific functions on behalf of the business units. They can't go outside the organization for these services. That's how we derived economies of scale in the U.S.

Then we have centers of excellence where we create areas that reside in a business unit or in corporate. For example, a center of excellence might support a pilot project in a business unit. We know there is a payback, but in the meantime, the group needs to educate others. We also have mature centers of excellence that set policy for the way we do things.

If what a center does becomes embedded in the way we do business, then we eliminate the center. Right now, we're looking at how we account for where all of the funding for centers of excellence should reside, even if the center is being managed by the business unit. Our goal is to make sure we capture good metrics on what business units are spending on these centers.

EL: Is the center of excellence concept the way you drive  innovation?

JD: Yes. We make sure that we don't innovate on the same issues in each business unit. We try to innovate once and replicate after that. Some people fail to see that. If we see a real payback from something a business unit has done, we need to have an evangelist get the message out to the other business units. Another part of the evangelist's job is to find the business cases and to get in front of the strategic business units. It's up to them to make good business decisions, now, or a year from now.

EL: How are you going about grooming your successor?

JD: That's easier said then done. Long-time service has become a hallmark for Chubb. My predecessor was CIO for 16 years. This company understands that people are its greatest asset, and treats them accordingly. Most companies pay lip service to this.

I came out of retirement to work at Chubb with the condition that I'd be here three to five years. During this time, I'd be grooming my successor. My predecessor had a pool of excellent candidates who were considered for this job, and I've added other candidates to this pool. This is the first time in my career where my primary responsibilities have been to find my successor and to carry out all of the day-to-day CIO responsibilities.

EL: So what have you learned from finding your  successor?

JD: Looking for a successor has been an eye-opening experience. I've totally change the way I work; I wish I had done this 10 years ago. Most IT executives spend more time doing and less time grooming. Now, I delegate probably five times more than I ever did in my life. My job is to give my prospective successors enterprise leadership experience, which differs from what either a strategic business unit CIO has or a zone CIO gets.

EL: Do you think the CIO role should be rotational?

JD: It becomes a way to resolve issues with the business alignment of IT, or with business units that want to be involved with technology. Chubb is the first company I've worked at where business units had great alignment with IT. Business people here truly understand the value of technology and deriving more value out of it. So, why would we want to rotate a finance person who understands the value of technology and who accepts us as a perfect partner?

On the other hand, IT isn't going to set up financial policies, but we understand them, along with understanding underwriting and our markets. If you get the depth of knowledge right in the IT organization, then I don't know how much rotation buys you.

EL: You've participated in a number of IT venues, such as the CIO Executive Summit, and have been on the board of SIM. Why have these organizations been important to your IT career?

JD: The network has been invaluable to me. That's something I've been trying to teach our younger IT staff. All of the book knowledge in the world can't help you to deal with the reality of executing and getting things done.

The more I've move from one company to another, I've realized that the same issues exist everywhere; only the names and faces change. Organizations, such as SIM, provide a safe place for getting valuable input from IT professionals. You can use their input to resolve problems or to step back and make a decision. A lot of growth comes from this communication process.

The insurance industry, like many other industries, has its own group of organizations, such as ACORD. Because many industries are so competitive, one can no longer feel comfortable talking to peers at an industry venue. SIM, for example, provides you with a cross-industry network where you can talk about, say, your service-level agreements.

As for speaking venues, such as the CIO Executive Summit, they have been great places to make connections and to source IT candidates.

EL: As CIO of Aon, you had to deal with the tragic events of  September 11. What did you learn from this experience?

JD: I learned that it's all about people, not IT, when something like that happens. Yes, it's great to be able to transfer the work to another data center, which we did. That day, Aon lost 175 people. The entire company focused on trying to find them. The people who survived were in shock. Most people weren't psychologically prepared to go back to work. The last thing we wanted to do was to pester them about picking up a laptop so they could work from home.

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Elizabeth M. Ferrarini is a writer from Boston,  Massachusetts. Reach her at elizabethferrarini@yahoo.com.