TECHNOLOGY SEEN ALTERING ROLE OF CHIEF OF INFORMATION

KIM ANN ZIMMERMANN

PHILADELPHIA -- As technology becomes more central to every facet of the retail business, chief information officers need to start thinking like retailers, and not just technologists, as a matter of survival for themselves and the business.

Nine chief information officers from major retailers and manufacturers tackled these issues at last week's technology conference here, sponsored by the National Retail Federation, Washington.

The NRF reported that retailer attendance at the show, held October 5 to 8, was up 25% over the 1996 show. Overall attendance also increased, with registration totaling 5,100.

Chief information officers on the panel cited numerous roadblocks in today's corporate culture to integrating information technology with other areas.

The technology staff is often isolated from the wide array of business units it is mandated to serve -- from marketing and merchandising to human resources and logistics.

As chief information officers try to pull key talent from the business units to work on developing information systems, tension between the IT staff and the business units mounts. Executives are worried that people are being taken from their "real jobs."

And even as the technology staff struggles to install the latest technology to meet the demands of the business, there is pressure to maintain, and even improve, existing systems.

"In the past, the technology area in a retail company has played more of a support role, but that is clearly changing," said Joseph Smialowski, senior vice president and chief information officer at Sears, Roebuck & Co., Hoffman Estates, Ill. "Today, we can't implement any change in the business strategy without technology. It is woven throughout the organization."

Smialowski emphasized, "We've got to get the technology staff thinking of themselves as retailers."

Getting people from the various business units involved in IS projects is an important part of the success of any project, the chief information officers agreed, but they acknowledged it is often a source of conflict.

"[Taking people from the business units] is a huge commitment," said John R. Thompson, vice president and chief information officer at Liz Claiborne, New York. "It is important that the chief executive officer and the executive team work together to pick the best and the brightest people out of the business units," he said.

It is natural to have some friction between the business units and the technology staff when introducing substantial changes to the business process, the chief information officers said. The success of a project depends on how these concerns are addressed.

"It is inevitable that there will be resistance from a business unit that feels threatened," said Donald E. Norman, vice president and chief information officer at Kmart, Troy, Mich. "The best way to deal with it, I feel, is through attraction. Create a giant magnet so that all areas of the business will feel drawn to the project. A big part of the job of a chief information officer is selling."

One of the hottest areas of discussion among the chief information officers centered on keeping existing systems functioning while putting a new system in place. The panel was split on the issue of using outsourcing to maintain legacy systems while installing a new enterprise-wide system.

"We farm out activities where we can't bring additional value," Smialowski said. "We've outsourced data centers, network and desktop management services, and it has served the company well. As long as each party has a clear understanding of what is expected and there are clear standards that must be adhered to, it can be positive," he said.

Sandra L. Harris, chief information officer at Maidenform Worldwide, Bayonne, N.J., said IT departments must strike a careful balance of who is working on the old systems -- whether it is an outsourcer or the internal staff -- while the new system is being developed. "Everyone wants to learn the new stuff, but we still need the knowledge to support the old stuff," she said.

She added that it is important to minimize changes to the existing system while installing new technology.

Other members of the panel cautioned against outsourcing, noting that keeping technology in-house is central to the retail operation.

"We would never outource merchandising, so why would we outsource technology if it is really mission critical?" said Thomas Reinebach, chief information officer at Toys 'R' Us, Paramus, N.J. "If we outsource mission-critical systems, we get further away from the user."