Paint By Numbers — The CIO’s New Job

by drjim on June 13, 2008

CIOs Must Manage Quantitative Analysis

CIOs Must Manage Quantitative Analysis

It’s becoming more and more clear that the tradition CIO job of spending time on operational issues is quickly becoming out of date. What’s a CIO really supposed to be doing with his/her time? The answer, as it’s always been, is finding ways for the IT staff to make the business able to do its job better. One relatively new way for a CIO to do this is in the area of quantitative analysis.

Quantitative analysis is the process by which often huge quantities of numbers related to the business, the economy, customers, inventory, etc. are “crunched” through custom algorithms, statistical packages, and home grown code in order to transform information into real world business knowledge that can be used to make educated business decisions. This type of processing is not easy to do — you have to be very sure that the answers that you are getting are real answers and not just good looking garbage numbers tumbling out of a fancy analysis tool. The ability to make sure the correct processing is being done is the responsibility of the quantitative analytical specialists (the really big brains).

So what role does a CIO play in all of this? Well the quantitative analytical specialists need to live somewhere in the company and since they live an breath the data that only IT can collect for them, often they become part of the IT organization and report to the CIO. The CIO is then responsible for making sure that the correct parts of the company’s operations are being monitored and metered so that the analytical specialists get the data that they need. Getting date can often be the easy part, getting good “clean” data can often be quite difficult to do. Additionally, the CIO will then be responsible for taking the analytical specialists’ outputs (which can be quite technical) and presenting them to the rest of the business in a way that they can understand and take action on. The CIO will then become part of the feedback loop as the business asks follow-on questions that can only be answered by additional analysis.

I believe that this type of function is much closer to where CIOs will be as we move forward. The CIO will truly start to deserve the “I” in their title — but it will be their ability to transform information into actionable knowledge that will make them and their department a critical part of the firm’s success.

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