QUESTION: You’ve been away from Canada for quite a while now, how have you been spending your time?
ANSWER: I tried to retire at the end of 1995 from Ernst & Young, thinking I’ll change my lifestyle, sit on some boards, do some investing and play some golf. I joined eight boards including
Quorum, a venture capital company. After a few months, the Quorum board asked me if I would go to Singapore. They had a company set up there to be a Canadian distributor of hardware and software, and they said, ‘Hey wouldn’t it be great if we had an outlet in Asia. Bur there’s a problem in their operation and could you go over there for six months?’ Of course, it took a year and a half, but we did help a number of Canadian software companies get established.
QUESTION: Did it get easier after that?
ANSWER: I was all set to come back and retire, and Arthur Andersen came calling wanting me to grow the company around the world, and describing it as a retirement project. Probably worked harder than I ever worked. It went well and I was going to retire again. The next suggestion was go to San Francisco, and at least that’s closer to the family. I’ve been involved in high-tech for 30 years, so I thought I might as well go to the Mecca (of the industry), so that’s what got me there. Then the Enron disaster hit and blew up Andersen and this opportunity came along to merge Andersen with KPMG consulting, so that looked like an interesting opportunity. So now we’ve changed our name to BearingPoint. I’ve had three different name cards in the last four months. It’s up and running. We did well, hit targets and made money.
QUESTION: But this is still a difficult time for the industry, from where you are, which is the consulting world, and for the senior executive, IT. Do you think it will get better?
ANSWER: You know, it’s all coming together. Back when electricity came along and people were just figuring out how to deal with it, we used to have a chief electrical officer. Well, we don’t have one of those anymore. Now the issue is IT will be in time, something that is just there, so you may not need a CIO. But there is something happening in the whole area of process management and integration, and the new tools and modeling capabilities. Ten years ago, you’d map all the processes and flow charts would fill up the walls. You and the client would say, “”Isn’t that great,”” but you couldn’t do anything with it. But if you wanted to develop your software and programs, you have to start over again. The new tools that come out really product-ize the process, define attributes and their relationships. Then hit the button and out comes the program. CIOs will focus even more on business processes, and how they flow. And that will all tie into governance as well as the IT space and the business process space and we’ll just have one business process organization. It’s a great opportunity for a CIO who understands process and strategy to move to the executive table. All of this has to be pulled together.
QUESTION: But aren’t most CIOs moving in this direction and don’t most already report to the CEO?
ANSWER: Yes, but the turnover rate is every 18 months.
QUESTION: So this is still a profession in turmoil?
ANSWER: Yes, but it’s a combination of a profession in turmoil and an issue of CEOs and other executives not understanding what the CIO should be doing. So, there is still a communications barrier. The other problem is that because of the economic difficulties, CEOs are telling CIOs you can’t spend three or four percent of revenue on IT anymore. I want you to knock it back to two. I’ve even heard of one very large company that the CIO has been given orders to knock it back to one per cent of total revenues. And he was at four. So, either that CEO is saying it isn’t being implemented effectively or he doesn’t understand it.
QUESTION: Are companies cutting back too much on IT?
ANSWER: I can remember (General Electric ex-CEO) Jack Welch saying ‘I hope everybody cuts back on IT. By the way, we are increasing it,’ because he understood the strategic value of IT. But measuring IT as a percentage expense of sales is a meaningless thing. The issue is: ‘What return on investment are you getting?’ You can’t tell a courier that eight per cent is too high because they may be getting competitive return from that.
QUESTION: Are companies too obsessed with ROI?
ANSWER: It’s a question of how you measure it. If a company can measure return in terms of expanded market share, or customer service, that’s a good way. If you just measure how much staff you’ve cut, and some still do that, then that’s wrong.
QUESTION: The Canadian IT industry seems to be struggling, are you still following it?
ANSWER: I’ve spent 25 years leading it, founding this and that. (Hutchison was founding chair of both CANARIE, a Canadian Internet development agency and the Canadian Advanced Technology Alliance.) And when I was in Asia, I was able to get some good business. It’s a big challenge for Canada though. I know we wrestle with keeping ownership here and balancing that with globalization. But when I go to California, I get miffed a lot. I tell people I’m Canadian, and we have good technology, and it gets discounted. If it’s not made in U.S., they start with the assumption it’s not as good as theirs. You’re always fighting this uphill battle.
QUESTION: What does Canada need to do to take it to the next level?
ANSWER: You know, I’ve been thinking about that and it’s almost like we were in the mid-’80s, when we unleashed a lot of new energy and created a lot of good things for the ’90s. Now I think it’s similar. There are a whole number of new initiatives underway that will lead to the next phase of computing. It’s almost like there’s a new beginning. So why can’t companies get on the leader board and stay there?
The problem is the rate of change, and everything is changing so fast, and companies are not agile enough, they have rigid IT systems. Agility is actually the number one issue because things will change even faster over the next ten years. So I’m actually calling it strategic agility, the ability to sense and respond.
QUESTION: So how is that retirement plan coming?
ANSWER: I finally decided that I’m travelling the world, I’m having more fun than ever so why would I retire anyway.