In English

Russia's CIOs: Taking on the IT challenge

31.07.2002, MARTIN RITCHIE
Издание: The Russia Journal
The chief information officer (CIO) in a Western corporation wields influence that Russia's IT directors can only dream of. They sit next to the chief executive in the boardroom, who listens while they explain what IT can and cannot do for company strategy.

Russia's equivalent of the CIO — the IT director — doesn't generally have such influence. Some companies and certain sectors are recognizing the need for a properly integrated IT strategy, but it's not happening quickly.

"If you take firms with foreign capital or frontline companies in competitive, high-tech sectors such as banking and telecommunications, then, yes, they have understood the possibilities," said Tagir Yapparov, chairman of LT. Co., one of the country's biggest information-technology consultants. "But, on the whole, Russian firms are far from understanding the real importance of IT."

He said that the vast majority of companies still work according to the "remainder principle," meaning that attention and money are given to IT only when everything else has been considered; so, the IT director is far from having influence at the boardroom.

But the problem lies not just with company policy, but with the limitations of the IT directors themselves, he said.

"Many directors have told me they would like their IT director to have a more strategic role, like that of a CIO, but that they are simply not ready to do this," said Yapparov. "They do not have sufficient education and training, cannot speak the language of business and are still, at the end of the day, just technical specialists."

Surveys have shown that the vast majority of Russia's IT directors have a technical background, whereas CIOs in the West are more often than not schooled in business.

Issues such as these — what kind of education a CIO should have — are still debated in Western businesses circles, where the role of the CIO is certainly more prominent than in Russia.

Roustem Khairetdinov, publisher of the magazine CIO, founded a project called the Russian CIO Society to promote the emergence of a CIO-class executive in the Russian business community.

He claimed there were only two СЮ-equivalent managers in Russian companies one year ago. Now, he said, there are 20 IT directors with a place on company boards.

He said companies were beginning to understand that IT was more than an "expensive toy," but businesses had to shift the focus of their IT directors.

"In the vast majority of Russian companies, IT directors work on existing processes rather than on helping create new ones," he said. "They adapt to someone else's business plan rather than having their own input into it."

Exceptions include IT directors of companies such as mobile-phone operators, whose technology-intensive business demands a greater role for information specialists.

Megafon's IT Director Igor Lanin fulfils responsibilities similar to those of a CEO. He said that information policy was inextricable from company strategy.

"The mobile-phone business is all about technology, right down to the services we give the customer," he said. "We have more than a million clients, and, if we can't get the technology and the information systems right, we can't serve them."

However, said Lanin, it wasn't necessarily high-tech companies that led the way in giving their IT departments a bigger role — it was simply companies that were more commercially oriented in outlook and structure and, therefore, quicker to recognize the benefits of an integrated approach.

Companies founded in the Soviet era are slower, and their IT departments have often remained as isolated units dependent on boardroom largesse.

A.T. Kearney consultants were called in to polish up the information strategy of a "world-leading export-oriented company."

The firm inherited a very Soviet organizational and hierarchical structure, said senior business analyst Andrei Barkin.

"We had to ensure that the company was more focused on information technology, for example, how to link complex industrial technology processes into the corporate information system," he said.

They worked from the start with a new CIO-level director. "Management didn't understand a thing about how these processes work or what the right level of investment is," he said.

But despite the enthusiasm for bestowing CIO powers and greater influence on the IT director and his or her department, there is room for some caution.

Sergei Matsotsky, general director of one of Russia's big IT service-providers, IBS, said: "There are many who don't understand or are not sure at a given moment in their company's development that a focus on IT is either important or necessary. And, in many cases, they are right."

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