Pioneering CIOs create new revenue streams

CIOs must innovate and seek out new sources of revenue

A modern-day chief information officer (CIO) is responsible for more than just keeping the lights on and ensuring all IT systems are running, secure and updated. Where budgets come under increasing scrutiny, CIOs tend to find themselves either tasked with using IT to drive efficiencies, or using IT to support organisational growth. But there is another way in which CIOs can help the business, and this approach has been getting significant airtime in recent months.

Last month, a global survey of 3,000 CIOs conducted by IBM identified this new mandate for IT chiefs, and it is one that will see CIOs increasingly tasked with using their existing IT infrastructure to create new streams of revenue or enter into new markets.

CIOs that have a responsibility to act as pioneers for their business can take encouragement and inspiration from recent success stories that have seen revenue streams created from products created in the IT department.

For example, supermarket chain the Co-operative Group (Co-op) created its own new electronic in-house point-of-sales (EPoS) system last January, and it has made this system commercially available to other retailers.

The system, dubbed InControl, was rolled out across the Somerfield stores acquired by Co-op last year. The supermarket chain opted to use its own existing EPoS system, written on Microsoft.net rather than Somerfield's legacy IBM 4690 system, claiming it is more modern, modular and already proven.

The system has since been taken on by the Day Lewis pharmacy chain across its 170 outlets, and there are more customers in the pipeline, according to Chris Sproston, head of software development at the Co-operative Group.

He said the group signed up medium-sized software development firm Gödel Technologies (GödelTech) as a strategic partner for the commercialisation of InControl: "We teamed up with GödelTech because we wanted to partner with a company that has enough agility to meet our demands."

Another example of IT being used to create revenue comes from Ordnance Survey. Last year, the organisation launched an online portal called OpenData, which provides free and unrestricted access to a large range of mapping and geographic information as part of the government's Making Public Data Public initiative.

Ordnance Survey has now launched a commercial version of OpenSpace, called OpenSpace Pro, and a service aimed at professional users of its data, called Ordnance Survey on Demand.

The organisation recently awarded a two-year £800,000 contract to digital mapping provider Landmark. It has also been using Amazon's cloud services to host its OpenSpace application programming interface (API) but is on the lookout for more suppliers.

"We are also looking to expand our web-based and on-demand mapping services. As such, cloud computing offers a more cost-effective option, with greater flexibility and scalability than an in-house solution," explained an Ordnance Survey spokesperson.

John Abbott, OpenSpace product manager at Ordnance Survey, added that Ordnance Survey, a public sector entity, is also looking to benefit from public sector initiatives around the G-Cloud to support added flexibility and scalability to its OpenSpace API.

Elsewhere in the public sector, Kent County Council has set up its own trading body to begin selling a package of IT services. The council's technical services division has teamed up with hosted desktop services provider Getronics to offer IT services, such as hosted desktop solutions, hardware, components and consultancy, to a wider market, aiming at councils, housing associations, small and medium-sized enterprises and schools.

It has run a pilot of its hardware and software for schools - Ubiquitous Desktop Solutions - at a primary school in Tenterden and said it is ready to make the service more widely available.

Many CIOs may not see immediate opportunities to step up and become a pioneer for their organisation but, based on its Essential CIO global study, IBM has offered guidance for CIOs with a pioneering mandate.

"CIOs should innovate on the top line and discover new sources of revenue through provocative invention," the company said.

"They should execute visionary plans that can lead to new products, services, business models or markets."

The firm added that social network analysis is key to gaining a deep customer understanding, and businesses should act on that to create products and services that elevate the customer experience.

In addition, developing a culture of analytics will help CIOs identify where there are opportunities that can be exploited. "[A CIO should] build predictive intelligence capabilities that can fundamentally change the business… then encourage widespread application of these to leverage business intelligence and take an advanced look at what drives profitability," IBM advised.