CSCMP's Supply Chain Quarterly

Quarter 4 2008

Forward Thinking

Should the CIO "own" the supply chain?

By STAFF
Merck CIO J. Chris Scalet says he knows of at least 25 CIOs of major companies who have taken on expanded roles in process management in their companies.

Chief information officer (CIO) J. Chris Scalet sees more of his fellow executives doing what he does these days: managing supply chains. Speaking at AMR Research's Business Technology Conference in November, Scalet, executive vice president of global services and CIO for pharmaceutical maker Merck & Co., said that he knows at least 25 CIOs of major companies who have taken on expanded roles in process management in their companies. For many, this means "owning" supply chain management and procurement as well as back-office functions such as human resources. "This is a huge shift from five years ago," said Scalet. "CIOs are being asked not just to participate in business strategy but to drive it, own it. They are being asked to champion change and drive innovation. In some cases, CIO stands for 'chief innovation officer.' "

Scalet, for example, is responsible not only for information technology at Merck but also for the company's Lean Six Sigma program and shared services, which includes procurement.

Why would the head of information technology be responsible for the flow of goods and services from supplier to customer? A key reason is that many more CIOs are assuming the role of "business architect," Scalet observed. In his view, CIOs understand the concept of business architecture in general, and technical, information, and process architecture in particular. In many cases, CIOs are working to integrate those three types of structure to create new business models, he added.

Additionally, CIOs—especially those who have helped their companies manage the major reorganizations that come with an enterprise resource planning (ERP) implementation—are being asked to sponsor, champion, and be responsible for change initiatives.

In a question-and-answer period following the presentation, Tony Friscia, president and chief executive officer of AMR Research, acknowledged that his firm is also seeing more CIOs in charge of supply chains. But that is by no means a universal approach to organization. Friscia also has seen many companies where the new position of chief supply chain officer is responsible for information technology.

While the debate over who should "own" whom may still be unresolved, one thing is clear: Information management and supply chain management have become inextricably intertwined.