Fixing IT

What should be on the ''to do'' list of CIOs in the new year.

Ed Sperling

Crystal-ball forecasts for the coming year ignore one of the most fundamental truths about people deeply engaged in information technology: Real IT folks don't just dream about IT, they fix things.

In keeping with that spirit, I'd like to offer up a "to do" list for CIOs and other technology-driven workers, based on some ideas of what technologists want from technology--and what it will take to get there.

Better Connectivity

It's relatively easy to look at Japan or even Europe and say connectivity is better because, well, it simply is better.

Sure, those geographies are smaller, which helps the infrastructure more economically serve a great number of people. But connectivity in China is typically better than what we get in the U.S. (The New York Times' Thomas Friedman makes this point painfully well here.)

Connectivity needs to be radically improved everywhere in the U.S., including in densely populated centers where calls are still dropped or filled with static. The fact that we even know how to read bar charts for reception is a stark sign of the problems. The solution will involve a much bigger investment in infrastructure, which means a collaboration between private enterprise and government--something that has been lost since the breakup of AT&T.

More Bandwidth

Much of the fiber backbone laid during the dot-com bubble is still dark, because the "last mile" connections to businesses and homes never happened. These digital dirt roads are slowing down the adoption of all sorts of services that demand high bandwidth, as well as new ones, such as Internet TV and streaming high-definition movies.

More Research

Innovations don't happen overnight. (Longtime entrepreneur Judy Estrin has written vividly about this problem.

Research groups such as Xerox's (nyse: XRX - news - people ) Palo Alto Research Center (PARC) and AT&T's (nyse: T - news - people ) Bell Labs brought us the graphical user interface (best exploited by Apple (nasdaq: AAPL - news - people ) in the Macintosh and later by Microsoft (nasdaq: MSFT - news - people ) with Windows); the six-way pointer (Nintendo Wii); wireless LANs; cellphones; Unix (Mac OSX and all versions from Windows NT onward); the C programming language; Internet switching; laser printers; e-mail and many more developments we take for granted.

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Such programs, however, are increasingly scarce. IBM (nyse: IBM - news - people ) has some, as do university labs. Microsoft and Google (nasdaq: GOOG - news - people ) contribute a bit. As a nation, we have to find ways to encourage pre-competitive research as a foundation for many efforts.

New Compensation Schemes

The trouble with pure research is it doesn’t mesh well with corporate mandates to meet quarterly numbers and squeeze every last penny of profitability from a company. That may suit current shareholders, but it doesn't build much for the future. We've heard calls for research tax breaks and incentives for years--and those are useful measures, but corporate management needs to revamp its perspective, too. C-level executives should be compensated for superb management as well as visionary planning that will last well beyond their corporate tenures. Executives who get that mix right should be handsomely rewarded--that takes a lot more thought and talent than just cutting costs and shifting jobs to lower-cost areas.

More Openness

CIOs have love-hate relationships with open communication schemes. On one hand, they allow ideas to be freely exchanged on a global basis, which always produces better results. On the other, they create security problems that must be fixed swiftly, disrupting or competing with dozens of other pressing mandates put on CIOs.

The smartest CIOs I speak with live with the problems; they quickly fix any issues that arise so their companies can benefit from a free exchange of ideas. And guess what tools help fix those kinds of problems most efficiently? More data connectivity, better bandwidth, more agile researchers who can see and solve problems well, and executives motivated to find innovative answers with positive repercussions, quarter after quarter.

President-elect's emphasis on the environment means more work for CIOs.

Ed Sperling

Rarely do national political agendas have a direct bearing on CIOs, but next year will be different.

Frank Kelly, Deutsche Bank's (nyse: DB - news - people ) managing director and head of government affairs for the Americas, told the Semiconductor Industry Association Nov. 19 that the Obama administration will look to make swift and deep changes throughout the business world. And while Obama said this is "tech's time," he also said the emphasis will be on everything green.

For many CIOs who believed they could take their time rolling out more energy-efficient changes, including postponing the purchase of new equipment, this should serve as a wake-up call. Here's how things are likely to unfold:

--Pressure will be levied on coal- and oil-fired power generation plants to shift to more environmental-friendly technology. That means new technology, as well as the addition of scrubbers (or, in the case of coal-fired plants, gasification). The problem is this stuff is expensive, which will prompt the utilities--most of which are regulated by their respective states--to apply for rate increases.

While states are likely to approve these increases, they are even more likely to scale them based upon usage. The biggest users will bear the brunt of these changes, and data centers are among the largest consumers of electricity on the planet--and in many cases, the least efficient. That means there will be huge pressure to reduce energy consumption.

--Pressure on companies to cut electricity consumption will mean putting into place long-term plans more quickly, but at a time when budgets are being squeezed by the ongoing economic downturn. The good news is that there will probably be significant tax credits applied to the purchase of more efficient hardware, and a case can be made for sales of virtualization software. The bad news is that no one has the money to speed up these purchases at the moment, which should make for an interesting shuffle of prioritization within corporations.

Ironically, outsourcing is unlikely to reap the same tax benefits, because that's viewed as just handing off the energy problem to someone else. In fact, the numbers may work against software-as-a-service and cloud computing in the short term, because there are no tax benefits. It remains to be seen exactly what benefits will be offered, but this will be an interesting twist to what was viewed as an important cost-cutting trend six months ago.