Computerworld recently announced its list of the “Premier 100 IT Leaders for 2009” and three executives from logistics companies are included: Jacquelyn Barretta, CIO at Con-way; Erin M. Van Zeeland, VP of Business Transformation at Schneider National; and John G. Higbe, VP of IT at Landstar System.  Logistics is an industry that doesn’t get much respect from an IT standpoint, so it’s nice to see these individuals and companies get recognized.

Con-way issued a press release this week congratulating Ms. Barretta.  According to the release, “one notable recent achievement of Barretta and her IT team was the successful integration of the internally developed Step Saver Web-based interactive software application for Con-way Freight. That automation of previously manual dock planning and configuration tasks improved operational efficiency, freeing up valuable time for dock coordinators and saving $3 million annually.”  In a low-margin business like logistics, LSPs must continuously find ways to reduce costs and improve productivity.  I wasn’t briefed on the details of this project, but I assume that with annual savings of $3 million, whatever IT investment Con-way made related to this initiative is being paid back quickly.

A couple of years ago, I interviewed CIOs and IT executives at nine leading LSPs, including Menlo Worldwide, Kuehne + Nagel, Penske Logistics, and Schneider Logistics.  I wanted to understand the role and the responsibilities of their IT organizations, how they’ve changed over the years, and which metrics they use to evaluate the success of their IT investments and organization.

For me, the most interesting takeaway from the research was learning that IT organizations are no longer just a “back stage” function; they’re also an important contributor to the front-end sales process.  As one IT executive commented, “IT is part of the customer relationship lifecycle,” starting with the initial meeting, through implementation, and continuing with ongoing innovation and improvements.

Along the same lines, the IT organization is also more proactive in identifying new business opportunities and process innovations, instead of just reacting to problems and requests, as the following comment from one of the executives I interviewed illustrates: “IT is expected to understand business as much as operations, [we need] to have business acumen.  We need to be smart enough to give [our internal and external clients] what they need, versus what they ask, because they don’t always know what to ask.”

Talking to IT executives today, it’s clear to me that IT is even more important today than just two years ago.  And IT will play an even greater role tomorrow.  As I’ve written before, LSPs must penetrate the small and midsized market to drive future growth.  They must also become more agile and responsive, both to customer needs and new business opportunities.  In other words, LSPs must have the ability to enable new processes and services in weeks, not months or even years.  IT is a critical enabler of both objectives.

Unfortunately, there’s one thing that hasn’t changed much over the years.  Below are a couple of comments from executives I interviewed two years ago, and based on recent conversations, I’m sure they would say the same things today:

• “Our [IT budget] has not grown as fast as the business.  We are expected to do more with less.“ 
• “Our CEO looks at IT investments like buying new trucks; there’s nothing strategic about it.“ 

Schizophrenic is probably the best way to describe the way many LSPs approach IT.  They’re aware that IT is a critical success factor, but they also don’t consider it “strategic enough” to make the necessary investments.  Those LSPs that “get it” will be the industry leaders of tomorrow.  Let’s hope next year’s Computerworld list has a few more LSPs on it.