You may be the smartest candidate for the job, but sometimes it’s all about social connections. This holds true in the Bing versus Google battle for search supremacy.  Despite having what may be the smartest computer learning system in the world, the Microsoft-owned search engine lags far behind Google. Why? It’s all about the massive amount of personal information Big Brother Google captures about users.

If CIOs don’t think they have to compete for the business of internal customers, chances are they’ve already lost them. Check out these expert tips on keeping IT competitive and relevant to the business. While you’re at it, read why we think this just might be the new CIO benchmark.

What’s a little privacy when there’s money to be saved on diapers and coffee? In a quest to create competitive advantage supermarket chains put big data analytics into action by offering customers individualized pricing based on their shopping habits.

Instagram: It’s not just for shoe-gazing hipsters anymore. Increasingly, big-name companies like Starbucks, GE and Nike are leveraging the popular photo app to gather customer data.

Finally, in case you missed it, check out this week’s installment of CIO Matters in which news director Linda Tucci makes a case for the CIO’s need to know just how “green” cloud computing really is and why it matters to us all.

We recently spoke with State Street CIO Chris Perretta about his technology transformation at State Street, running a podcast just last week about the launch of a private cloud and his IT team’s laser focus on such innovations as Big Data processing. Perretta told me he has an organization now that “makes sense” to him, referring to the important role his chief architect and chief scientist play in finding IT trends that feed a “pipeline of innovation.”

Reaching Perretta this morning by phone, I asked him how many of the 850 lost or reassigned IT jobs were due to IT transformation. Before he uttered a word, the bank’s public relations specialist offered, “all of them, really.” Perretta was more reflective. Days like this remind IT people like him just how fast technology moves, and “our jobs have to reflect that,” he said. In addition, State Street has always pressured employees “to do those tasks which differentiate us with our customers.” The technology jobs being eliminated or moved off to vendors are “incredibly crucial to us,” he noted, but are more efficiently done by vendors invested in those technologies. State Street “gets to leverage” that vendor know-how and dedicate its IT people to things that are “out there on the technology edge.”

“So, for instance, our people designed our cloud; our people designed even the implementation of the hardware that we’re running. And it is our people who are designing our most innovative applications,” Perretta said. “Those are the jobs that we want to grow and keep within our employees. That’s the intellectual property we want to develop.”

The reassignment and loss of IT jobs are the consequences of a new operating model, Perretta said, and are driven by such new technologies as State Street’s private cloud and by IT’s move to Lean development principles. Automation eliminates some jobs. Outsourcing allows the bank to shift fixed costs to variable costs, a powerful advantage with technology changing so fast. “Sometimes that involves dislocation, and that’s unfortunate,” he said, but State Street has always watched the cost line. “And we want to make sure that what we do spend is spent in a way that makes a difference, so there you have it.” Whether these same forces will result in more IT layoffs, or how much money he saves by this shakeup, he declined to say.

Of course, State Street is not the only company shedding IT jobs. The federal government said today that it is closing 800, or 40%, of its data centers, a move that would save billions of dollars. The federal government’s outgoing CIO Vivek Kundra told The New York Times that the consolidation was “part of a broader strategy to embrace more efficient, Internet-era computing,” in particular, cloud computing. No word yet of layoffs.

Technology changes us. Perretta said he just bought an old typewriter and put it on his desk — the old manual kind, to remind him of that change in just his own lifetime. That’s the reality of the IT field, and because IT is integral to most business now, that’s the reality of many, many other fields as well — and the reason, in part, for a jobless recovery and why unemployment remains high, especially for the “non-client-facing.” Good luck to you.

Luftman, a professor of IS at the Stevens Institute of Technology, said the SIM study confirms that the economic downturn is causing “a significant shift in IT priorities,” signaling that businesses continue to lean on IT to get through this (when will it end?) rough patch. Business agility and speed to market jumped from the No.3 slot to No. 2 on the list. The perennial headache, IT and business alignment, took the third spot.

Interestingly, IT cost reduction was No. 8 on the top list, confirming what we here at SearchCIO.com have been hearing from our CIO readers since the recession began: namely, that IT executives came well-equipped to deal with the belt-tightening required of this latest downturn, having learned fiscal restraint and having sharpened their strategic planning skills during the tech implosions of the early 2000s.

A newbie concern to the list, making an appearance in the No. 10 spot: globalization! That’s been our impression too: Increasingly, CIOs, even those at small and midmarket companies, are architecting solutions that can accommodate the global reach of their businesses. Full results of the study, which delves into CIO careers, reporting structures, allocation of time and other IT issues, will be released at SIM’s annual meeting in Atlanta next month. Here is the Top 10 list from SIM:

1. Business productivity and cost reduction
2. Business agility and speed to market
3. IT and business alignment
4. IT reliability and efficiency
5. Business process re-engineering
6. IT strategic planning
7. Revenue generating IT innovations
8. IT cost reduction
9. Security and privacy
10. Globalization

SearchCIO.com will be sending out its annual tech spending and CIO career survey soon. Meantime, send me your Top 10 concerns.

Let us know what you think about this blog; email Linda Tucci, Senior News Writer.

Aron is in the midst of updating a two-year-old study on the CIO’s role in a merger and acquistion, in particular, what distinguishes the successful  from the unsuccessful CIOs in these high-stress situations. Of course, every deal is different, but Aron has discovered that many successful IT integrations follow  predictable patterns. Here is the Gartner breakdown:

• 1. Hypothesis-driven planning phase:  CIOs who play a meaningful role in M&As tend to form an early hypothesis about how the integration of the companies should go. Why? People are hungering for certainty in these situations. A CIO who can size up the acquisition and put forth a vision of what kind of integration would work best is a valuable resource.
• 2. Welcoming and signaling phase: This happens just after the deal is done “to wake everybody up to the new reality.” It might be that everybody gets their integrated phone numbers or badges or email accounts, Aron said. In this phase, IT moves quickly to let the acquired and the acquirers know that a new day has dawned.
• 3. Identifying early benefits from M&A: Just as it implies, this is when the IT department goes after the quick wins — be it presenting a single face to the customer, finding the cost savings in sourcing contracts or rationalizing regulatory compliance controls.
•  4. Main integration: One of the persistent myths of M&As is that IT integration has to be done quickly. Not necessarily so. It may be that it makes more financial sense to leave systems be (for a while). Rick Roy, CIO of CUNA Mutual, backed this advice up: “The first question if you are buying is always, are you going to integrate? Maybe not. In our world, we will eventually, but I will not touch infrastructure until well down the path of earn-out on the deal.”
•  5. Longer-term benefits: There are continuing benefits CIOs can help their companies wring from the deal, and it is the IT department’s job to find them.

An interesting coda: Positive uncertainty

The mantra that an M&A integration has to be done quickly may be outdated, but according to Gartner, that other mantra — make the tough decisions early — still holds true. Gartner found a lot of evidence that any kind of uncertainty, even “positive uncertainty “  (a situation where nothing bad is happening and there is a promise of good news) can really destabilize IT people.

I need to run that observation by an IT shrink.

Companies are starting to broadcast their efforts to foster technology innovation among the ranks. (You can read about radical, reapplied and incremental innovation strategies at Chevron Corp. in today’s Q & A with the oil company’s innovation specialist, Jack Anderson.) Meantime, companies that appear to be lacking in ingenuity — cue Microsoft — are publicly flogged on no less than the op-ed page of The New York Times for “never developing a true system for innovation,” record earnings be damned.

So, has the corporate risk appetite for trying new IT stuff changed?

“I don’t think it is so much the risk appetite as it is the nature of IT innovation that has changed,” said Mark McDonald, who covers CIO strategy and the business of IT at Gartner Inc. McDonald said that in his conversations with CIOs this year, he is hearing about three conditions that have the potential to “completely reposition IT in three years” — in other words, make it new.

• 1. The first shift is that business is looking to IT more to raise productivity than to cut costs in the enterprise.

“Obviously, to raise productivity I can’t just do the same with less. I have to do different things with the same resources, which you could argue opens the door for innovation,” McDonald said. Rather than building a better mousetrap to do the same with less, CIOs should be looking for ways to “disrupt the mouse cycle so they don’t ever have to catch mice again,” he said.

• 2. The second shift — more subtle, according to McDonald — is that the housecleaning CIOs did during the recession left their IT departments with fewer projects to maintain. Companies got rid of those pet projects that kept IT a servant to the business unit that squawked the loudest, he said.

“So, if CIOs think a bit proactively, they can actually start allocating a bit more resources to innovation than they have in the past,” McDonald said. (CIOs at hard-strapped companies may not want to put in a budget request for innovation just yet, however. Call it increasing productivity, instead, he suggests.)

• 3. Finally, Gartner argues that “lightweight technologies” that don’t require a big up-front capital investment, such as cloud computing, Software as a Service and Web 2.0,  will continue to make IT departments more responsive — which is different from being agile (a topic for another blog post).

And there is some data to suggest that the urgency for innovation is only going to grow, according to Gartner. In its periodic survey of some 1,000 CIOs worldwide, about 30% listed “creative new products and services” among their top five problems to address in 2010. Asked to project for 2013, just under half of all CIOs told Gartner that innovation will be the No. 1 issue they have to address.

I’ve been checking in with CIOs and analysts, following up on our annual IT salary and career survey to get the real-time read on IT budgets and IT hiring for 2010 and heard a variation on the jobless recovery theme: Elasticity.

Actually, the word came from Jack Santos, a former CIO and research fellow at Burton Group Inc. (soon to be Gartner Inc.). Santos was focused mainly on the sharpened interest from his clients in elastic computing models like cloud services for email and cloud platforms for software development. The notion of investing millions of dollars from IT budgets in up-front capital for solutions that might not show a benefit until much later — or, worse, become irrelevant in a volatile economy — doesn’t sit well with CFOs these days .

“If the company suddenly sees an increase or significant decrease in business, you’re stuck with those sunk costs,” Santos said. Better to “pay by the drink.”

But paying by the drink is not just a big theme for computing, as the Great Recession continues to grate on budgets. The topic of elasticity also came up over and over on the subject of IT hiring in 2010. Many of the CIOs I talked to — both those who had suffered deep cuts to staff and those who did not — indicated they’re using the pay-by-the drink model for humans, too. If business picks up and some of those delayed projects are put into motion, they plan to fill in with consultants or staffing services.

That doesn’t surprise Jerry Luftman, who directs the information systems program at the Howe School of Technology Management at Stevens Institute of Technology. “It looks like spending on internal staff will go down, but spending on outsourcing will go up,” he said, referring to findings from the SIM IT survey of CIOs he conducts annually for the Society for Information Management.

And, Luftman added, if companies do hire, many of them will choose the “rent-to-buy” route, offered by those IT outsourcing vendors, rather than go out and recruit people on their own.

Is your enterprise organization incorporating elasticity into its IT hiring or budgeting?

1. Don’t be clueless how the organization works. Since the systems that are under the CIO process the transactions of the organization, you have the best opportunity to be the focal point on how the organization works. This is a huge asset that most CIO don’t get.
2. Don’t be reactive, be proactive. Learn influence management techniques to initiate projects that both make the company more competitive and secondly, save money. These can be very short-term, inexpensive projects that give the company even the tiniest of a competitive edge to huge systems that take years. There is nothing that a sales force and top management and the marketing team love to do more than brag about some superb system for the customers.

Enterprise architect and CTO of ObjectWatch, Roger Sessions, weighed in with his top two:

1. Failure to speak the language of the business. CIOs who talk techno-babble are rapidly ignored by the business.
2. Failure to understand the need to control complexity. Complexity is the single biggest reason for IT failures. Control it, or it eats you for lunch!

Sessions lit up the blogosphere this week with his post, “Cost of IT Failure,” pegging the total cost of worldwide IT failures at $6.2 trillion.

To get to the cost of IT failure for any one country, Sessions came up with a factor that can then be multiplied by a country’s GDP. He derived the factor .089, by multiplying the amount of money spent on IT hardware, software and services by the fraction of IT projects at risk, by the failure rate of at risk projects, and by indirect costs associated with the failure.

IT failure hurts — countries, careers, CIOs. Avoiding career-damaging mistakes keeps CIOs from getting fired so they’re around long enough to create sustainable business value. Hopefully, our tips will make that true for more of you.