In the past 10 years, information technology has gone from being one leg of the economy to being its very foundation.

Internet and wireless technologies, global outsourcing and "hosted business models" have transformed the roles of technology executives from exceptional to common.

Information technology is notorious for its pace of change, and the past three years have been exceptionally volatile. Radical change in major technology segments are leading to different qualifications for hiring executives to run those businesses.

All require executives who can leverage technology to create new products, increase revenue and lower costs. They need executives with a long track record of building profitable businesses, who can apply their past success to the new realities. Consider the changes in each of these industry segments:

• Fortune 500. A new class of corporate executives is evolving in the Fortune 500 who use the Internet to optimize traditional business functions. These executives include: vice president, supply chain; chief customer officer, chief information officer; chief financial officer, information technology; vice president, strategic sourcing, and vice president, performance management. Leading organizations are trying to create a corporate culture in which business and technology executives have the skills and flexibility to go back and forth between both functions.

Successful executives for these roles will tend to be business-driven, not technology-driven change agents. The challenge is that corporations are accustomed to assessing executives in three dimensions -- functional, management and industry expertise. Adding a fourth dimension -- technology -- complicates the selection process. Also, is the job designed as a customer-driven role, sponsored by one of the top two executives in the organization or as a staff function with no clear sponsor? If the latter, it is destined to fail.

• Software vendors. The IT vendor world is experiencing the biggest series of changes since the rise of independent software companies in the early 1980s and the advent of personal computers.

The software industry is in a deep funk for a variety of reasons: the economic downturn; excess capacity of enterprise software in corporate IT departments and tightening of corporate IT budgets; software becoming a commodity (as hardware did before it), and little profitability in the industry aside from Microsoft and Oracle.

Looking forward, the software industry will have more in common with a service bureau than the packaged software vendors of the past 20 years. And technology executive roles will be more like those of classic business executives.

Identifying executives who can adapt to and leverage these changes in marketing, selling and delivering software functionality is critical. A successful track record is the starting point, but hiring an executive because of his or her past success in the software industry without examining their fit for the changing landscape can backfire.

• IT consulting firms. After a decade of incredible growth sparked by corporations implementing enterprise software applications such as SAP and Peoplesoft, and pursuing Internet initiatives, consultancies now are challenged by the economic downturn. Corporate customers are buying less, and asking for higher value from consultants. Offshore outsourcing is driving down margins.

Finding experienced, disciplined, creative executives who can build and operate profitable consulting firms in the face of these challenges is critical. They must be businesspeople first who can diagnose a client's business and build solutions, neither pure strategists nor software delivery executives.

• Outsourcers. Outsourcing is a rapidly growing industry, from call centers to business-process outsourcing of back-office functions. But outsourcers, too, are challenged by the economic downturn, by decreasing margins due to offshore competition and by growing customer expectations.

Profitably growing an outsourcing business requires innovative executives who can both strategize and execute. They must design, sell and negotiate engagements that simultaneously have high customer return on investment and are profitable for the firm.

Seeking Lou Gerstner

Consider IBM's experience in hiring Lou Gerstner as CEO in 1993. IBM's market share and profitability were eroding due to its difficulty in adjusting to the growth of PCs and UNIX workstations. IBM chose Gerstner, its first CEO from outside the company, and from outside the computer industry.

Why did IBM select Gerstner? Because it recognized that, above all, the company needed a strategist to determine what customers really wanted and a change agent to transform IBM's engineering-oriented culture to a customer-driven culture. In this light, Gerstner's track record as a McKinsey strategy consultant, a turnaround specialist at Nabisco and a builder of financial-service product lines at American Express were a great fit.

Gerstner was, by most accounts, highly successful. He changed IBM's culture to that of an eclectic technology services company. IBM's market value rose from about $29 billion when he took over in 1993 to $181 billion when he gave up his CEO title in March 2002.

Granted, the value of IBM's stock grew at a higher rate than the company itself, or its profitability. But compared with the dismal prospects of most other computing vendors, IBM stands out as having made a successful transition from product vendor to services provider.

Has your industry changed?

The key to hiring the right technology executive for your business is to brainstorm and answer the tough questions as to what has changed in your market, and critical factors for success:

What outcomes would you like the person to deliver in 18 months? Is it viable under current market, industry and organizational conditions?

Do traditional job description and qualifications apply, or do you need unconventional skills? Or, as technology becomes more interlinked with operations, a classic business executive?

For those interested in more information on this topic, I wrote white paper, "Hiring Senior Executives for Technology Businesses in a Time of Great Change," available for free at http://www.opentechnologies.com/.