Founded in 1971 as a small food distributor in Dublin, Ohio, the company completely transformed itself into a pharmaceutical supplier only a decade later. Today, Cardinal is a major supplier of medical products and services, a $30 billion corporation with 49,000 employees on five continents.

Along with having a maverick business history, Cardinal has been known as an innovator in technology. That's where White has a unique challenge: Rather than force her company to accept change, she must live up to its reputation of doing whatever is necessary to succeed.

Since 1999, White has overseen Cardinal's vast technology systems, databases, and e-commerce products and services. She previously served as CIO at Baxter International and at its spinoff Allegiance Healthcare, which later merged with Cardinal.

The importance of technology to Cardinal is reflected in White's job title, which includes executive vice president of e-business as well as chief information officer. Last year, Forbes magazine named her one of America's top 25 businesswomen.

White's role provides a window into the expanding influence of information technology in established fields such as health care. She spoke to CNET News.com about her latest mission to transform Cardinal's business through the Internet--and about how to improve the bottom line while helping hospitals order heart valves and make other emergency requests using the Web.

How do you measure success and failure as a CIO?
I've been fortunate to be with an organization that values the business application as it relates to the customer. So my personal perspective is absolutely mirrored throughout Cardinal. We have a history of innovating through technology, and that makes my job somewhat easier. One way I think to inspire an organization is to really focus several different initiatives around customers first and then have other initiatives support that. That is really how we go about everything.

Business alignment, making sure that the work we are doing very much supports the business initiatives we have going on, is one way I measure success. External customer feedback is a key piece in how my businesspeople would gauge success and failure...We do very little technology for technology's sake. You will find us at the low end of doing things for incremental improvement or because it is a gee-whiz technology.

In terms of working toward the digital transformation of your company, how far along are you?
We are pretty excited about that. The transformation truly means a radical way of thinking. We have centered on information and collaboration technologies...providing customers with holistic information that we couldn't offer before the Internet.

Let me give you an example. We have an online business area that actually teams up with drug manufacturers. In many instances, the drug manufacturers are outsourcing production to contract manufacturers and sales to contract sales companies. We're providing collaboration capabilities to these players so that every stage of the drug-delivery process can be in tune. We are being very creative in using the Internet to link our customers to processes that are very directly related to what they want us to do. Internally, we are using the collaboration capabilities because we have multiple people in varied locations internationally, as well as domestic, who need to work together.

(Customers) want integrated solutions. And we have used that to break down the barriers geographically so we can move quicker. We can collaborate about customer needs in a more efficient way and be unbound by the business unit structure. I think (former General Electric CEO) Jack Welch calls it the "boundary-less organization."

What's your biggest tech nightmare?
Certainly, for Cardinal Health and the customers that we serve, reliability is our top priority. Making sure that our technology never goes down, 24-7, 365 days a year, is our No. 1 focus because that's what our customers' No. 1 focus is.

Obviously, another issue in the industry is assessing the continued financial viability of technology vendors that are out there and that we all use. I would think that is true for most CIOs today with the swings in the technology market.

Q: How much do you plan to spend on IT over the course of the next 12 to 24 months, and is that more or less than last year?

What kind of return on investment do executives expect?
That has been an interesting question since I have been in information technology. We believe in the strategic use of technology and have a history of doing strategic and innovative customer offerings. We talked about proprietary systems for 20 years and then open systems now. We are willing to invest for the future when the outcome for us--and the company--is not clear.

That is exactly what we did with Cardinal.com. We believed in it and continued to invest in it, yet in the operating budget, we scrutinized every penny...I think we have a great balance between future customer-solution investments and running a lean operation. We try to get as much as we can through fewer distribution centers. That is how we are profitable.

In technology investments, we look to build a business case and look at the return on investment to make the right decision about what is the highest priority for us to do.

To date, there are no Web services as hyped as those by Microsoft, Sun, IBM and others. Do you think the actual services will live up to the hype? Are you leaning toward one or another?
I certainly do have technology people looking into that. Our stand is that we are waiting for these services to mature. We are already using XML. We have the bulk of our Web environment based on Java, but I think we don't need to lead in the technologies; I want to lead in the customer solutions.

We aren't on the leading edge, going out and getting the latest technology--unless it's something we specifically see that our customers are going to need. Wireless might be a little different, but in these other things, we don't see how it benefits us from being first. We just use more mature technologies to deliver to customers.

The Internet has obvious appeal because of its openness and accessibility for the customers. We have remote customers--rural hospitals that have very little technology. So the Internet was one exception. But I think we weigh (getting cutting-edge technology) with the question, what is the business value to be the leader? On other things, we wait.

Cost savings from going onto the Web could be jeopardized because of all the competing data standards in the health care industry. Cardinal is one of the founders of the Coalition for Healthcare eStandards. Has the coalition made any concrete progress toward standardization?
We work actively in driving standards in health care. We continue to be optimistic and work in those standards committees. We have members that work with those committees in every area, and we continue to have some successes.

Has the Health Insurance Portability and Accountability Act helped keep Cardinal's spending robust?
(Editor's note: The Health Insurance Portability and Accountability Act of 1996, or HIPAA, is meant to protect health insurance coverage for workers when they change or lose their job. It also allows patients more control over their medical records and addresses other health-related issues.)

Cardinal's primary technology focus is in back-end systems, supply chains and those kinds of things. HIPAA really applies to patient privacy. In all our businesses, we have minimal instances where we're actually working directly with patient records. We handle the business systems of our health care customers much more.

What are the main areas you're excited about and will invest in over the next year?
One of our most extensive investments in the last three years is building out a true e-commerce offering for our health customers. We started investing in 1999; we had a very solid model built on 20 years of investing in infrastructures. About 18 months ago, we rolled out an e-business offering in Cardinal.com that really brought every investment we had made into an integrated service that was available on the Internet. What we've actually done is offer our customers over 5,000 linked-in suppliers and access to all our warehouses.

We brought...our drug distribution warehouses all to the forefront in one place so that a customer can now come on the Internet and not only place an order if they choose, but look at order status. They can check prices, they can check availability, they can check locations--they can even look at invoices across the company and determine what they owe.

We are now working on letting our customers pay online. That has been a huge piece that really made sense for us. Our customers' No. 1 need is integration. We feel like the Internet has allowed us to do things--that we leapfrogged some of the old technologies--by delivering these Cardinal.com capabilities. One offering we just rolled out is called Cardinal Insight Center, aimed at the executive suite, the C-suite. We've been able to personalize (customer) requirements to give them a view of how they are doing in some of their commitments and some of their contract issues, in their best-value products. That particular product has been out for two months, and we've had rave reviews.

Can you elaborate on the payment systems you're working on?
We're working on what we call e-accounts so that we can actually take payments online. That is in our R&D. The other thing we're excited about is the future of wireless technology. We are also rolling out a pilot in June in that space.

Do you think e-payments will help attract more customers to your online products, or are customers still more comfortable with the old check or purchase-order methods? Payment methods have been a huge cultural bottleneck in business-to-business e-commerce. Are your customers ready to start paying online?
We've had a very long relationship with our health care customers, so it isn't a casual relationship. Our customers are used to us doing things for them like handling their inventory, counting on us to deliver a kit just in time to perform a procedure in the operating room. I guess we think of e-accounts as just one more step. And it's actually a pretty administrative step to trust us with when they already trust us to get a heart valve to the operating room just in time to operate on a patient.

So we feel like we have that partnership relationship with our customers. They really want us to do more to take the administrative burden from them.

In what other ways is Cardinal using the Web?

What's been your biggest disappointment with Web-based technologies?
We have found that in trying to be very innovative, we have had to write a lot of our own interfaces and bridges to our different technologies. There really wasn't that ability in many of the products we had bought from our vendors. In fact, many of our vendors solved one standalone problem, but they don't tend to look holistically at their customers.

What three technologies do you think will have an impact over the next year or two? Which suppliers do you think will dominate in these areas?
We think there are several areas, but certainly, we don't have a crystal ball (revealing) who is going to dominate. We have worked with almost every vendor out there in one form or another because of the acquisition strategy Cardinal Health has. But if you're looking at middleware, certainly there are companies we know firsthand, like IBM, Vitria and WebMethods--all vendors whose technology we're using because the companies we acquired were using them. In the portal space, there is Microsoft and IBM again. BroadVision is another vendor whose products we have integrated very heavily with our Internet offering.

In terms of what is going to happen over the next few years, I think there will be fewer vendors than there are today. Hopefully, the products will last for the people who've built on them. I think we are in a wait-and-see game for the next 18 months to find out who survives the shake-up.

So what are the technologies that will matter over the next few years?
More integrated offerings. Industrial-strength wireless is critical, and we all believe that is the next wave of really revolutionary technology.

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