The Evolution Of Enterprise IT

The Evolution

Of Enterprise IT

Abbie LundbergEditor in Chief, CIO

CIO Archetypes: Context MattersCIO Archetypes: Context Matters

INNOVATION AGENTStrategist who drives business change–and leaves the details to others.

OPERATIONAL EXPERTRolls up their sleeves and meets the challenges of the business head on.

TURNAROUND ARTISTRelishes the challenge of fixing broken IT situations.

BUSINESS LEADERStraddling the business-technology divide, this archetype relies on communication and collaboration to get the job done.

The Business LeaderThe Business Leader

NEAL GUERNSEY, CIO, Feld Entertainment

61% spend significant time interacting with CXOs and

business people – the most of any archetype

32% focus on budgeting and compliance

23% personally manage IT crises, fewer than anyother archetype

56% consider the ability to lead and motivate staff atop personal skill

3% say innovation is a dominant part of their role, least of all archetypes

DEFINITION: Business Leaders put a premium on understanding business processes; they describe communication, leadership and management skills as core competencies. Their priorities are aligning IT and business goals, using technology to improve business processes, and controlling costs.

The Innovation AgentThe Innovation Agent

JANET SHERLOCK, CIO, Calico Corners

87% believe that IT should proactively envisionbusiness opportunities

83% work for companies w/less than $1 billion in revenue

77% are members of the executive committee

70% say strategic thinking and planning is their most

important personal skill

55% report to their CEO

53% have worked in sales or marketing

DEFINITION: Innovation Agents put the highest emphasis on strategic thinking and believe strongly in IT’s ability to drive new business initiatives. They are very likely to be members of the executive committee that reports to the CEO, and they are most often found in smaller and midsize companies.

The Operational ExpertThe Operational Expert

CHRISTINE LEJA,CIO, SouthwesternIllinois College

23% report to the CEO, the lowest of any archetype

$135,000 average salary makes them the lowest paid

46% spend time managing IT crises

64% share IT ROI accountability with the business–more than any other archetype

69% have budgets of less than $5 million

DEFINITION: Operational Experts place a huge emphasis on their project management and execution skills, and their IT department's primary mission during the past year was to cut costs. These CIOs thrive in enterprises where the pressure to deliver IT systems on time, under budget and with full user acceptance is high.

The Turnaround ArtistThe Turnaround Artist

JAY ROLLINS,CIO, Churchill Downs

3.9 years is the shortest tenure of all the archetypes

$204,000 is the biggest paycheck of any archetype

58% cite their ability to influence change in others as a top personal skill

58% are directly accountable for IT ROI

$4.3 billion in average revenue makes their companiesthe biggest for any archetype

DEFINITION: Turnaround Artists are hired guns and risk takers who see themselves first and foremost as agents of change. They've got deep experience in IT and have the ability to come into a chaotic situation, ascertain what the business needs most, recharge a beaten-down staff and start piling up the wins—quickly.

Archetypes by the NumbersArchetypes by the Numbers

IT Budget as a Percent of Revenue

Overall Innovator Operational Turnaround Business Leader

7.4% 10.8% 5.7% 6.9% 6.2%

Innovators Get the Budget

CIO Salaries


$185,200 $166,500 $134,900 $204,167 $184,600

Turnaround Artists Get the Cash

A Seat at the TableA Seat at the Table

CEO41%

COO14%

CFO24%

CorporateCIO5%

Other15%

Yes68%

No32%

REPORTING STRUCTUREMEMBER OFEXECUTIVE COMMITTEE

Who Talks to the Boss?Who Talks to the Boss?

Reporting Relationships


CEO 41% 55% 23% 47% 46%

COO 14% 11% 21% 18% 8%

CFO 24% 28% 31% 21% 26%

Corp. CIO 5% 0% 5% 3% 6%

Other 15% 6% 21% 11% 14%

The Perils of Reporting The Perils of Reporting to the CFOto the CFO

TIME SPENT ON...REPORTING STRUCTURE

CIOs WHO REPORT TO CFOsHAVE ½ THE BUDGET OF CIOsWHO REPORT TO CEOs

The Perils of ReportingThe Perils of Reportingto the CFOto the CFO

CHANCE OF BEING PART OF THE EXECUTIVE COMMITTEE

WhenReporting

to theCOO

WhenReporting

to theCEO

WhenReporting

to theCFO

HURDLES

Today’s Core Today’s Core CompetenciesCompetencies

Stakeholder Alignment: Knowledge & ActionsStakeholder Alignment: Knowledge & Actions

CIO Role: Leadership Skills & AccountabilityCIO Role: Leadership Skills & Accountability

Communication:Communication:How & WhoHow & Who

Where the Gaps AreWhere the Gaps Are

Innovation RulesInnovation Rules

What impact do you expect IT will have on the business in the year ahead? 2007 2006 2005 2004

Enable business innovation 1 3 3 3

Reduce business costs 2 1 1 1

Improve customer satisfaction 3 2 4 4

Create competitive advantage 4 5 2 5

Improve security/risk management 5 4 n/a n/a

Enable new revenue streams 6 8 7 10

Grow existing revenue streams 7 7 6 8

Enable regulatory compliance 8 6 5 9

Enable global expansion 9 9 8 6

Supply chain automation/visibility 10 10 9 7

IT PhilosophyIT Philosophy

IT should supportand enable businessinitiatives36%

IT should proactively

envision business possibilities and

initiate with technology

64%

Are CIOs Spending Time on Are CIOs Spending Time on The Right Things?The Right Things?

THE DAILY GRINDShmoozing, systems and staffing occupy CIOs’ time. But a lack of interaction with customers and partners (#12), given the priorities of the business, should be of concern.

Collaboration Is KeyCollaboration Is Key

Source: IBM Global CEO study 2006Source: IBM Global CEO study 2006

IT is co-leading

innovation initiatives

with business executive sponsors

68%

IT is leading innovation initiatives across the company19%

IT is playing an implementation role only13%

Innovation Is a Team SportInnovation Is a Team Sport

Key Personal Skills for CIO Success?Key Personal Skills for CIO Success?

0%10%20%30%40%50%60%70%80%

Communic

ation

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Strate

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Lead

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Opera

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Change

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Busin

ess k

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Negotia

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Tech

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Tech

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Primary Strength as a CIOPrimary Strength as a CIO

Egon Zehnder InternationalEgon Zehnder InternationalNine Core Competencies For Executive ManagementNine Core Competencies For Executive Management

1.0

2.0

3.0

4.0

5.0

6.0

7.0Results Orientation

Market Knowledge

Commercial Orientation

Strategic Orientation

Collaboration & InfluencingPeople Development

Team Leadership

Change Leadership

Customer Focus

EgonZehnder

International

CIOs: Good (50-85CIOs: Good (50-85thth percentile) percentile)

2.5

3.0

3.5

4.0

4.5

5.0


Market Knowledge




Team Leadership

Change Leadership

Customer Focus

EgonZehnder

International

(n = 25,000 execs across all functions)

CIOs: Good vs. OutstandingCIOs: Good vs. Outstanding

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Results Orientation

Market Knowledge




Team Leadership

Change Leadership

Customer Focus

Outstanding (85th percentile) Good (50-85th percentile)

EgonZehnder

International


““Good” CIOs vs. “Good” CEOs Good” CIOs vs. “Good” CEOs (50-85(50-85thth percentile) percentile)

2.5

3.0

3.5

4.0

4.5

5.0


Market Knowledge




Team Leadership

Change Leadership

Customer Focus

CEO CIO

EgonZehnder

International

““Good” CIOs vs. “Good” CFOs Good” CIOs vs. “Good” CFOs (50-85(50-85thth percentile) percentile)

2.5

3.0

3.5

4.0

4.5

5.0


Market Knowledge




Team Leadership

Change Leadership

Customer Focus

CIO CFO

EgonZehnder

International

CEO/CIO Outstanding (85CEO/CIO Outstanding (85thth percentile) percentile)

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Business Results Orientation

Market Knowledge



Collaboration & InfluenceingPeople Development

Team Leadership

Change Leadership

Customer Focus

CEO CIO

EgonZehnder

International


AmbitionsAmbitions

If you could move into another role inside or outside your company, what would it be?

CIO at a larger company 38%

Remain in current CIO role as long as possible 20%

COO 16%

CEO 8%

Consulting 7%

Line of business head 5%

CFO 1%

Into the FutureInto the Future

The “Future-State CIO” ProjectThe “Future-State CIO” Project

Mission Statement» To clearly articulate the future role of the CIO at its

highest value and most strategic potential and to advance both business and the community of CIOs toward this potential

Chaired by …» Louis Ehrlich, CIO and VP of Global Strategy, Chevron

Corporation

» Marc West, CIO and General Manager of Consumer Markets, H&R Block International

The “Future-State CIO” ProjectThe “Future-State CIO” Project

Three Phases –» Describe – Articulate the skills required to function as a co-

leader of the business

» Measure* -- Create benchmarking tools to measure the skills of individual CIOs and businesses

» Advance – Create development and outreach programs to help advance the CIO community and business towards full potential

* Strategic partnership with Egon Zehnder International to adapt their Management Assessment Methodology to this project

The Future-State CIO ModelThe Future-State CIO Model

1 - Functional Head Operational Excellence

2 - Transformational Leader Alignment and Business Process Transformation 3 - Business Strategist

Enterprise Strategy & Competitive Differentiation

“Executive Competency Index”

“Business Readiness Index”E

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/Cap

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Advancing the conversation into the Advancing the conversation into the Business CommunityBusiness Community

(Page B5)

"Half of my job is now product innovation and understanding market opportunities," says Mr. West, 47. In contrast, at his previous CIO job, 75% of his time was devoted to supporting tech systems, he says.

"Half of my job is now product innovation and understanding market opportunities," says Mr. West, 47. In contrast, at his previous CIO job, 75% of his time was devoted to supporting tech systems, he says.

What a difference a day makesWhat a difference a day makes




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Exp

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Expectation-Capability Gap

Expectation-C

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Advancing the conversation into the Advancing the conversation into the Business CommunityBusiness Community

"Last September, to reflect how his job had spilled beyond tech support, Chevron gave Mr. Ehrlich the additional title of vice president of strategy and services. He has now ratcheted back his supervision of tech systems to just 10% of his time, instead delegating those responsibilities to a subordinate."

"Last September, to reflect how his job had spilled beyond tech support, Chevron gave Mr. Ehrlich the additional title of vice president of strategy and services. He has now ratcheted back his supervision of tech systems to just 10% of his time, instead delegating those responsibilities to a subordinate."

Aligning the business to your capabilitiesAligning the business to your capabilities




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Here’s the challenge: What does this mean for the Here’s the challenge: What does this mean for the profession?profession?

"The CIO title is misused, frankly," says Mr. Ehrlich. If all a CIO does is oversee tech systems, "they should be named a tech manager. A CIO should be enabling a business to grow."

"The CIO title is misused, frankly," says Mr. Ehrlich. If all a CIO does is oversee tech systems, "they should be named a tech manager. A CIO should be enabling a business to grow."

Of IT:

Do a rotation in another part of the business.

The Office:

Go work with your customers, and encourage your team to do the same.

Your Company:

Collaborate with business partners and customers on new innovations.

The Country:

Do a tour of duty at one of your company’s international operations.

Advice for CIOs: Get Out…!Advice for CIOs: Get Out…!

What This Means for You if You…What This Means for You if You…

…Work for a CIO» If you’re in a purely technical position, hone skills» If you’re a manager, you will become the bridge

…Sell to CIOs» Know what kind of CIO you’re dealing with, and what

their context is» Learn your customer’s business

Thank YouThank You

[email protected]@cio.com

www.cio.comwww.cio.com

The Evolution Of Enterprise IT

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