Who's Calling the Shots? - The CIO's Role as a Key Business Influencer

www.idc.com

Who's Calling the Shots? - The CIO's Role as a Key Business Influencer

Puni RajahVice President, Research

IDC Asia/[email protected]

The Evolving Role of CIOsThe Evolving Role of CIOs

Value Explorers

Fiscal Traditionalists

Strategic Value Trackers

Value Cycle Winners

Business Value Definition(Knowing how and where Business value is

manifested from IT)

Mea

sure

men

t S

op

his

tica

tio

n

(Kn

ow

ing

ho

w t

o t

rack

IT

val

ue)

Source: IDC CIO Advisory, October 2003

PerspectivesPerspectives

IT Matters to business– what LOB managers tell us in the 2004 Barometer survey

Projects Start from WithinProjects Start from Within

Source: IDC Relationship Influence Study, 2003

What Initiates an IT Need?

N = 195

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

Other

Sales call

Vendorads/promotions

Consultant/SIrecommendation

Internal processimprovement

Percentage of Respondents

Business BarometerBusiness Barometer

An annual survey of LOB managers– capable of measuring reality of ‘Does IT Matter’

Telephone survey, targeting two distinct groups– companies with market-average growth performance– companies with above-average growth performance

Across 12 vertical business segments

Business Executives’Engagement Is IncreasingBusiness Executives’Engagement Is Increasing

Source: IDC’s LOB Executive Survey, January 2004

Q: How do you see your involvement in IT decision-makingchanging in the next year?

Decreasing1.5%

Don’t know1.8%

Increasing25.6%

Staying the same71.1%

1 – not important

2.2%

314.3%

24.4%

5 – very important

55.3%

423.8%

Strategic Value of IT to the Business — ExecutionStrategic Value of IT to the Business — Execution

Q: How important are IT systems and applications to theexecution of your company’s business processes?

Note: The responses are based on a 1–5 scale, with 5 meaning “very important” and 1 meaning “not important.”


Business Executives Want to “Play Offense” with ITBusiness Executives Want to “Play Offense” with IT


Q: Considering your business strategy, should yourcompany use technology?

Less aggressively

2.2%

More aggressively

54.9%

Same as today42.9%

IT Is Now Integral to Business ManagementIT Is Now Integral to Business Management

1 – not important

3.6%

313.2%

24.8%

5 – very important

38.8%

439.6% Source: IDC’s LOB Executive Survey, March 2004

Q: When hiring a business manager, how important that he/she be “IT-savvy”?

“IT savvy” described as – “they know about how IT supports business operations, how your competitors use IT to support their business, etc.”



Delivering business solutions is more complex than ever– software trends– project and business complexity trends

Challenges Will ContinueChallenges Will Continue

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Log of WW Software Revenues

Source: IDC, 2003

System SW, languages,

mfg. & acct’g applications

Integrated system mgt. & applications,

automated tools

Self-describing content & apps., natural interfaces

Complexity Complexity Crisis!Crisis!

Information ‘Infrastructure’ Information ‘Infrastructure’

Track

Analyze

Model

Interact

Adjust(PolicyHub)

TransactionProcessing

Track

Analyze

Model

Interact

Adjust(PolicyHub)

ContentManagement

Collaboration

Businessrules Analytics

Structured data,

content

Collaboration

AnalyticsContent




Building trust to facilitate influence– the Fedex case study

Fedex “trusted partner” programFedex “trusted partner” program

“Trusted partner” attributes: Listens and seeks to understand the business area's

perspective Has a sense of business and can be a productive participant in

the business process Shares knowledge and makes sure business partners grasp the

IT work involved Is accountable. Taking responsibility, meeting commitments,

and being dependable establishes trust. Is customer focused and ties its own success to partners'

success. Is responsive and shows a true commitment to the particular

business area and its needs. Respects partners and treats them as equals. Is open and honest and demonstrates integrity.

Statement from Fedex on ROI of “trusted partner”Statement from Fedex on ROI of “trusted partner”

“The heavy focus on trusted partners is so new that it’s difficult to measure in terms of return on investment. Our budget is minimal. Anecdotally, however, we’ve seen IT workgroups with strong trusted-partner relationships complete tough projects more than 50% quicker and much cheaper than average.”

Fedex’s “High Touch” Plan for building Trusted PartnershipsFedex’s “High Touch” Plan for building Trusted Partnerships

Week 1: Present overall communication plan to executive committee and senior IT execs to get their buy in and support as the program moves forward

Weeks 2-4: Develop manager-workshop curriculum and internal campaign materials

Weeks 5-6: Present curriculum to managers at the director’s level and above

Weeks 7-8: Present workshop curriculum to other managers

Weeks 9-10: IT project team managers develop implementation plans for becoming trusted partners. Send plans up the management chain of command for review and input

Weeks 11-12: IT management team members review and comment on client plans, and brief colleagues at IT management team meeting. IT management team works with these direct reports to revise plans and begin implementation, Determine and schedule training to fill gaps in skills (listening, presentation development, writing, meeting management)

Week 13: Hold ongoing client meetings. Report status. Continue to build relationships. Schedule review meetings with clients to determine how the program is being received and to plan the next 90 days.




Building trust to facilitate influence– the Fedex case study

Organizational approach to facilitating influence

CIO RoleCIO Role

Business Finance Technology

Effective Budgeting

Results Management

Performance Management

Strategic IT Ambassador

The preferred approach today is a “centrally managed” IT organization – the dotted line

reporting relationships in IT departments are very strong

Source: IDC, #30216, CIO As a Key Influencer

Two Discrete but Inter-dependent GoalsTwo Discrete but Inter-dependent Goals

IT OPERATIONAL EXCELLENCE

IT-ENABLED BUSINESS

• Standardization• Consolidation• Centralization• Integration• Quality Assurance• Project Management• Efficient Procurement• Reuse• Financial Management• Risk Management

• Efficiency• Flexibility• Relevance• Profitability

Unless the IT/business relationship is systemic it is difficult to maintain the equilibrium between these two goals – this requires a planned, conscious transformation


A programmatic approach is criticalA programmatic approach is critical

Starts with building strong relationships and partnerships on the inside and then working outward

Leadership from senior executives demonstrating (not merely asserting) the importance of IT and business working together

Changes in hiring practices, pay-incentive programs, employee deployment, training and education programs, etc. may be required

Involves all levels of employee – consistency in message and commitment to IT/business alignment


Take awaysTake aways

Senior executives’ IT knowledge and CEO commitment to IT’s critical role as a business enabler are key contributors to the CIO’s ability to influence the business

The CIO (and other IT professionals) have a responsibility to educate non-IT executives and other professionals about the contribution technology can make to the business – this requires IT professionals to build very strong relationships across the organization

IT/business understanding at all levels increases the likelihood of becoming a profitable IT-enabled business and minimizes the risk of becoming a business that is a slave to IT hype

Achieving a satisfactory IT/business partnership depends on a programmatic approach to “high touch” interaction much more than on service level agreements

Contact InfoContact Info

Please email me [email protected]

Who's Calling the Shots? - The CIO's Role as a Key Business Influencer

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