cio 2 final lowres

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Toda challenge,Tomorrow CIOLaying the groundwork and creating conditions or success

Eoling Role o the CIO

IBM Global Business Services


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Introdction

Gone are the days o Chie Inormation Ocers (CIOs)

being responsible solely or delivering reliable Inormation

Technology (IT) to the business. Contemporary CIOs

take a much broader role in the business, driving

business transormation, innovating or competitive

advantage and acting as key strategic partners to the

Chie Executive Ocer (CEO) and wider organisation.

How is this achieved? IBM conducted in-depth ace-

to-ace interviews with CIOs who have either made the

transition to senior roles beyond IT or extended their

responsibilities, keeping IT and including more business

ocus accountability (see Diagram 1). The results conrm

that todays CIOs have the opportunity to extend their

reach and remain relevant to the enterprise o the uture.

The interview results and associated research indicate

that there are three key actors that infuence CIOs

evolution to a more business-ocused role:

ltheir personal profle (personality, background

and skills)

lthe business environment in which they

operate (in particular, the degree o change

happening in the wider enterprise)

l the maturity o the IT unction in which

they operate

O course, every company views the role o IT

dierently and there is certainly room or those that

wish to maintain the traditional role o IT director. But

there is an increasingly wide and exciting range o

opportunities available to CIOs who want to take on

more business responsibility and play a more creative

role in the business.

Peronal profle

In order or CIOs to evolve into a more strategic,

business-ocused role, their personal prole needs to

be geared towards business and change leadership.

They also need to be able to apply these capabilities

to enterprise-wide issues in a way that goes beyond

the technical remit o the traditional IT director.

Bine backgrond

The Evolving Role of the CIO1 described the trend or

CIOs to have more o a mixed background o IT and

business management. Those more predisposed to a

strategic role will oten have had previous experience

managing areas o the business other than IT.

CIOs with broader backgrounds are more likely to

want to lead business discussions and generally have

more empathy with the business. They have managed

other business areas beore and are thereore better

able to build credibility at Board level. They will work

as partners solving business problems, rather than

just providing support.

Strong relationships with Board-level colleagues are

vital or successul evolution. These relationships

enable CIOs to demonstrate that they have the

personal credentials needed to take ownership o

domains beyond the traditional connes o IT.

CIOs need to have a passion or the business.

Business innovation requires emotional empathy

with customers and the business.

- David Lister, Chief Architect, Royal Bank of Scotland

Leaderhip kill

Tomorrows CIOs are likely to have well-developed

leadership capabilities, skilled in creating a vision

or the business and in collaboration, decision-

making and execution. To succeed, they need to

be ocused outwards towards the enterprise and

its customers, as well as inwards towards the IT

organisation. They should be able to articulate where

and how technology contributes to business strategy,

identiying business change issues and driving

operational innovation.


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Theme 3

Aligning IT

and bine

trategie

Theme 2

Deliering IT-

centred change

Theme 1

Keeping the

light on

Theme 1

Keeping the

bine

rnning

Theme 2

Driing

bine

tranormation

Theme 3

Enabling

bine

innoation

Toda Tomorrow

Source: The Evolving Role of the CIO1

Diagram 1: The eoling role o the CIO

The Evolving Role of the CIO1, IBMs recent survey o successul

CIOs rom a number o industries, identifed three transitions

that progressive CIOs make in evolving rom an IT-centric to

a more business-oriented role. They would move:

lrom keeping the lights on to keeping the bine

rnning: CIOs would no longer just be responsible or

providing applications and inrastructure. With the rise

o shared services and outsourcing arrangements, they

would be increasingly responsible or business process

services, too.

lrom delivering IT-centred change to driing bine

tranormation: CIOs would no longer just react to changing

business requirements. They would be at the very heart o

business transormation initiatives, identiying opportunities

or perormance improvement and taking on accountability or

business change.

lrom aligning IT and business strategies to enabling

bine innoation: while todays CIOs would ensure

that IT strategy was aligned with that o the organisation,

tomorrows CIOs would expand possibilities or business

innovation through the use o IT.

Within the enterprise, next-generation CIOs will use

their collaborative skills to build relationships across

dierent areas rather than taking a silo approach. CIOs

oten have a panoramic view o the business, gleaned

rom implementing IT-driven transormational change

across their enterprise. The wider view can give CIOs

deep understanding o the strategic and operational

levers aecting business perormance, a distinct

advantage or stepping into more broadly based roles.

Externally, tomorrows CIOs will be ocused typically

on developing networks o executives across

industries to grow their personal capabilities and to

gain insights that can be applied in their own industry.

Decision-making or tomorrows CIOs will involve

multiple levers, including business processes,

operating models and vendor relationships.

Peronalit trait

IBMs research indicates that CIOs who have made

the transition to a more strategic business role

are oten charismatic, always energetic and have

considerable fair and vision.

Tomorrows CIOs exhibit traits that are distinctly

entrepreneurial they are innovative, inspirational

and willing to challenge the status quo in their

approach to business.

These CIOs are natural networkers who extend

themselves across the enterprise and beyond,

rather than conne their contact only to direct

customers o IT. Their day-to-day ocus does not

lie solely in IT innovation; instead, they are interested

in building creative new business models that apply

to the entire enterprise.


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They have a passion not just or IT solutions, but or

solving knotty issues across the enterprise, using IT

as just one problem-solving tool.

CIOs who evolve into business leadership roles

can drive the enterprise-wide agenda, elevating

their infuence beyond the traditional limits o their

position. They will be invited to lead initiatives

where they can add signicant value to complex,

cross-boundary issues.

Their personal prole a combination o personality,

business background and leadership skills allows

them to go beyond the realms o the traditional CIO.

And crucially, they passionately want to do this.

Bine enironment

Personal prole is not the only actor in the

development o the CIO. The state o the wider

enterprise also has a role to play in determining

whether that evolution will progress or alter;

evolved CIOs take advantage o the opportunity

to grow skills and competencies that their business

environment oers them.

For the CIO to thrive, the business must also

fourish. Another piece o research published by IBM,

The Global CEO Study 2008: The Enterprise of the

Future describes key characteristics o enterprises

with sucient scope to allow the CIO to step into

an evolved role.

The Global CEO Studygathered eedback rom

over 1,100 CEOs world-wide and showed ve traits

which characterise the successul enterprise o the uture.

Diagram shows maturity levels or each o these traits.

Through our interviews with CIOs, we ound that

the enterprise itsel had to exceed the basic level o

maturity or three o the ve traits in order or CIOs

to have enough headroom to demonstrate their

broader operational ability. Lets look at each o

these aspects in turn.

Hngr or change

Its a question o improvement through transormation:

the ultimate aim or the enterprise o the uture will be

an organisation that can change beore being driven to

do so. This involves enterprise-wide change leadership,

combined with expertise in managing a portolio o change

programmes both tried and tested waters or the CIO

with a grounding in leading IT-centred change. Under

these circumstances, ambitious CIOs have an opportunity

to orm and drive business-wide transormation, rather

than be conned to IT-centred change.

Innoatie beond ctomer imagination

As organisations try to exceed their customers

growing expectations, the astute CIO will position

him or hersel at the heart o this mission. Customers

are searching or organisations that oer consistency

o service across an increasing number o channels;

CIOs can answer the challenge through IT-based

innovation, enabling closer collaboration with

customers, at a aster pace and with greater

accuracy and eciency than ever.

The area o ideas I nd most interesting right now is the shit rom the structured world (including

business) o today and yesterday into a more unstructured place in the uture. For the world o the CIO,

this means a shit in many ways, including rom a ocus on technology projects and business cases

towards the implications o truly networked businesses.

- Neil Cameron, Global CIO, Unilever


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For CIOs this will involve traditional IT challenges, such

as extending IT networks. It also allows them to lead

the agenda that includes driving global capabilities,

or example, through business process management

innovations or by developing centres o excellence.

Dirptie b natre

CIOs have a cross-boundary view o the organisation

in which they work. They can see the challenges and

opportunities o new business models in a way that

other Board members may not.

DIsRuPTIvE

By NATuRE

GLOBALLy

INTEGRATED

INNOvATIvE

BEyOND CusTOMER

IMAGINATION

HuNGRy

FOR CHANGE

GENuINE, NOT

JusT GENEROus

Increasinglevelofmaturity

The Enterprie o the Ftre: fe trait o tre cce

Diagram 2: Minimm organiational condition or the CIO role to eole

The Enterprise o the Future will provide the ideal environment or a CIO seeking to expand beyond traditional IT activities. With these

characteristics in place, the motivated CIO will fnd the path to a more business-driven role easier to ollow. Based on interviews with

CIOs who have evolved their roles, the highlighted maturity level or each o the traits o the Enterprise o the Future was the state

o the wider enterprise at the time the evolution took place. For CIOs who are keen to move beyond their traditional IT remit, recognising

this pattern o maturity in their enterprise is critical to identiying opportunities to evolve.

Source: The Global CEO Study 20082

Globall integrated

The globally integrated organisation is joined-up, able

to adjust its business model to be able to do the right

thing, in the right place, to the right level o quality,

at the right cost, or the right price, at the right level

o service, according to IBMs Global CEO Study. It

operates under a fexible business model, based on

common enterprise-wide disciplines, processes and

supporting applications and inrastructure.

Exploring BMIOpportunitie

Radical and PeraieBuine ModelInnoation (BMI)

Multiple BMI

strategie

Implementing BMIInitiatie

Experimentingwith BMI

Exploring GlobalOpportunitie

Global EnterprieInnoation

Globally Integrated

Buine andOperation Model

Building GlobalCapabilitie

sytematically

Driing specificGlobal Initiatie

CutomerIntelligence

Expanding CutomerApiration

Cutomer Collaboratie

Deelopment

Two-way CutomerInteraction

Cutomer InformationTranparency

Anticipating

Proactie Change

Change Becomethe strategy

Ad-hoc andReactie Change

Change Portfolioand Programme

Project DrienChange

RegulatoryCompliance

Corporate socialReponibility (CsR)

a Growth

Efficiency

Through CsR

value-Baedself Regulation

strategicPhilanthropy


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Experience gained in other areas o the business

beore becoming CIO, combined with a deep

understanding o the power o technology to

transorm operating models, will position the CIO

as a driving orce in business model innovation.

Genine, not jt genero

The enterprise o the uture sees corporate social

responsibility (CSR) as an opportunity to stand out rom

the crowd and to grow the business by servicing new

market segments with responsible products and services.

However, CSR requires a high degree o transparency.

Smart CIOs will work with ellow Board members to shape

the CSR agenda, or example, by creating management

inormation systems that give data on the environmental

impact o the organisations sourcing strategy.

The IT organiation

To have scope or the CIOs role to grow, the IT

organisation which he or she leads will need to be

perorming at a mature level. CIOs running mature IT

organisations are not just concerned with traditional IT

issues they are also expected to deliver against the

wider needs o the enterprise.

IBMs Component Business Model or the Business o

IT ramework describes seven core competencies in

a typical IT organisation:

1. IT customer relationship

. service and solution development

. service and solution deployment

. service delivery and support

. inormation management

. IT business management

7. risk and compliance management

O these, the rst our in particular need to be at an

optimised level o maturity to allow the CIO urther

scope or development (Diagram ).

1 IT ctomer relationhip

The CIO and his or her teams ability to manage

good communications and interactions between

IT providers and the users o IT is critical to the

success o both the IT organisation and the larger

enterprise. Fostering good relationships also helps

build credibility and earn trust with the Board.

2 serice and oltion deelopment

A CIO competency that encompasses

development o classic IT activities as well as

service-oriented architecture (SOA) environments

and solutions. An optimised level o perormance

in this ability means that new services are brought

to market quickly and cost-eciently, making a

signicant contribution to business strategy and

competitive advantage.

3 serice and oltion deploment

Covering all aspects o change and release

activity including assignments, scheduling,

synchronisation, installation and monitoring,

the IT organisations capability in service and

solution deployment balances the objectives

o new or revised unctionality with maintaining

service availability. In a mature IT organisation

this enables business capabilities to be rolled

out systematically across the enterprise, which

in turn drives competitive advantage. The CIOs

organisation is seen as crucial to delivering

products to market successully.

4 serice delier and pport

Meeting service requirements within budget and to

a high degree o customer satisaction, while also

delivering IT services as dened by the IT Service

Catalogue is a pre-requisite or the evolved CIO. He

or she can clearly articulate the business benets o IT

services and the impact o IT service ailure in order

to prioritise services across the enterprise. The CIO who

delivers successully is seen as business-aware, ocused

on the same priorities as those o the enterprise.


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CIOs who run an IT organisation with high customer

satisaction; develop and deploy new IT services eciently

and cost eectively, and who deliver pervasive but invisible

support to the business have achieved the undamental

requirements or their personal growth. While the

remaining IT competencies are important, a managed

level o maturity in these areas is enough to enable the

CIOs role to evolve.

5 Inormation management

Here the CIO ocuses on capturing, managing

and distributing onwards business inormation. I

the enterprise can not process inormation well or

rene it into useul insight, it will miss its business

objectives. Managing inormation across the

enterprise so that it cuts across silos and delivers

value through inormation needs a solid base in

clear and reliable processes.

6 IT bine management

Delivering the IT business strategy and IT administration

in a well-run IT organisation adds value by:

integrating business and technology to

ignite innovation

creating and delivering integrated business

strategies that leverage technology, while

measuring and managing the money spent

(and the value received) rom the IT portolio

actively communicating the business value

o IT investments

For the CIOs role to evolve, the CEO and the

executive team need to have a clear understanding

o the value-add IT brings to the business.

Diagram3: IT organiation competenc matrit leel

IT ctomer relationhip

serice and oltion

deelopment

serice and oltion

deploment

serice delier and pportInormation management

IT bine management

Rik and compliance

management

5

4

3

2

1

0

Matrit leel Defnition

1. BaicIT Processes/services/solutions not ully documented and not standardised across business units

Processes/services/solutions not aligned to business needs

2. ControlledIT processes/services/solutions are designed or parts o the major business areas, but not coherent enough to

meet all business needs

3. ManagedIT processes/services/solutions are designed or all the major business areas based on business needs

Understanding the business needs and designing the IT strategy are ormulated at some level

4. OptimiedIT processes/services/solutions contribute to the business area, with understanding o the management plan

and business needs

5. AdancedIT processes/services/solutions contribute to the business area, with understanding o how IT can drive

business strategy and vice versa

Source: Component Business Model for the Business of IT3and IBM research


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7 Rik and compliance management

The last competency ocuses on risk management,

enabling rms to rapidly adapt and respond to any

internal or external opportunity, demand, disruption or

threat. Silent running o this competency is needed to

demonstrate control o the traditional IT unction.

To evolve into a more business-ocused role, CIOs will

have developed their IT organisation to an appropriate

level o maturity, while gaining respect or their

achievements rom their peers across the enterprise. The

IT organisation will be run as a business unit, with pricing,

services and perormance comparative to the market.

The value o IT will be clearly understood by key business

stakeholders, with whom the CIO will enjoy productive

relationships. In short, the CIO who is ready to evolve will

have created a successul IT organisation that is ready

and able to support his or her uture development.

Conclion

Based on IBMs research, there are three key actors that

infuence the CIOs evolution to a business-ocused role.

O these three, personal prole is the most important

all CIOs interviewed took personal initiative to drive

their own evolution. The second most important actor

in evolving is the context o the wider enterprise, since a

turbulent environment will create countless opportunities

or ambitious CIOs to grasp. Finally, the health o the IT

organisation itsel, where the CIO will need to demonstrate

exemplary capabilities in managing their own ground,

serves as the minimum platorm or growth.

The CIO cannot evolve without Board-level

acceptance. The CEO and ellow executives must be

convinced that the incumbent CIO is able to step up

to broader responsibilities while continuing to deliver

excellent IT services and applications.

Tomorrows CIOs need to be sel-aware, smart about

their business environment and agile enough to build

a strategy or their personal success. As the orces

o change grow stronger, the pressures on CIOs to

evolve will only increase. Those who step up and

create their own opportunities will be in a better

position to take control o their careers.

While the traditional responsibilities o the CIO role will

remain, the role will become broader. In uture, CIOs

perorming a 100 per cent traditional role may only

exist in organisations that do not value IT as a key

strategic business driver.

However, CIOs capable o crating a post-evolutionary

role are likely to progress to Board level with aspirations

o reaching COO or even CEO. CEOs in the 190-190s

oten came rom a sales and marketing background; in

the 1990s-000s CEOs were more likely to come rom

backgrounds dealing with nance and risk management.

In uture, CEOs may well come rom the ranks o those

with deep-rooted IT service, transormational change and

business innovation experience, especially those who

have grown up with technology and who see IT as part

o the status quo. For CIOs willing to grasp the nettle,

the opportunities are immense.

As a result o my infuence, the business changed its perception o how the CIO should be involved and

this was catalysed by it being a time o accelerated organisational changethe business came around to the

view that the CIO should be held accountable or the business, as well as IT deliveries/outcomes/results and

I was able to gain greater infuence and involvement in business executive teams.

- Gary Edwards, CIO, Cattles


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Peronal profle Well honed CxO level capabilities

Able to create a vision or the organisation with a clear understandingo the role o IT in business strategy and operating model innovations

Externally, ocused on developing networks o equivalent executivesacross industries

Internally, ocused on building links and relationships across multiple andcomplex areas o the business with a cross enterprise view

Communications are ocused on enterprise-wide benefts, based ondeployment o multiple levers, eg IT, business processes, vendor relationships

Execution includes IT and business areas not directly related to IT to anequal extent

A natural at networking, curious about the total enterprise, innovative,has entrepreneurial spirit and great at building relationships

Bine enironment Signifcant levels o external actors impacting the organisation

Organisation response to external drivers o change is multiaceted throughtransormation in all aspects o the organisation

The enterprise is striving to become an Enterprise o the Future with

plenty o opportunities or the CIO to extend his or her impact and movethe organisation orward

IT nction A mature, well run IT unction that delivers business value to the organisation

The IT unction excels in core IT activities, such as IT service and solutiondevelopment and delivery, IT service and support, and customer relationship

Diagram4: smmar o characteritic needed or the CIO role to eole


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Frther inormation

For more inormation please send an

e-mail to [email protected] or visit

ibm.com/services/uk/cio/evolving_role_o_cio

Abot the athor

Robin Riordan is a Partner in IBM Global Business

Services and leads the Strategy and Change

Consultancy practice in the Distribution Sector

covering Pharmaceutical, Retail, Travel and Transport

and FMCG clients. Robin has a wealth o experience

in IT transormation and governance, IS strategy

development, strategic IT/ Business transormation

outsourcing, IT systems integration strategy and

major change programme leadership.

Email: [email protected]

Janet White is a Senior Managing Consultant in

IBM Global Business Services working in the Strategy

and Change Consultancy practice ocusing on

Technology Strategy consulting. Janet works with

clients across industries to develop IT strategies,

designing and implementing IT transormation

programmes or global organisations.


Acknowledgement

Special thanks to Jeremy Book, Mariellen Romer

and Julian Ashley or their contribution to the

development o this paper.

Abot the Exectie sponor or

the Eoling Role o CIO erie

David K. Henderson is a Partner in IBM Global

Business Services consulting practice. David has over

0 years o experience in multiple client industries, working

with clients to develop IT strategies, design and implement

IT transormations. David is a Fellow o the Institute o

Management Consultants, the Chartered Institute o

Management and the British Computer Society.


Abot IBM Global Bine serice

With business experts in more than 170 countries,

IBM Global Business Services provides clients with

deep business process and industry expertise across

17 industries, using innovation to identiy, create

and deliver value aster. It oers one o the largest

Strategy & Change practices in the world, with over

,0 strategy proessionals. IBM GBS draws on the

ull breadth o IBM capabilities, standing behind its

advice to help clients implement solutions designed

to deliver business outcomes with ar-reaching impact

and sustainable results.

Reerence

1 Henderson, David K. The Evolving Role o the CIO.

IBM Global Business Services. March 00.

http://www.ibm.com/services/uk/cio/pd/ciw000-

gben-00_.pd

The Enterprise o the Future: The Global CEO Study

00. IBM Global Business Services. May 00.

http://www.ibm.com/ibm/ideasromibm/us/

ceo/0000

Component Business Model or the Business o IT.

IBM Global Business Services. Updated 00.


11/1211


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