strategy execution and the role of the cio/it · – banco bradesco s.a. (brazil) – banco itaú...

Center for Information Systems Research (CISR) © 2009 MIT Sloan CISR - Ross

Jeanne W. RossDirector & Principal Research Scientist

Center for Information Systems Research (CISR)MIT Sloan School of Management

Phone: (617) 253-2348, Fax: (617) [email protected]; http://mitsloan.mit.edu/cisr/

Strategy Execution and the Role of the CIO/IT

This research was made possible by the support of CISR sponsors and patrons.

March 6, 2009UVA Center for the Management of Information Technology

Center for Information Systems Research (CISR) © 2009 MIT Sloan CISR - Ross 1

CISR’s Mission• Founded in 1974; CISR has a strong track

record of practice-based research on how firms manage & generate business value from IT

• Research is disseminated via electronic research briefings, working papers, research workshops & exec. ed. programs including http://mitsloan.mit.edu/cisr/education.php

2009 CISR Research ProjectsThe View from the Top: IT and Business Value

• Achieving Superior Business Value from IT—A Single Framework of What Matters

• Communicating Effectively about IT Value• Maturing and Globalizing IT Governance

Building and Leveraging IT’s Assets

• Managing Business Experiments: Web-based Innovations in Collaboration

• Learning from IT Projects: Effective Post-Implementation Reviews

• Benchmarks for IT Decision Making

Managing Digitized Organizations

• Leading the Transition to the Digitized Platform• Designing and Managing Shared Services• Managing the Information Explosion• Making Sense of “the Cloud”

– Boston Consulting Group– BT Group– Diamond Management &

Technology Consultants

– Gartner– IBM Corporation– Microsoft Corporation– Tata Consultancy Services

Contact Information:5 Cambridge Center, NE25-778Cambridge, MA 02142Ph. 617-253-2348; Fax 617-253-4424 E-mail [email protected]; http://mitsloan.mit.edu/cisr/

MIT CISR gratefully acknowledges the support& contributions of its Research Patrons and Sponsors.

– Aetna Inc.– Allstate Insurance Co.– ANZ Banking Group

(Australia)– AstraZeneca

Pharmaceuticals, LP– Banco Bradesco S.A.

(Brazil)– Banco Itaú S.A. (Brazil)– Bank of America– BP– Campbell Soup Co.– Canadian Imperial Bank

of Commerce– CareFirst BlueCross

BlueShield– Caterpillar, Inc.– Celanese– Chevron Corp.– CHRISTUS Health– Chubb & Son– Commonwealth Bank

of Australia– Credit Suisse

(Switzerland)

– Det Norske Veritas(Norway)

– DHL Global ManagementGmbH (Germany)

– Direct Energy – Embraer – Empresa

Brasileira de AeronauticaS.A. (Brazil)

– EMC Corp.– ExxonMobil Global

Services Co.– Fidelity Investments– Grupo Santander Brasil– Guardian Life Insurance

Co. of America– Johnson & Johnson– Hartford Life, Inc.– HBOS Australia– ING Groep N.V

(Netherlands)– Intel Corporation– Int’l Finance Corp.– Liberty Mutual Group– Marathon Oil Corp.– Mars, Incorporated– MetLife

– Mohegan Sun– NASA– Nissan North America– Nomura Research

Institute, Ltd. (Japan)– Parsons Brinckerhoff– PepsiAmericas, Inc.– PepsiCo International– Pfizer Inc.– PNC Global Investment

Servicing– Procter & Gamble Co.– Quest Diagnostics– Raytheon Company– Renault (France)– Standard & Poor’s– State Street Corp.– Sunoco, Inc.– TD Bank– Time Warner Cable– Trinity Health– TRW Automotive, Inc.– Unibanco S.A. (Brazil)– VF Corporation– Wal-Mart, Inc.– World Bank

Research Patrons

Research Sponsors

Center for Information Systems Research (CISR) © 2009 MIT Sloan CISR , 20-Feb-09


Agenda

Why Firms Need a Digitized PlatformWho Will Own the Platform? The SEO– Three key SEO responsibilities

– Two Models of CIOs as SEOs

– The non-IT SEO

How the SEO EvolvesThe Future of the CIO


The IT landscape at most firms

Corporate Data

Technology Platforms

Applications

Data


The vision for the future systems landscape

Data Warehouse

Technology Platforms

Applications

Data

Middleware


Business Silos

StandardizedTechnology

OptimizedCore

BusinessModularity

Business Agility

25% 46% 27% 2% % of Firms

Companies build their platforms in stages.

Source: Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, J. Ross, P. Weill, D. Robertson, HBS Press, 2006.Percentage of firms in each stage is updated based on a 2007 survey of 1508 IT executives.

Standardized Enterprise

Processes/Data

StandardInterfaces

and BusinessComponentization

Enterprise-Wide Technology Standards

Locally Optimal Business Solutions


The strategy execution officer (SEO) owns the platform

Enterprise IT & Process

Governance

(11)

Project Design & Implementation

(10)

Ongoing Operations/ Continuous

Improvement

(4)

Designs Platform

Builds Platform Components

Leverages Platform

Numbers reflect how many of 12 SEOS we studied defined each responsibility.

3 roles of the SEO:


Ensure clarity among senior executives about platform design.Coordinate demands for enterprise change projects, most of which involve IT implementations.Establish priorities for change projects based on multiple criteria:– Organizational readiness

– Contribution to platform

– Ability to use platform

– Expected benefits

Work with senior executive team which either makes investment decisions or approves SEO recommendations.

Responsibility 1: IT and Process Governance


Ensure disciplined, effective project methodology.Engage all key stakeholders early and often.Provide expertise on process design.Provide oversight and/or support of change management.

Responsibility 2: Project Design/Implementation


Provide enterprise services, usually as a shared services organization.Accept accountability for continuous improvement of the platform. Ensure that the enterprise is driving value from the platform.

Responsibility 3: Ongoing Operations


1. The all-inclusive SEO– Owns all three SEO

responsibilities

2. The partnered SEO– Owns first two

responsibilities and works closely with a COO or other operational leaders

Two Models of CIOs in SEO Roles


The SEO: Dave Kepler, VP of Shared Services and CIO, Dow Chemical Company.SEO background: Started as CIO; role grew as CEO added responsibilities.Core of the platform is an SAP ERP, implemented in early 1990s.Shared services organization includes IT, six sigma team, customer service, supply chain, and purchasing processes.6,000–7,000 of company’s 40,000 employees report to SEO.IT operations outsourced to IBM; Accenture is strategic partner for applications development.Growing responsibilities of the SEO facilitate global integration.

Model 1: Dow Chemical’s Inclusive SEO

Source: Dow Chemical Company. Used with permission.

See also: Ross and Beath, “The Federated Broker Model at The Dow Chemical Company: Blending World Class Internal and External Capabilities,” MIT Sloan CISR Working Paper No. 355, July 2005.


Dow Chemical Company Shared Services Unit

Customer Service Centers

E-Business

Customer Information Group

Order to Cash Work Process

All IT Operations and Services Management

Facilities Management

Application Development and Support

Chemicals and Intermediates

Hydrocarbons & Energy

Performance Chemicals and Thermosets

Plastics

I.T. Strategy and Architecture for Dow

Six Sigma Expertise

Implementation Work

Process

Work Process Expertise

Center

Finance

Communications

Human Resources

Legal

*Aligned to Business Leaders

Source: Dow Chemical Company. Used with permission.

See also: Ross and Beath, “The Federated Broker Model at The Dow Chemical Company: Blending World Class Internal and External Capabilities,” MIT Sloan CISR Working Paper No. 355, July 2005.

President and COOThe Dow Chemical Company

Andrew Liveris

Corporate Vice PresidentShared Services

Dave Kepler

Six Sigma andWork Process

Expertise CenterGlobal PurchasingCustomer Service

Dow and AccentureAlliance

Enterprise ITOperations

and Services

Chemicals andPlastics*

Dow AgroSciences*

Global Supply ChainInformation Systems

Dave Kepler, CIO

Supply Chain Services& Technology Center

Chemicalsand Intermediates*

Dow AgroSciences*

Hydrocarbonsand Energy*

PerformanceChemicals

and Thermosets*

Plastics*

Support Services


Model 2: Southwest Airlines’ Partnered SEO

The SEO: Bob Jordan, EVP of Strategy and Technology, Southwest Airlines.SEO background: Previously head of Technology, Corporate Facilities and Procurement; has an IT background and has gradually assumed more responsibility for IT and change management.Platform development focused on ground and customer operations.Coordinates efforts of seven strategy teams (e.g., best place to work, largest domestic carrier, low-cost carrier, best customer experience).Teams comprised of 30 top executives, each is on more than one team so that they acquire cross-functional view of the firm.Investment decisions made by Executive Planning Committee (top eight executives) but guided by strategy teams.Strategy leaders participate in monthly project reviews to ensure progress and eventual business success.SEO heads corporate project management office. Team of 25 includes project and change managers. They lead projects but business heads are accountable.

Source: Southwest Airlines. Used with permission.

See also: Ross and Beath, “Building Business Agility at Southwest Airlines,” MIT Sloan CISR Working Paper No. 369, May 2007.


Southwest Airlines’ Senior Executive Team

Colleen BarrettPresident & Corporate Secretary

Greg WellsSr. VP - Operations

Daryl KrauseSr. VP - Inflight & Fleet

Services

Ginger HardageSr. VP - Corporate Communications

Source: Southwest Airlines. Used with permission.

See also: Ross and Beath, “Building Business Agility at Southwest Airlines,” MIT Sloan CISR Working Paper No. 369, May 2007.

Ron RicksExecutive VP - Law, Airports, &

Public Affairs

Gary C. KellyVice Chairman and CEO

Jeff LambSr. VP - Chief People & Administration Officer

Kevin KroneVP - Marketing, Sales, &

Distribution

Joe HarrisLabor & Employee Relations

Ellen TorbertVP - Reservations

Jim RuppelCustomer Relations &

Rapid Rewards

Laura H. WrightSr. VP - Finance & Chief

Financial Officer

Bob JordanExecutive VP - Strategy &

Technology

Mike Van de VenExecutive VP & Chief of

Operations

Jan MarshallVP - Technology & Chief

Information Officer

Strategy

Codeshare Business Development

Jim SokolVP - Maintenance &

Engineering

Chuck MagillVP - Flight Operations

Barry BrownVP - Safety & Security


Campbell Soup's Process Owners

The Process Owners: David White, SVP; Global Supply Chain, Bob Schiffner, CFO; Doreen Wright, CIOProcess owners' background: each head of one core process– David White brought in to Campbell to head new supply chain

processes (make to buy)– Bob Schiffner created finance shared service to head new account

to report process– Doreen Wright headed order to cash, but handed off to new VP of

customer service

Core of platform: SAP supporting 3 core business processesIT and business managers team up on Centers of Excellence to drive new processes and process improvementsIT operations outsourced to IBMCarefully designed project governance clarified responsibilities for implementation; then shifted to COEs.


Roles and responsibilities change as firms transition from transformation to driving value from a digitized platform.

Use the Platform: Establish compliance and exception processes

Build the Platform: Set priorities and provide focus on critical processes

Use the Platform: Assign high-level process owners; establish centers of excellence and shared services

Build the Platform: Create high-powered, full-time team to design and implement transformed processes

Use the Platform: Develop incentives and accountability for using data and services

Build the Platform: Provide training required for new roles, new mindset, and unlearning of habits

Governance

Process Ownership Roles

People Development


SEO: head of digitized business processes and servicesCTO: technical leader working closely with IT savvy business leadersBusiness partner: part of the senior management team designing processes and servicesProfit center leader: business head of services unit selling business and IT services to organizational entitiesChange leader: IT split between CIO (change management) and COO (operations)

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strategy execution and the role of the cio/it · – banco bradesco s.a. (brazil) – banco itaú...

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