Presented by: How Strategic CIOs Are Changing The Dynamics of the Business Enterprise Phil Weinzimer President, Strategere Consulting Tuesday November 4, am Breakout Session I

Phil Weinzimer ©2014 Strategere Consulting Strategere Consulting

©2014 Strategere Consulting Implication Theme Consumerization of IT CIOs & IT Partner in Business Teams IT needs to develop business skills to collaborate in business teams that create new markets and competitive opportunities. Increased Pressure to Increase Pace of Change IT organizations need to improve throughput/ organization agility Role of CIO / IT Play an important strategic role in leveraging information and technology for competitive advantage Consumers demand new/information rich products and services, which impact business personnel across the entire value network. Today’s Realities

Forewords Rob Carter – CIO, FedEx Filippo Passerini-CIO, P&G

Value Strategic IT Organization Transformation Phases 4. Leverage Technologies Strategically to Innovate Value 3. Implement Initiatives to Improve Margin (Sales / Cost) 2. Understand the Business, Focus on User Experience, and Improve Business Skills of IT Personnel 1. Deliver Commodity and Business Services Exceptionally Well ©2014 Strategere Consulting Time

6 How Strategic is Your IT Organization? Deliver Commodity and Business Services Exceptionally Well Understand Business, Focus on User Experience / Improve Business Skills Implement Initiatives to Improve Margin (Sales / Cost) Leverage Technologies Strategically to Innovate Value ©2014 Strategere Consulting

How Strategic is Your IT Organization? Tactical Business Value Strategic EfficientInefficient IT Efficiency Tactical Focus Inefficient Delivery Strategic Value Delivered Inefficiently Tactical Focus Efficient Delivery 7 Strategic Value Delivered Efficiently ©2014 Strategere Consulting

8 1. Deliver Commodity and Business Services Exceptionally Well Strategic IT Organization Transformation Phases You will never partner or build credibility with the business if the IT organization delivers services that disrupt daily work activities…Mike Hedges, CIO - Medtronic ©2014 Strategere Consulting

9 Identify Basic Services Identify Key Stakeholders Develop Business Services Catalogue Develop / Execute Work Plan Socialize Across Enterprise Continuously Improve A Common Process to Improve Delivery of Services 6 7 Measure Service Delivery An Incremental Roadmap to Develop Exceptional Business and Commodity Services Incremental Quick Wins Steps Build upon Each Other Duration Depends on Organization 4 ©2014 Strategere Consulting

10 ©2014 Strategere Consulting

11 Improve Project Governance Improve Value to Georgia Citizens As the stewards of taxpayer dollars, we need to ensure project success through a well-defined and proven governance process… Calvin Rhodes, CIO-State of Georgia Identifies the Key Predictors for Project Success Proactive versus Reactive Solution Promotes Teaming through Active Communication via Assessment Process Multi Million Dollars Savings to Reinvest in Innovative Projects

12 2. Understand the Business, Focus on User Experience, and Improve Business Skills of IT Personnel “I learned the business quickly participating in business simplification initiative, which involved all major work processes”.. Mike McClaskey –CIO, Dish Network ©2014 Strategere Consulting

13 2. Understand the Business, Focus on User Experience, and Improve Business Skills of IT Personnel “I spent time at our satellite uplink installation where our giant 10-meter dishes link to satellites distributing the video products customers receive through their dishes.” “I also spent days in a truck with an installation technician, including a snowy, below-zero day watching our technician install the satellite dish atop a customer's roof and interact with the customer during the installation process.” “I spent days in a call center wearing a headset and listening in on customer service calls sitting aside a customer service agent”. Mike McClaskey –CIO, Dish Network ©2014 Strategere Consulting

14 Improving Business Skills of IT Personnel ©2014 Strategere Consulting

15 BUSINESS KNOWLEDGE (Business Awareness Skills) ©2014 Strategere Consulting

16 MARKET KNOWLEDGE (Strategic Product/Market Skills) ©2014 Strategere Consulting

17 TECHNOLOGY PROWESS (Strategic Technology Skills) ©2014 Strategere Consulting

18 CROSS COMPETENCY Leadership Skills ©2014 Strategere Consulting

19 TECHNOLOGY PROWESS (Strategic Technology Skills) BUSINESS KNOWLEDGE (Business Awareness Skills) Environment Opportunities Process Centric Technology Strategy / Adaptability Organization Agility Strategic Project Capability Strategic IT Organization Competencies and Skills Framework MARKET KNOWLEDGE (Strategic Product/Market Skills) Product Knowledge Industry Insight Competitive Landscape Vision Organization Culture Leadership Communication CROSSDIMENSION COMPETENCIES ©2014 Strategere Consulting

20 Strategic IT Organization Competencies and Skills ©2014 Strategere Consulting

21 ©2014 Strategere Consulting Knowledge How to Use a Hammer How to Build A House Applying Knowledge vs. How to Measure Competencies and Skills ?

22 Business Knowledge Market Knowledge Technology Prowess Cross Competency Skills What is the Maturity Score of Your IT Organization Strategic Competencies and Skills? 15 ©2014 Strategere Consulting

Business Knowledge Market Knowledge Technology Prowess Cross Dimension Average Maturity Cost Benefit Range Maturity Level % 15-35% 5-15% Optimized Need to Improve Knowledge and Skills Continuous Improvement Drives Additional Outcomes Greatest Opportunity to Create Business Outcomes Skill Knowledge Low Value Cost Center Valued Business Partner Applying Skills for Business Outcomes Inefficient Reevaluate Knowledge and Skills Training 25-50% 15-35% 5-15% How to Measure Your IT Organization Strategic Competencies and Skills 23 ©2014 Strategere Consulting

24 Strategic IT Organization Maturity Assessment – Summary 6 Month Assessment Compared to 2 Year Assessment ©2014 Strategere Consulting

25 Strategic IT Organization Transformation Phases 3. Implement Initiatives to Improve Margin (Sales / Cost) 21st-century CIOs have a dual responsibility: driving down costs and creating new business value. Managing this seeming dichotomy is the domain of top business executives, and CIOs everywhere are learning to step it up …Randy Spratt, Executive Vice President, CIO/CTO - McKesson

26 Increase the Speed of Integrating Acquired Businesses 12 Weeks 3 Weeks 75% Improvement $$$ Benefits Realization The team documented the information into a "process play book," defining the specific processes, work activities, and artifacts used by all McKesson departments for integrating actions. “We need to improve the integration process. The faster we integrate, the sooner we will derive the economic benefit” ©2014 Strategere Consulting

27 Strategic IT Organization Transformation Phases 4. Leverage Technologies Strategically to Innovate Value Value comes from seeing what customers need and delivering it…..James McQuivey, Forrester Research ©2014 Strategere Consulting

4. Leverage Technologies Strategically to Innovate Value “Our role is to help the business make well-informed business decisions” Filippo Passerini-Group President-Global Business Services Group President, Chief Information Officer, P&G 28 Inaugural Recipient, Fisher-Hopper Prize for Lifetime Achievement in CIO Leadership, UC-Berkeley’s Haas School of Business, 2012 ©2014 Strategere Consulting

“What Matters is What is Changing”…Filippo Passerini Analytics: The New Path to Value; MIT Sloan Management Review; Research Report; Fall 2010; October 2010;' Leverage Technologies Strategically to Innovate Value 29 Historical trend analysis / forecasting / standardized reporting Data Visualization Simulation Scenario Development Analytics Modeling ©2014 Strategere Consulting

4. Leverage Technologies Strategically to Innovate Value Create Information Democracy Competency Debating data accuracy creates wasted energy. Employees around the world make decisions every day. “By having access to the right data at the right time, we can make informed decisions and address the needs of our customers and consumers." 30 Changed the name of IT organization to Information Decision Solutions (IDS) to focus on value-added solutions Develop a Digitize, Visualize, and Simulate data strategy to manage, display, and model data. ©2014 Strategere Consulting

31 Decision Cockpits 4. Leverage Technologies Strategically to Innovate Value Develop a Digitize, Visualize, and Simulate data strategy to manage, display, and model data. Digitize Tom Davenport -HBR; ©2014 Strategere Consulting

32 4. Leverage Technologies Strategically to Innovate Value Develop a Digitize, Visualize, and Simulate data strategy to manage, display, and model data. Virtualize The Virtual Shelf ©2014 Strategere Consulting

4. Leverage Technologies Strategically to Innovate Value Business Sphere Conference Rooms Simulate Develop a Digitize, Visualize, and Simulate data strategy to manage, display, and model data. 33 ©2014 Strategere Consulting

34 4. Leverage Technologies Strategically to Innovate Value "Kids brains are wired differently than those of previous generations. They live in a world centered on technology” “We wanted to create an experience leveraging technology to innovate value for our customers” David Finnegan, CIO ©2014 Strategere Consulting

35 4. Leverage Technologies Strategically to Innovate Value “When you talk about innovation, it's often difficult to really understand the concept unless you can actually experience it.” David Finnegan, CIO Cub Advisory Board ©2014 Strategere Consulting

36 4. Leverage Technologies Strategically to Innovate Value Love Me Station Hear Me Station Fluff Me Station Earned Friendship Station The Store of the Future ©2014 Strategere Consulting

37 Value 3. Implement Initiatives to Improve Margin (Sales / Cost) 2. Understand the Business, Focus on User Experience, and Improve Business Skills of IT Personnel 4. Leverage Technologies Strategically to Innovate Value Strategic IT Organization Transformation Phases Time Summary 1. Deliver Commodity and Business Services Exceptionally Well ©2014 Strategere Consulting

Phil Weinzimer ©2014 Strategere Consulting