Who's Calling the Shots? - The CIO's Role as a Key Business Influencer Puni Rajah Vice President, Research IDC Asia/Pacific

The 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) Measurement Sophistication (Knowing how to track IT value) Source: IDC CIO Advisory, October 2003

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

Projects Start from Within Source: IDC Relationship Influence Study, 2003 What Initiates an IT Need? N = 195

Business 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 Increasing Source: IDC’s LOB Executive Survey, January 2004 Q: How do you see your involvement in IT decision-making changing in the next year? Decreasing 1.5% Don’t know 1.8% Increasing 25.6% Staying the same 71.1%

1 – not important 2.2% % 2 4.4% 5 – very important 55.3% % Strategic Value of IT to the Business — Execution Q: How important are IT systems and applications to the execution 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.” Source: IDC’s LOB Executive Survey, January 2004

Business Executives Want to “Play Offense” with IT Source: IDC’s LOB Executive Survey, January 2004 Q: Considering your business strategy, should your company use technology? Less aggressively 2.2% More aggressively 54.9% Same as today 42.9%

IT Is Now Integral to Business Management 1 – not important 3.6% % 2 4.8% 5 – very important 38.8% % 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.”

Perspectives  IT Matters to business –what LOB managers tell us in the 2004 Barometer survey  Delivering business solutions is more complex than ever –software trends –project and business complexity trends

Challenges Will Continue 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 Crisis!

Information ‘Infrastructure’ Track Analyze Model Interact Adjust (Policy Hub) Transaction Processing Track Analyze Model Interact Adjust (Policy Hub) Content Management Collaboration Business rules Analytics Structured data, content Collaboration Analytics Content

Perspectives  IT Matters to business –what LOB managers tell us in the 2004 Barometer survey  Delivering business solutions is more complex than ever –software trends –project and business complexity trends  Building trust to facilitate influence –the Fedex case study

Fedex “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” “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 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.

Perspectives  IT Matters to business –what LOB managers tell us in the 2004 Barometer survey  Delivering business solutions is more complex than ever –software trends –project and business complexity trends  Building trust to facilitate influence –the Fedex case study  Organizational approach to facilitating influence

CIO 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 Goals IT OPERATIONAL EXCELLENCEIT-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 Source: IDC, #30216, CIO As a Key Influencer

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

Take 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

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