“What CEOs Want From CIOs” The CIO Executive Leadership Roundtable SIM Boston Chapter April 16, 2009 Mark Polansky Senior Client Partner & Managing Director Information Technology Officers Center of Expertise Korn/Ferry International

2 Korn/Ferry Human Capital Solutions Executive Search –Matrix of Industry/Sector & Functional Practices –IT Practice: CIOs, CTOs, CISOs, SVP/VPs Futurestep –Recruiting & Staffing Planning –Project/Pipeline Recruiting & Staffing –Recruitment Process Outsourcing Leadership and Talent Consulting –Organizational Development –Individual & Team Assessment –Competency-based Modeling –Executive Coaching & Development –Compensation Consulting

3 Evolution of the IT Leadership Role 1950s – Tab Supervisor –Accounting automation –Electro-mechanical equipment, early computers –Reports to Accounting Manager

4 Evolution of the IT Leadership Role 1950s – Tab Supervisor 1960s – Data Processing Manager –Proprietary systems - accounting, payroll, sales –Batch mainframe computers –Reports to Accounting Manager or Controller

5 Evolution of the IT Leadership Role 1950s – Tab Supervisor 1960s – Data Processing Manager 1970s – MIS Director –A full array of business applications systems –Online and database systems, minicomputers –Reports to Controller or Chief Financial Officer

6 Evolution of the IT Leadership Role 1950s – Tab Supervisor 1960s – Data Processing Manager 1970s – MIS Director 1980s – Vice President of Information Systems –Alignment of IT with business functions –PCs and Local Area Networks, decentralization –Reports to Chief Financial Officer

7 Evolution of the IT Leadership Role 1950s – Tab Supervisor 1960s – Data Processing Manager 1970s – MIS Director 1980s – Vice President of Information Systems 1990s – SVP/EVP & Chief Information Officer –Enterprise integration, recentralization –Client/server, Internet, ERP systems –Reports to CEO/COO/President/GM - senior management team

8 Evolution of the IT Leadership Role 1950s – Tab Supervisor 1960s – Data Processing Manager 1970s – MIS Director 1980s – Vice President of Information Systems 1990s – SVP/EVP & Chief Information Officer 2000s – ????

9 The IT Leadership Role in the 21st Century : End of the Technology Bubble –Dot-com implosion –Deep corporate IT cost cutting –Focus on tactical operations post-Y2K/ERP : “The 21 st Century CIO” –Comprehensive definition of the “C-level” IT role –Strategic alignment and governance –Process & operational optimization/ERP –Business intelligence and customer intimacy –Value creation : Dealing with Global Recession –Cost management, modest budget & staff reduction –“21 st Century CIO Agenda” still a mandate

10 “The 21st Century CIO Leadership Agenda” Source: Korn/Ferry research 1.IT Strategy – Business strategy alignment, business case and projected return on investments, priorities versus resources 2.IT Governance – Portfolio management, IT investment funding and review process, performance measurement, project management (PMO), SDLC, processes, standards, procurement 3.IT Organization & Staffing – Centralized, decentralized, federal model, shared services; reporting relationships, FTEs, staff augmentation, on/near/off-shore, capability/maturity, training 4.Technology – Architecture; bleeding/leading edge or trailing; build or buy, suite or best-of-breed; infrastructure and networking insourced/outsourced, total cost of ownership (TCO), support 5.Technology Awareness – Board of Directors, senior and middle management, rank and file

11 “The 21st Century CIO Leadership Agenda” Source: Korn/Ferry research 6.Corporate Governance – Compliance, disaster recovery, business continuity, security, privacy, intellectual property protection 7.Business Intelligence – Data modeling & warehousing, metrics, analytics, forecasting & modeling 8.ERP – Business integration, value chain, process improvement & innovation, change management, quality programs 9.Customer Care – Customer relationship management (CRM), contact centers, customer portals, B2B collaborative computing (EDI, VMI, CPFR) 10.Internet – e-business strategy, portals, web-enabled applications, telecommunications [Web 2.0]

12 “The 21st Century CIO”ENABLER DRIVER SUPPORTER COST CUTTER Strategic “competitive” Tactical “operational” Reactive “following” Proactive “leading”

Present State of the IT Leadership Role – Dealing with Global Recession –Operating charter o Leadership o Cost Management o IT Governance & Risk Management o Change & Innovation –Success criteria o IT Effectiveness o Value Creation o Transparency & Measurement –Upward mobility to operations and general management

What CEOs Want From CIOs Leadership –Assertive leadership and responsible ownership –Enterprise/SBU-level business savvy and strategic skills –IT alignment, strategy, vision, inspiration and motivation –Communications, relationship & partnership skills –Global perspective and optimization o Global business processes, standards & support o Use of global resources – sourcing & production –Go beyond IT and the CIO’s comfort zone – Attract, develop & retain “best athletes” (The War for Talent) – Execution, execution, execution!  Create World Class IT/Business Functionality

What CEOs Want From CIOs Cost Management –Do more with existing resources o Organizational restructuring & right-sizing o Financial restructuring – the 80/20 paradigm – Cost reduction & operational optimization o IT standards and processes o Systems consolidation and integration o Alternative/optimum sourcing/outsourcing o IT operations: automation, virtualization, ITIL, COBIT o Vendor contracts: consolidation & renegotiation  Potential Funding for Low Risk/High Return Initiatives

What CEOs Want From CIOs Governance & Risk Management –IT standards, processes and controls –IT architecture for agility and growth/scalability –Quality programs - PMO, Six Sigma, CMM –Data security, privacy and retention –Systems and data protection - internal and external –Support for compliance and audit –Disaster Recovery and Business Continuity Planning  Protect the Enterprise and Position for Future Growth

What CEOs Want From CIOs Value Creation - Drive the top and bottom lines –Improve revenue, margins, market share –Business intelligence, analytics and insights –BPO - enhanced productivity and competitive advantage –Customer intimacy, loyalty, segment marketing, etc. –Communities, markets & social networking - Web 2.0 –Technological innovation –New products and services –New channels and markets –New business models  Change & Innovation

“The 21st Century CIO”ENABLER DRIVER SUPPORTER COST CUTTER Strategic “competitive” Tactical “operational” Reactive “following” Proactive “leading”

Change & Innovation = Business Transformation Change & Innovation = Business Transformation Proactive Strategic Products & Services Innovation Products & Services Maintenance IT Consolidation & Rationalization; Vendor Partnerships IT Maintenance; Outsourcing Reactive Strategic Proactive Tactical Reactive Tactical GAME CHANGER DRIVER ENABLER COST CUTTER SUPPORTER Business Transformation

Innovators & Game-Changers American Airlines – SABRE, AAdvantage Citibank – ATM Deployment FedEx – Parcel Tracking Toyota – Just-in-Time Manufacturing Dell – Zero Days Inventory Wal-Mart – Supply Chain, VMI, CPFR, RFID Proctor & Gamble – BI & Consumer Communities Amazon.com – Online Retailing eBay – Online Auctions Google – Search-based Advertising Facebook, YouTube, Twitter, LinkedIn – Social Networking You!