2. Mark P. McDonald Ph.D. Group Vice President, Gartner Fellow Blog: http://blogs.gartner.com/mark_mcdonald / Reimagining IT: The 2011 CIO Agenda This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2011 Gartner, Inc. and/or its affiliates. All rights reserved.

3. About the 2011 Gartner Executive Programs CIO Survey 1 Annual survey since 2000—the largest of its kind In 2011, 2,014 enterprises responded, representing more than $160 billion in IT spend and covering all major industries and geographies Average enterprise has an IT budget of $79 million Survey conducted from September to December 2010 Survey focused on five hypotheses concerning: -IT's strategic relevance -Benefits realization -IT skill building -CIO personal influence/authority -Levels of digitization

4. In 2010, CIOs recognized that IT has to change as conditions move toward recovery 2

5. Creative Destruction the Means to Re-Imagining IT

6. Global Enterprise Effectiveness Scores

7. Global IT Effectiveness Questions

8. The value of being effective is undeniable. 6 Return on Assets Revenue Growth 0% LeadersChallengers Close Followers Late Followers Source: 2011 CIO Survey respondents, industry adjusted performance Other measures available include ROE, ROIC, ROA, Net Margin Mean +3.6 %* +0.4 % +0.7 % -0.1 % -2.2 % -0.1 % -12.5 % -0.2 % Average percentage difference from their industry mean. (i.e. if Energy had an average ROA of 7%, then Leaders in Energy have an average ROA of 10.6%)

9. Reimagining IT: Findings 7 CIOs have the opportunity to REIMAGINE IT to meet business needs for GROWTH, take advantage of CLOUD services and economics, and RAISE THE STRATEGIC RELEVANCE of IT CIOs will be asked to increase the DIGITIZATION of their organizations and drive greater INNOVATION on FLAT BUDGETS CIOs must engage in a new SUCCESS CYCLE that concentrates on changing BENEFITS REALIZATION and IT SKILL BUILDING CIOs who accept this challenge gain the BUSINESS INFLUENCE they have sought for years

10. Reimagining IT: The 2011 CIO Agenda discussion topics 8 CIOs must reimagine IT to support growth and competitive advantage Business leaders must consider what it means to be a digital enterprise CIOs should address value from the outside and people from the inside Business results are a CIO's greatest asset and their most potent liability Reimagining IT is the fulcrum of the CIO Agenda

11. 2011 Top 10 Business Strategies - Americas 9 2 Countries

12. 2014 Top 10 Business Strategies - Americas 10 2 Countries

13. 2011 Top 10 CIO Strategies – Americas 11

14. 2011 Top 10 CIO Technologies - Americas 12

15. America’s Cloud and SaaS adoption plans 13

16. Americas CIOS see their businesses pursuing general strategies. 14

17. Americas CIOs see their strategies as closely tied with the business. 15

18. The size and nature of the strategy gap is qualitative more than quantitative IT Linkage Strategic Relevance General Practice Business Strategies 69% Strongly Linked to Business Strategies 83% Unique or Differentiating 31%

19. Reimagining IT: The 2011 CIO Agenda discussion topics 17 CIOs must reimagine IT to support growth and competitive advantage Business leaders must consider what it means to be a digital enterprise CIOs should address value from the outside and people from the inside Business results are a CIO's greatest asset and their most potent liability Reimagining IT is the fulcrum of the CIO Agenda

20. Public and private sector organizations have relatively low levels of digitization 18

21. Increasing IT’s contribution to digitization. 19

22. Reimagining IT: The 2011 CIO Agenda discussion topics 20 CIOs must reimagine IT to support growth and competitive advantage Business leaders must consider what it means to be a digital enterprise CIOs should address value from the outside and people from the inside Business results are a CIO's greatest asset and their most potent liability Reimagining IT is the fulcrum of the CIO Agenda

23. CIOs are using internal benefits realization techniques that are simply not working 21

24. CIOs are "outsourcing" their skill gaps and issues, creating a vicious cycle for IT and IT professionals 22

25. Reimagining IT: The 2011 CIO Agenda discussion topics 23 CIOs must reimagine IT to support growth and competitive advantage Business leaders must consider what it means to be a digital enterprise CIOs should address value from the outside and people from the inside Business results are a CIO's greatest asset and their most potent liability Reimagining IT is the fulcrum of the CIO Agenda

26. CIOs see business results and knowledge as their primary sources of success and influence 24

27. Ability to view the business holistically, across functional unit and regional boundaries. Process orientation and comfort with organizational design Information analytics knowledge ability to help companies sort through and use information Expertise in investment allocation and using ROI to make decisions about future IT expenditures Significant in-sector experience Experience handling marketing challenges and opportunities presented by new channels Ability to serve as the CEO’s single point of contact for marketing, sales and e-commerce Crisis and reputation management skills The ability to promote transparency and manage customer and public communities Experience that matches the company’s current needs – M&A experience for accompany in growth mode, for instance, or strong background in controls for a company that has experienced restatements or earnings violation Somewhat reduced focus on accounting skills and increased focus on strategic thinking Skill at finding the link between accounting and new business models and strategy Understanding of risk and how to balance it with performance A stronger outward focus, particularly when it comes to investor relations (though CFO’s still need to be good overseers on an accounting front A global, as opposed to country-specific, approach to finance. Business acumen Ability to interact with the board Experience managing an internal legal function Strong external network Judgment needed to outsource legal work appropriate and cost- efficiently Knowledge of new environmental regulations and green considerations End-to-end understanding of the supply chain Cost-conscious exploration of outsourcing and internal solutions Ability to partner with the CIO to impose interactions with customers and suppliers; technical savvy Experience running a business unit, managing a P&L, and interacting with customers Ability to collaboration across all business units and global functions and with the support organization Commercial acumen Understanding of cultural difference and shifting demographics Change management skills, facility with cultural change initiatives The credibility needed to act as an internal adviser to the CEO and the board Ability to work with the board to manage succession Technology Savvy Expertise in building compensation and performance into governance structures Skill at marketing the CHRO position to the rest of the organization NEW REQUIREMENTS FOR THE CHIEF HUMAN RESOURCE OFFICER NEW REQUIREMENTS FOR THE CHIEF SUPPLY CHAIN MANAGEMENT OFFICER NEW REQUIREMENTS FOR GENERAL COUNSEL NEW REQUIREMENTS FOR THE CHIEF FINANCIAL OFFICER NEW REQUIREMENTS FOR THE CHIEF MARKETING OFFICER NEW REQUIREMENTS FOR THE CHIEF INFORMATION OFFICER Source: ‘The New Path to the C-Suite” by B. Groysberg, L, Kevin Kelly and B. MacDonald. Harvard Business Review March 2011 Page 61 - 68 The traits C-level execs need to build to be CEO.

28. Ability to view the business holistically, across functional unit and regional boundaries. Process orientation and comfort with organizational design Information analytics knowledge ability to help companies sort through and use information Expertise in investment allocation and using ROI to make decisions about future IT expenditures Significant in-sector experience Experience handling marketing challenges and opportunities presented by new channels Ability to serve as the CEO’s single point of contact for marketing, sales and e-commerce Crisis and reputation management skills The ability to promote transparency and manage customer and public communities Experience that matches the company’s current needs – M&A experience for accompany in growth mode, for instance, or strong background in controls for a company that has experienced restatements or earnings violation Somewhat reduced focus on accounting skills and increased focus on strategic thinking Skill at finding the link between accounting and new business models and strategy Understanding of risk and how to balance it with performance A stronger outward focus, particularly when it comes to investor relations (though CFO’s still need to be good overseers on an accounting front A global, as opposed to country-specific, approach to finance. Business acumen Ability to interact with the board Experience managing an internal legal function Strong external network Judgment needed to outsource legal work appropriate and cost- efficiently Knowledge of new environmental regulations and green considerations End-to-end understanding of the supply chain Cost-conscious exploration of outsourcing and internal solutions Ability to partner with the CIO to impose interactions with customers and suppliers; technical savvy Experience running a business unit, managing a P&L, and interacting with customers Ability to collaboration across all business units and global functions and with the support organization Commercial acumen Understanding of cultural difference and shifting demographics Change management skills, facility with cultural change initiatives The credibility needed to act as an internal adviser to the CEO and the board Ability to work with the board to manage succession Technology Savvy Expertise in building compensation and performance into governance structures Skill at marketing the CHRO position to the rest of the organization NEW REQUIREMENTS FOR THE CHIEF HUMAN RESOURCE OFFICER NEW REQUIREMENTS FOR THE CHIEF SUPPLY CHAIN MANAGEMENT OFFICER NEW REQUIREMENTS FOR GENERAL COUNSEL NEW REQUIREMENTS FOR THE CHIEF FINANCIAL OFFICER NEW REQUIREMENTS FOR THE CHIEF MARKETING OFFICER NEW REQUIREMENTS FOR THE CHIEF INFORMATION OFFICER Source: ‘The New Path to the C-Suite” by B. Groysberg, L, Kevin Kelly and B. MacDonald. Harvard Business Review March 2011 Page 61 - 68 Common qualities the CIO shares with the rest of the C-Suite

29. Ability to view the business holistically, across functional unit and regional boundaries. Process orientation and comfort with organizational design Information analytics knowledge ability to help companies sort through and use information Expertise in investment allocation and using ROI to make decisions about future IT expenditures Significant in-sector experience Experience handling marketing challenges and opportunities presented by new channels Ability to serve as the CEO’s single point of contact for marketing, sales and e-commerce Crisis and reputation management skills The ability to promote transparency and manage customer and public communities Experience that matches the company’s current needs – M&A experience for accompany in growth mode, for instance, or strong background in controls for a company that has experienced restatements or earnings violation Somewhat reduced focus on accounting skills and increased focus on strategic thinking Skill at finding the link between accounting and new business models and strategy Understanding of risk and how to balance it with performance A stronger outward focus, particularly when it comes to investor relations (though CFO’s still need to be good overseers on an accounting front A global, as opposed to country-specific, approach to finance. Business acumen Ability to interact with the board Experience managing an internal legal function Strong external network Judgment needed to outsource legal work appropriate and cost- efficiently Knowledge of new environmental regulations and green considerations End-to-end understanding of the supply chain Cost-conscious exploration of outsourcing and internal solutions Ability to partner with the CIO to impose interactions with customers and suppliers; technical savvy Experience running a business unit, managing a P&L, and interacting with customers Ability to collaboration across all business units and global functions and with the support organization Commercial acumen Understanding of cultural difference and shifting demographics Change management skills, facility with cultural change initiatives The credibility needed to act as an internal adviser to the CEO and the board Ability to work with the board to manage succession Technology Savvy Expertise in building compensation and performance into governance structures Skill at marketing the CHRO position to the rest of the organization NEW REQUIREMENTS FOR THE CHIEF HUMAN RESOURCE OFFICER NEW REQUIREMENTS FOR THE CHIEF SUPPLY CHAIN MANAGEMENT OFFICER NEW REQUIREMENTS FOR GENERAL COUNSEL NEW REQUIREMENTS FOR THE CHIEF FINANCIAL OFFICER NEW REQUIREMENTS FOR THE CHIEF MARKETING OFFICER NEW REQUIREMENTS FOR THE CHIEF INFORMATION OFFICER Source: ‘The New Path to the C-Suite” by B. Groysberg, L, Kevin Kelly and B. MacDonald. Harvard Business Review March 2011 Page 61 - 68 Explicit technology skills C-level execs need to build to be CEO

30. Understanding of risk and how to balance it with performance Ability to view the business holistically, across functional unit and regional boundaries. Process orientation and comfort with organizational design Information analytics knowledge ability to help companies sort through and use information Expertise in investment allocation and using ROI to make decisions about future IT expenditures Significant in-sector experience Experience handling marketing challenges and opportunities presented by new channels Ability to serve as the CEO’s single point of contact for marketing, sales and e-commerce Crisis and reputation management skills The ability to promote transparency and manage customer and public communities Experience that matches the company’s current needs – M&A experience for accompany in growth mode, for instance, or strong background in controls for a company that has experienced restatements or earnings violation Somewhat reduced focus on accounting skills and increased focus on strategic thinking Skill at finding the link between accounting and new business models and strategy A stronger outward focus, particularly when it comes to investor relations (though CFO’s still need to be good overseers on an accounting front A global, as opposed to country-specific, approach to finance. Business acumen Ability to interact with the board Experience managing an internal legal function Strong external network Judgment needed to outsource legal work appropriate and cost- efficiently Knowledge of new environmental regulations and green considerations End-to-end understanding of the supply chain Cost-conscious exploration of outsourcing and internal solutions Ability to partner with the CIO to impose interactions with customers and suppliers; technical savvy Experience running a business unit, managing a P&L, and interacting with customers Ability to collaboration across all business units and global functions and with the support organization Commercial acumen Understanding of cultural difference and shifting demographics Change management skills, facility with cultural change initiatives The credibility needed to act as an internal adviser to the CEO and the board Ability to work with the board to manage succession Technology Savvy Expertise in building compensation and performance into governance structures Skill at marketing the CHRO position to the rest of the organization NEW REQUIREMENTS FOR THE CHIEF HUMAN RESOURCE OFFICER NEW REQUIREMENTS FOR THE CHIEF SUPPLY CHAIN MANAGEMENT OFFICER NEW REQUIREMENTS FOR GENERAL COUNSEL NEW REQUIREMENTS FOR THE CHIEF FINANCIAL OFFICER NEW REQUIREMENTS FOR THE CHIEF MARKETING OFFICER NEW REQUIREMENTS FOR THE CHIEF INFORMATION OFFICER Source: ‘The New Path to the C-Suite” by B. Groysberg, L, Kevin Kelly and B. MacDonald. Harvard Business Review March 2011 Page 61 - 68 CFO CSCO CHRO CSCO CIO Related skills the CIO shares with the rest of the C-Suite

31. Reimagining IT: The 2011 CIO Agenda discussion topics 29 CIOs must reimagine IT to support growth and competitive advantage Business leaders must consider what it means to be a digital enterprise CIOs should address value from the outside and people from the inside Business results are a CIO's greatest asset and their most potent liability Reimagining IT is the fulcrum of the CIO Agenda

32. Re-imagining IT Requires a Different Focus to Create Different Value. 30

33. Reimaging IT requires creative destruction rather than accretive change. DestroyCreateArea Strategic Role Organization Personnel Skills Processes Metrics Infrastructure Allocating resources based on matching supply with demand and fully allocating your team. Concentrating resources into technical based silos when IT solutions run end-to- end in the enterprise. Assigning your stable labor pool to the stable parts of your operations and matching high pay with new projects Erecting barriers that seek to make the “organization safe for IT” that requires no productive resources. Point in time measures that justify the status quo and prove that you are doing your job and not wasting money. Applying an asset based view of your operations that locks the majority of your resources into supporting peak need. Explicit focus on your sources of competitive advantage in Products/Services, Customers & Innovation Position your resources to be as flexible as the diversity of your business demand and the desires of your people. Match commodity responsibilities with commodity resources. Invest resources that will pay returns beyond the project. Create frequent value moments by concentrating on shorting cycle time and improving productivity and throughput A services based operation that enables you to redirect ‘liberated” people, budget and capital to greater strategic impact. Manage performance the way the business does – based on results and improvement over time toward goals.

34. Reimagining the CIO and the IT success cycle Technical Leadership Business Leadership Deliver business results and growth Increase CIO success and influence Maximize time as a business leader Build and rebalance internal skills Raise benefits realization performance Maximize digital contribution Refocus IT toward the truly strategic Embrace new infrastructure delivery options

35. Mark P. McDonald Ph.D. Group Vice President, Gartner Fellow Blog: http://blogs.gartner.com/mark_mcdonald / Reimagining IT: The 2011 CIO Agenda This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2011 Gartner, Inc. and/or its affiliates. All rights reserved.