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Who's Calling the Shots? - The CIO's Role as a Key Business Influencer
Puni RajahVice President, Research
IDC Asia/[email protected]
The Evolving Role of CIOsThe 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)
Mea
sure
men
t S
op
his
tica
tio
n
(Kn
ow
ing
ho
w t
o t
rack
IT
val
ue)
Source: IDC CIO Advisory, October 2003
PerspectivesPerspectives
IT Matters to business– what LOB managers tell us in the 2004 Barometer survey
Projects Start from WithinProjects Start from Within
Source: IDC Relationship Influence Study, 2003
What Initiates an IT Need?
N = 195
0% 10% 20% 30% 40% 50% 60% 70%
Other
Sales call
Vendorads/promotions
Consultant/SIrecommendation
Internal processimprovement
Percentage of Respondents
Business BarometerBusiness 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 IncreasingBusiness Executives’Engagement Is Increasing
Source: IDC’s LOB Executive Survey, January 2004
Q: How do you see your involvement in IT decision-makingchanging in the next year?
Decreasing1.5%
Don’t know1.8%
Increasing25.6%
Staying the same71.1%
1 – not important
2.2%
314.3%
24.4%
5 – very important
55.3%
423.8%
Strategic Value of IT to the Business — ExecutionStrategic Value of IT to the Business — Execution
Q: How important are IT systems and applications to theexecution 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 ITBusiness Executives Want to “Play Offense” with IT
Source: IDC’s LOB Executive Survey, January 2004
Q: Considering your business strategy, should yourcompany use technology?
Less aggressively
2.2%
More aggressively
54.9%
Same as today42.9%
IT Is Now Integral to Business ManagementIT Is Now Integral to Business Management
1 – not important
3.6%
313.2%
24.8%
5 – very important
38.8%
439.6% 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.”
PerspectivesPerspectives
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 ContinueChallenges Will Continue
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
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 Complexity Crisis!Crisis!
Information ‘Infrastructure’ Information ‘Infrastructure’
Track
Analyze
Model
Interact
Adjust(PolicyHub)
TransactionProcessing
Track
Analyze
Model
Interact
Adjust(PolicyHub)
ContentManagement
Collaboration
Businessrules Analytics
Structured data,
content
Collaboration
AnalyticsContent
PerspectivesPerspectives
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” programFedex “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”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 PartnershipsFedex’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.
PerspectivesPerspectives
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 RoleCIO 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 GoalsTwo Discrete but Inter-dependent Goals
IT OPERATIONAL EXCELLENCE
IT-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 criticalA 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 awaysTake 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
