The Evolution Of Enterprise IT

1. The Evolution Of Enterprise IT Abbie Lundberg Editor in Chief, CIO

2. CIO Archetypes: Context Matters BUSINESS LEADER Straddling the business-technology divide, this archetype relies on communication and collaboration to get the job done. INNOVATION AGENT Strategist who drives business change–and leaves the details to others. OPERATIONAL EXPERT Rolls up their sleeves and meets the challenges of the business head on. TURNAROUND ARTIST Relishes the challenge of fixing broken IT situations.

3. The Business Leader DEFINITION: Business Leaders put a premium on understanding business processes; they describe communication, leadership and management skills as core competencies. Their priorities are aligning IT and business goals, using technology to improve business processes, and controlling costs. 61%spend significant time interacting with CXOs and business people – the most of any archetype 32%focus on budgeting and compliance 23% personally manage IT crises, fewer than any other archetype 56%consider the ability to lead and motivate staff a top personal skill 3%say innovation is a dominant part of their role, least of all archetypes NEAL GUERNSEY, CIO, Feld Entertainment

4. The Innovation Agent DEFINITION: Innovation Agents put the highest emphasis on strategic thinking and believe strongly in IT’s ability to drive new business initiatives. They are very likely to be members of the executive committee that reports to the CEO, and they are most often found in smaller and midsize companies. 87%believe that IT should proactively envision business opportunities 83%work for companies w/less than $1 billion in revenue 77%are members of the executive committee 70%say strategic thinking and planning is their most important personal skill 55%report to their CEO 53%have worked in sales or marketing JANET SHERLOCK, CIO, Calico Corners

5. The Operational Expert DEFINITION: Operational Experts place a huge emphasis on their project management and execution skills, and their IT department's primary mission during the past year was to cut costs. These CIOs thrive in enterprises where the pressure to deliver IT systems on time, under budget and with full user acceptance is high. 23%report to the CEO, the lowest of any archetype $135,000average salary makes them the lowest paid 46%spend time managing IT crises 64%share IT ROI accountability with the business– more than any other archetype 69%have budgets of less than $5 million CHRISTINE LEJA, CIO, Southwestern Illinois College

6. The Turnaround Artist DEFINITION: Turnaround Artists are hired guns and risk takers who see themselves first and foremost as agents of change. They've got deep experience in IT and have the ability to come into a chaotic situation, ascertain what the business needs most, recharge a beaten-down staff and start piling up the wins—quickly. JAY ROLLINS, CIO, Churchill Downs 3.9 years is the shortest tenure of all the archetypes $204,000is the biggest paycheck of any archetype 58%cite their ability to influence change in others as a top personal skill 58%are directly accountable for IT ROI $4.3 billion in average revenue makes their companies the biggest for any archetype

7. Archetypes by the Numbers Innovators Get the Budget IT Budget as a Percent of Revenue Overall Innovator Operational Turnaround Business Leader 7.4% 10.8% 5.7% 6.9% 6.2% Turnaround Artists Get the Cash CIO Salaries Overall Innovator Operational Turnaround Business Leader $185,200 $166,500 $134,900 $204,167 $184,600

8. A Seat at the Table MEMBER OF EXECUTIVE COMMITTEE REPORTING STRUCTURE CEO 41% COO 14% Yes 68% No 32% CFO 24% Corporate CIO 5% Other 15%

9. Who Talks to the Boss? Reporting Relationships Overall Innovator Operational Turnaround Business Leader CEO 41% 55% 23% 47% 46% COO 14% 11% 21% 18% 8% CFO 24% 28% 31% 21% 26% Corp. CIO 5% 0% 5% 3% 6% Other 15% 6% 21% 11% 14%

10. The Perils of Reporting to the CFO REPORTING STRUCTURE TIME SPENT ON... CIOs WHO REPORT TO CFOs HAVE ½ THE BUDGET OF CIOs WHO REPORT TO CEOs

11. The Perils of Reportingto the CFO CHANCE OF BEING PART OF THE EXECUTIVE COMMITTEE HURDLES When Reporting to the CFO When Reporting to the CEO When Reporting to the COO

12. Today’s Core Competencies

14. Stakeholder Alignment: Knowledge & Actions

15. CIO Role: Leadership Skills & Accountability

16. Communication:How & Who

17. Where the Gaps Are

18. Innovation Rules

19. IT Philosophy IT should proactively envision business possibilities and initiate with technology 64% IT should support and enable business initiatives 36%

20. Are CIOs Spending Time on The Right Things? THE DAILY GRIND Shmoozing, systems and staffing occupy CIOs’ time. But a lack of interaction with customers and partners (#12), given the priorities of the business, should be of concern.

21. Collaboration Is Key Source: IBM Global CEO study 2006

22. Innovation Is a Team Sport IT is leading innovation initiatives across the company 19% IT is co-leading innovation initiatives with business executive sponsors 68% IT is playing an implementation role only 13%

23. Key Personal Skills for CIO Success?

24. Primary Strength as a CIO

25. Egon Zehnder InternationalNine Core Competencies For Executive Management Egon Zehnder International

26. CIOs: Good (50-85th percentile) Egon Zehnder International (n = 25,000 execs across all functions)

27. CIOs: Good vs. Outstanding Egon Zehnder International (n = 25,000 execs across all functions)

28. “Good” CIOs vs. “Good” CEOs (50-85th percentile) Egon Zehnder International

29. “Good” CIOs vs. “Good” CFOs (50-85th percentile) Egon Zehnder International

30. CEO/CIO Outstanding (85th percentile) Egon Zehnder International (n = 25,000 execs across all functions)

31. Ambitions

32. Into the Future

33. The “Future-State CIO” Project Mission Statement • To clearly articulate the future role of the CIO at its highest value and most strategic potential and to advance both business and the community of CIOs toward this potential • Chaired by … • Louis Ehrlich, CIO and VP of Global Strategy, Chevron Corporation • Marc West, CIO and General Manager of Consumer Markets, H&R Block International

34. The “Future-State CIO” Project • Three Phases – • Describe – Articulate the skills required to function as a co-leader of the business • Measure* -- Create benchmarking tools to measure the skills of individual CIOs and businesses • Advance – Create development and outreach programs to help advance the CIO community and business towards full potential * Strategic partnership with Egon Zehnder International to adapt their Management Assessment Methodology to this project

35. The Future-State CIO Model 0 100 50 25 75 Expectation/Capability Gap 85th Percentile Allocation of CIO’s Time 1/4 1/2 1/4 “Business Readiness Index” “Executive Competency Index” 2 - Transformational Leader Alignment and Business Process Transformation 3 - Business Strategist Enterprise Strategy & Competitive Differentiation 1 - Functional Head Operational Excellence

36. Advancing the conversation into the Business Community (Page B5) "Half of my job is now product innovation and understanding market opportunities," says Mr. West, 47. In contrast, at his previous CIO job, 75% of his time was devoted to supporting tech systems, he says.

37. What a difference a day makes 0 100 50 25 75 Allocation of CIO’s Time Expectation Capability Expectation-Capability Gap Expectation-Capability Alignment 2 - Transformational Leader Alignment and Business Process Transformation 3 - Business Strategist Enterprise Strategy & Competitive Differentiation 1 - Functional Head Operational Excellence

38. Advancing the conversation into the Business Community "Last September, to reflect how his job had spilled beyond tech support, Chevron gave Mr. Ehrlich the additional title of vice president of strategy and services. He has now ratcheted back his supervision of tech systems to just 10% of his time, instead delegating those responsibilities to a subordinate."

39. Aligning the business to your capabilities 0 100 50 25 75 Allocation of CIO’s Time Capability Expectation 2 - Transformational Leader Alignment and Business Process Transformation 3 - Business Strategist Enterprise Strategy & Competitive Differentiation 1 - Functional Head Operational Excellence

40. Here’s the challenge: What does this mean for the profession? "The CIO title is misused, frankly," says Mr. Ehrlich. If all a CIO does is oversee tech systems, "they should be named a tech manager. A CIO should be enabling a business to grow."

41. Advice for CIOs: Get Out…! Of IT: Do a rotation in another part of the business. The Office: Go work with your customers, and encourage your team to do the same. Your Company: Collaborate with business partners and customers on new innovations. The Country: Do a tour of duty at one of your company’s international operations.

42. What This Means for You if You… …Work for a CIO • If you’re in a purely technical position, hone skills • If you’re a manager, you will become the bridge …Sell to CIOs • Know what kind of CIO you’re dealing with, and what their context is • Learn your customer’s business

43. Thank You lundberg@cio.com www.cio.com