Robyn Bennett Vice President, Marketing Programs and Enablement IBM Global Technology Services

1. Robyn Bennett Vice President, Marketing Programs and Enablement IBM Global Technology Services

2. IBM C‐Suite Studies provide insight and context into the mindset of senior decision makers. Over 5,300 Face‐to‐Face Interviews Conducted Inaugural Global CIO Study 2009 Released September 2009 Global CFO Study 2010 Released March 2010 Global CEO Study 2010 Released May 2010

3. Geography Sector Organization Size Others Communications 2% 11% Distribution 24% Public 18% Industrial Financial 24% Services 21% In the largest known sample of face-to-face interviews, we spoke with CIOs to understand their goals and challenges • Between January and April 2009, IBM conducted 2,598 face-to-face interviews with CIOs • Represents different sizes of organizations in 78 countries and 19 industries • Analysis incorporates Profit before Tax (PBT) growth data, relative to peers in their industries, to associate CIO organizations with one of three growth levels: High, Medium or Low. • Context (Low-growth v. High-growth) reflects environment in which CIO operates 3

4. Our analysis provided insights into how CIOs can make the biggest impact on behalf of the entire organization • CIOs are much more actively engaged in: • Setting strategy • Enabling business flexibility and change • Solving business problems, not just IT problems • CIOs spend an impressive 55% of their time on activities that spur innovation: • Generating buy-in for innovative plans • Implementing new technologies • Managing non-technological issues • However, CIOs universally acknowledge that some of their most important objectives sometimes seem to clash • How can we support the introduction of new services while avoiding the disruption of existing services? • How can I reduce costs while improving services? • How will I balance the need to influence business strategy with the need to provide top-notch IT support?

5. Expanding business impact Making Innovation real Raising the ROI of IT Successful CIOs blend three pairs of roles that seem contradictory, but are actually complementary Insightful Visionary Savvy Value Creator Collaborative Business Leader Able Pragmatist Relentless Cost Cutter Inspiring IT Manager

6. Making innovation real Insightful Visionaryand Able Pragmatist “Innovation should be based on practical technology that can deliver business objectives within reasonable time and cost, which can be absorbed by the business.” Life insurance CIO, India

7. +40% +35% As Insightful Visionaries, CIOs are active members of the strategic team Visionary CIOs recognize that successful innovation requires deep involvement with the business “For us, innovation means generating diverse ideas to address a particular need. Then we distill them into an actionable plan that results in business improvement.” Energy and Utilities CIO, United States +94% High-growth CIOs reach out much more to the business to co-create and champion innovation… ... and are more often members of the most senior management team ”The CEO’s message to the board is that IT is necessary to be better as a company.” Insurance CIO, Mexico Source: IBM Global CIO Study 2009; n = 2598 Low growth High growth

8. Innovation is not limited to IT solutions: Business-oriented plans rank high among CIOs’ visions of enhancing competitiveness Ten most important visionary plan elementsInterviewed CIOs could select as many as they wanted Source: IBM Global CIO Study 2009; n = 2345 Low growth High growth

9. As Able Pragmatists, CIOs make it possible to bring innovative plans to life while "keeping the engines humming" +60% +86% 41% +22% 22% Entire Organization High-growth CIOs are expected to spend more time to enable the business and corporate vision Business and corporate vision enabler Core Technology services provider 28% 28% -42% +87% 15% High-growth CIOs actively use collaboration and partnering technologies… … and use third party business or IT services more often to improve their business agility “Like many other companies, we are always exploring the possibility of utilizing external entities to help manage the day-to-day IT operations so that, internally, we can focus on more strategic initiatives.” Kurt Rao, Time Warner Inc. IT Organization Source: IBM Global CIO Study 2009; n = 2598 Low growth High growth 9

10. Client Perspective: John Clarke, Senior VP & CIO, Nokia“Providing Insight to the Business"

11. Raising theROI of IT Savvy Value Creatorand Relentless Cost Cutter “We do recognize the strategic advantage of using data to support improved decision making … this is a key plank of our strategy going forward.”Consumer Products CIO, Ireland

12. Low growth High growth As Savvy Value Creators, CIOs are skilled customer advocates that create value by truly understanding what customers want High-growth CIOs proactively craft data into actionable information “Having a strong data governance model that allows for a single view of the truth through accurate data is a strategic imperative.” Financial markets CIO, United States +61% In five years, CIOs expect end-customers to continuously explore new channels... ... and anticipate much greater levels of integration and transparency with customers +37% +55% 44% 54% 74% 68% Source: IBM Global CIO Study 2009; n = 2598

13. As Relentless Cost Cutters, CIOs are perpetual seekers of savings who reduce costs through infrastructure and process standardization Across our entire sample, CIOs spend about 14% of their time to take costs out of the ongoing technology environment “The balance between new projects and cost control is the dichotomy of my life.” Retail CIO, United States • Of the 60 or so hours per week, some 9 hours are spent cutting costs Many CIOs foresee a strongly centralized infrastructure in five years... ... and think business processes will be completely standardized and low cost +22% “Expectations have changed. It is about delivering a service through a simple process that can be repeated.”CIO, United Kingdom Source: IBM Global CIO Study 2009; n = 2598 Low growth High growth

14. Client Perspective: Donagh Herlihy, Senior VP & CIO, Avon“Using information to Solve Business Problems "

15. Expandingbusinessimpact Collaborative Business Leader andInspiring IT Manager “IT is now seen as a key enabler to business goals and mission, and is engaged in delivering business strategy. Managing with defined goals and intent makes it easier for IT to align to business needs.” Chris Ferguson, CIO, Elders Rural Services

16. As Collaborative Business Leaders, CIOs are true partners with other executives, jointly defining better business models CIOs in high growth organizations more often receive high marks from their senior management team High or very high score by the entire senior management team for technology’s contribution to the business +47% High-growth CIOs are more closely involved in co-creating the business strategy with their fellow business leaders Create business strategy as member of the team +21% Present business strategy jointly with others on the senior management team 66% +25% 53% Decide on business strategy as a member of the most senior management team +35% Source: IBM Global CIO Study 2009; n = 2598 Low growth High growth

17. +69% As Inspiring IT Managers, CIOs are consummate IT experts who foster IT expertise to extract and preserve critical business data High-growth CIOs create IT centers of excellence to help realize business and technology innovation “We have centers of excellence for ERP and business applications, collaboration and security - some are more formal than others." Government CIO High-growth CIOs do more to improve users’ access to data, as well as its quality Data is readily available for relevant users Data is reliable and secure 67% +23% +31% 51% Low growth High growth Source: IBM Global CIO Study 2009; n = 2598

18. Client Perspective: Tom Greene, CIO, Colgate-Palmolive“Providing Information in Time to Make a Difference"

19. Tuning tocontext A CIO’s Reality

20. The most effective CIOs consider the full range of possible influences when evaluating how each pair of roles should be prioritized • Stay abreast of market forces • Pay attention to geographical and regional particulars • Know the availability of industry-specific skills • Understand how customer expectations are changing • Know where competitive threats exist • Understand how customer relationships are evolving • Understand the organization structure and culture • Evaluate the overall business and IT situation • Request input from end users and IT colleagues to identify areas of strength, as well as improvement opportunities Macroeconomic factors Regional conditions Industry characteristics Organizational influences Personal aspirations

21. Despite multiple forces in play, our findings show that CIOs are focusing on what matters most for them and their organizations • CIOs acknowledged the constant tension of integrating actions that sometimes seem oppositional • Over time, we expect CIOs to regularly assess how much emphasis is appropriate on each of the three pairs of roles in order to make innovation real, raise the ROI of IT and expand business impact Continue the conversation at ibm.com/voiceofthecio

22. Questions

23. For more information related to the IBM Global CIO Study, visit ibm.com/voiceofthecio Read industry and regional CIO perspectives on the IBM Global CIO Study's insights Watch respected CIOs from around the global share their lessons learned as they relate to the study results Take the CIO Study questionnaire yourself and see how your results compare to those of the IBM Global CIO Study For other details on CIO strategies and insights, visit ibm.com/cio Additional information

24. 2009 Study CSCOStudies Total Interviews: 393 Face-to-Face: 367 2009 Study CIOStudies Total Interviews: 2598 Face-to-Face: 2598 IBM Institute for Business Value The IBM Global CIO study is part of our C-Suite series 2008 Study 2010 Study 2004 Study 2006 Study CEOStudies Total Interviews: 1130 Face-to-Face: 1100 Total Interviews: 1564 Face-to-Face: 1564 Total Interviews: 456 Total Interviews: 765 Face-to-Face: 506 2010 Study 2008 Study 2005 Study 2003 Study CFOStudies Total Interviews: 1917 Face-to-Face: 1485 Total Interviews: 1230 Face-to-Face: 619 Total Interviews: 889 Face-to-Face: 267 Total Interviews: 450 Face-to-Face: 450 2005 Study 2007 Study CHROStudies Total Interviews: 320 Face-to-Face: 320 Total Interviews: 404 Face-to-Face: 337

25. How do the priorities of the CEO, CFO and CIO align to address uncertainty and complexity?