Who's Calling the Shots? - The CIO's Role as a Key Business Influencer

1. Puni Rajah Vice President, Research IDC Asia/Pacific prajah@idc.com Who's Calling the Shots? - The CIO's Role as a Key Business Influencer

2. Value Cycle Winners Strategic Value Trackers Measurement Sophistication (Knowing how to track IT value) Value Explorers Fiscal Traditionalists Business Value Definition (Knowinghow and where Business value is manifested from IT) The Evolving Role of CIOs Source: IDC CIO Advisory, October 2003

3. Perspectives • IT Matters to business • what LOB managers tell us in the 2004 Barometer survey

4. Projects Start from Within What Initiates an IT Need? N = 195 Source: IDC Relationship Influence Study, 2003

5. Business 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

6. Don’t know Decreasing 1.8% 1.5% Increasing 25.6% Staying the same 71.1% Business Executives’Engagement Is Increasing Q: How do you see your involvement in IT decision-makingchanging in the next year? Source: IDC’s LOB Executive Survey, January 2004

7. 1 – not 2 important 4.4% 2.2% 3 14.3% 4 5 – very 23.8% important 55.3% Strategic 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

8. Less aggressively 2.2% Same as today 42.9% More aggressively 54.9% Business Executives Want to “Play Offense” with IT Q: Considering your business strategy, should yourcompany use technology? Source: IDC’s LOB Executive Survey, January 2004

9. 1 – not 2 important 4.8% 3.6% 3 5 – very 13.2% important 38.8% 4 39.6% IT Is Now Integral to Business Management Q: When hiring a business manager, how important that he/she be “IT-savvy”? Source: IDC’s LOB Executive Survey, March 2004 “IT savvy” described as – “they know about how IT supports business operations, how your competitors use IT to support their business, etc.”

10. Perspectives • 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

11. System SW, languages, mfg. & acct’g applications Complexity Crisis! Self-describing content & apps., natural interfaces Integrated system mgt. & applications, automated tools Challenges Will Continue Log of WW Software Revenues Source: IDC, 2003

12. Track Track Structured data, content Transaction Processing Content Management Content Analytics Interact Analyze Interact Analyze Collaboration Adjust (Policy Hub) Business rules Analytics Adjust (Policy Hub) Model Model Collaboration Information ‘Infrastructure’

13. Perspectives • 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

14. Fedex “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.

15. 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.”

16. Fedex’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.

17. Perspectives • 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

18. CIO Role Strategic IT Ambassador Business Finance Technology Effective Budgeting Results Management Performance Management 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

19. Two 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

20. A 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

21. Take 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

22. Contact Info Please email me at prajah@idc.com