What is the CIO’s Role?

3. What is the CIO’s Role? Gartner Group’s definition of the role of the CIO To “provide technology vision and leadership for developing and implementing IT initiatives that create and maintain leadership for the enterprise in a constantly changing and intensely competitive marketplace.” Source: Grupe, Fritz H., Simon Joost, and Nilesh Patel, “Passing the Baton: Helping Your Successor to Succeed.” Information Systems Management, Spring 2003, p. 19.

4. What is the CIO’s Role? As IT leaders, CIOs • Devise and manage organizational arrangements to meet business needs • Set goals and direction • Influence perception of IT’s role and business value in an organization • Establish relationship between business and IT at the executive level, help achieve “shared vision” Source: Lacity, Mary C and Leslie P. Wilcocks, Global Information Technology Outsourcing: In Search for Business Advantage, John Wiley & Sons, Chichester, 2001, pp 252-253.

5. Evolution of the CIO 1960s • Director of Data Processing • Technical • Automating back-office functions • Little to no power, basement office (desk) 1970s • Management Information Systems (MIS) Director • Minicomputers appearing in more departments, network mainframes • MIS Director starting to gain some power 1980s • Chief Information Officer • Proliferation of the PC, “Control the chaos” • Companies saw the benefits of computer technology • CIO starting to be viewed as a valuable, high-level executive Source: Melymuka, Kathleen, “35 Years of IT Leadership: The Evoluton of the IT Leader.” Computerworld, Sep 30, 2002. Vol. 36, Iss. 40;  pg. 28.

6. Evolution of the CIO 1990s to today • Client/server applications instead of mainframe, costs begin to rise • CIO’s role as planner, architect, and budget manager reinforced • Focus on “strategic plans, strategic architecture, networking, competitors and partners” Source: Melymuka, Kathleen, “35 Years of IT Leadership: The Evoluton of the IT Leader.” Computerworld, Sep 30, 2002. Vol. 36, Iss. 40;  pg. 28.

7. Common CIO Titles • In the CIO survey, 73% of respondents had Chief-level titles, 35% had solely CIO titles. Source: Cosgrove Ware, Lorraine, “What You Have to Say – Survey Results.” CIO Magazine, Apr 1, 2003, www.cio.com/archive/040103/results.html, viewed October 1, 2003.

8. To Whom Do CIOs Report? • In the CIO survey, 47% of respondents report directly to the CEO Source: Cosgrove Ware, Lorraine, “What You Have to Say – Survey Results.” CIO Magazine, Apr 1, 2003, www.cio.com/archive/040103/results.html, viewed October 1, 2003.

9. How Do CIOs Spend Their Days? • Time allocation per day Source: Cosgrove Ware, Lorraine, “What You Have to Say – Survey Results.” CIO Magazine, Apr 1, 2003, www.cio.com/archive/040103/results.html, viewed October 1, 2003.

10. Budgets and Staff • 2002 survey of IT leaders, 388 respondents Source: “Here’s Looking at You: Demographics of the 2002 ‘State of the CIO’ Survey,” CIO Magazine, Mar 1, 2002, www.cio.com/archive/030102/demographics.html, viewed October 20, 2003.

11. Average users: Average IT staff: Average % of users: 5,348 78 1.5% Budgets and Staff • 2002 survey of IT leaders, 469 respondents Source: “Here’s Looking at You: Demographics of the 2002 ‘State of the CIO’ Survey,” CIO Magazine, Mar 1, 2002, www.cio.com/archive/030103/demographics.html, viewed October 20, 2003.

12. Top Priorities of Today’s CIOs • According to recent Gartner survey of 620 CIOs and IT executives, the top priorities of today’s CIOs are: Source: Hoffman, Thomas, “Gartner survey finds continued CIO focus on cutting costs,” Computerworld, Mar 17, 2003, p. 13.

13. CIO Gender Statistics 1 2 N: 500 N: 539 Sources: 1. “The 2002 State of the CIO. ‘Here’s Looking at You’.” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/030102/demographics.html > 2. Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html >

14. IT Gender Gap Widens Overall IT Gender Gap Widening Again Of all IT executives over age 40, female executives account for 16.4%. Only 7.8% of IT leaders under age 40 are female. • Factors Attributing to Decrease in Female IT Leaders • Economic downturn. • Fewer young women choosing IT careers - 41% in 1996, 34.9% in 2002. • Significant numbers of women exiting corporations to start own businesses. Now account for nearly 50% of privately owned US businesses. Source: D’Agostino, Debra. “Where are All the Women IT Leaders?” CIO Insight. October 1, 2003. Website as view on October 26, 2003. < http://www.cioinsight.com/article2/0,3959,1309515,00.asp >

15. Professional Experience N: 539 Source: Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html >

16. Position Held before CIO Source: “The Role of the CIO.” CIOInsight.com. February, 2003. As viewed on October 30, 2003 <http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >

17. Tenure as CIO • Average time as CIO: 4 years, 9 months Source: Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html >

18. CIO Compensation 1 2 • Average CIO Total • Compensation: • $167,242 N: 279 N: 539 Economy Hits IT Compensation 3 InformationWeek found that the economic downturn reduced compensation for IT managers by 8% and by 11% for IT staff in 2002. Sources: • Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html > • “The Role of the CIO.” CIOInsight.com. February, 2003. 1. As viewed on October 30, 2003. < http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf > • George, Tischelle, Eileen Colkin, and Larry Greenemeier. “Big Bucks Dry Up.” InformationWeek.com. April 29, 2002. <http://www.informationweek.com/story/showArticle.jhtml?articleID=6501877>

19. CIO Skills & Personality Technical Skills vs. People Skills • In their study, Enns, Huff, and Golden challenge the conventional wisdom of organizational socialization theory that predicts significant differences in the influencing behaviors used by less technical and more technical CIOs.1 • By narrow margins, Enns found the following behavioral patterns: • Lesser technical CIOs use “hard” influencing behaviors: coalition, legitimization, pressure (Greater technical CIOs use the hard behavior: exchange.) • Greater technical CIOs use “soft” influencing behaviors: consultation, inspirational appeal, personal appeal (Lesser technical CIOs use the soft behavior: ingratiation.) 60% of CIOs at large companies are EXTROVERTS!2 WHY? Enns offers possible reason: “…top executives may not rise to the top without having the ability to utilize influence behaviors.” • Sources: • 1. Enns, Harvey G., Sid L. Huff, and Brian R. Golden. How CIOs Obtain Peer Commitment to Strategic IS Proposals: Barriers & Facilitators. • (2000): 6-7. < http://www.sba.udayton.edu/cio_influence/CIO Tech Back IBs-2.pdf > 2. “The Role of the CIO.” CIOInsight.com. February, 2003. 2. As viewed on October 30, 2003. < http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >

20. CIOs Take the Personality Test Extrovert/Introvert Sensing/Intuition Judging/Perceiving Thinking/Feeling Source: “The Role of the CIO.” CIOInsight.com. February, 2003. 2. As viewed on October 30, 2003. < http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >

21. Factors in Attaining Peer Commitment Enns, Huff, and Golden’s study on how CIOs attain peer commitment for IT projects revealed key factors that CIOs must manage: • Environment: • Industry - information reliant (e.g. Finance) vs. material product based (e.g. Petroleum) • Vision for IT - IT as Cost Center vs. IT as Transformer • Centralization - centralized vs. decentralized • Consistency of Proposals with business strategy • Peer relationships - effective relationships • Educate peers about strategic value of IT (consultation behavior) • Build relationships, partnerships, and networks 1 Financial services CIO: “. . . IT was considered a cost center. However, due to my relationships with others in the organization, and my track record of delivering on projects, IT is now considered an Investment Center.” Source: Enns, Harvey G., Sid L. Huff, and Brian R. Golden. How CIOs Obtain Peer Commitment to Strategic IS Proposals: Barriers & Facilitators. (2000): 6-7. < http://www.sba.udayton.edu/cio_influence/Barriers and Facilitators.pdf >

22. Factors in Attaining Peer Commitment • Peer Background Accommodation • Speakingthe peer’s language - non-technical vs. technical • Consultation(seeking peers participation)- peers with tech background: resistance; peers with lesser tech background: commitment. • Reason - technical peers view consultation as sign that CIO is unprepared. • Ingratiation- peers with tech background: resistance; peers with lesser tech background: commitment. • Reason - technical peers seek the rationale and content of proposals. Other behavior is viewed as superfluous and irritating. • Implementation: Keys for Success • Top-Down support - managers at top tier support project and ensure their subordinates actively support the project. • Stakeholder support - critical that project has support of stakeholders. CIO’s peer: “The CIO is driven into seclusion if (his/her) focus is just the technology. You are at risk because a technology focus is not where the business units reside.” Source: Enns, Harvey G., Sid L. Huff, and Brian R. Golden. How CIOs Obtain Peer Commitment to Strategic IS Proposals: Barriers & Facilitators. (2000): 6-7. < http://www.sba.udayton.edu/cio_influence/Barriers and Facilitators.pdf >

23. CIOs Rank Skills for Success N:385 Source: “The Role of the CIO.” CIOInsight.com. February, 2003. 3. As viewed on October 30, 2003. < http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >

24. How are CIOs Evaluated N:385 Source: “The Role of the CIO.” CIOInsight.com. February, 2003. 2. As viewed on October 30, 2003. < http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >

25. Gartner Divines Future of CIO • Business refocuses on profits and returns to core competencies • IT departments are challenged to “define and deliver a sustainable value proposition” “The CIO is facing a real prospect of becoming a ‘zero-budget CIO’ by the end of the decade.” - John Mahoney, Gartner Group • Value in “leadership and service integration,” not in creation of technology • Gartner’s “CIO Success Cycle” • Lead: CIOs must use their access to the organization to network with key personnel and gain influence and leadership as the IT solution provider. • Shape Demand: CIOs must come to understand their company’s business in order to provide effective input on technology demands. • Set Expectations: CIOs must lead executives to realistic expectations for projects, and offer realistic alternatives when necessary. • Deliver: CIOs must form internal and external partnerships that enable them to meet the demands of business changes. Source: Anonymous, “Gartner Predicts ‘Zero-Budget’ CIO.” Information Management Journal. July/August, 2002: 8.

26. Case Study St. John’s Mercy Health Care CIO Dewey Freeman Corporate Background • Sisters of Mercy founded nearly 200 years ago by Catherine McAuley. Sisters of Mercy religious communities around the world. • Sisters of Mercy Health System (SMHS), founded in 1986, consists of facilities in seven states with 27,800 co-workers and 4,000 physicians. Also includes health, dental and vision insurance plans and is organizing its own Group Purchasing Organization • SJMHC is a regional Strategic Service Unit (SSU) of SMHS • SJMHC includes St. John’s Mercy Medical Center (St. Louis), St. John’s Mercy Hospital (Washington), Mercy Medical Group, Unity Health Services • SJMHC includes 8,037 co-workers, 1,293 physicians • Provides healthcare to St. Louis community and missions to other countries Catherine McAuley Source: Information courtesy SJMH community relations department

27. Case Study St. John’s Mercy Health Care CIO Dewey Freeman SJMHC Organization President/CEO SJMHC Michael Morgan Chief Operating Officer SJMHC Mark Stauder Vice President SJMHC Sr. Barbara Grant, RSM President MMG Tom Hale, M.D. EVP/CFO SJMHC Randy Combs President SJMH Michael Zilm President UHS Wayne Diewald CIO SJMHC Dewey Freeman Senior Vice President MMG John Hermann Chief Nurse Executive SJMMC Chris Crain, R.N. Vice President SJMMC Patrick Christiansen, Ph.D. Chief Contracting Officer SJMHC Curtis Thompson VP Medical Affairs SJMHC Paul Hintze, M.D. Vice President SJMHC Denny Holter Vice President SJMHC Ron Trulove Vice President SJMMC Wayne Diewald Vice President SJMHC Robert Ruello Vice President SJMHC Sheri Beekman Source: Information courtesy SJMH community relations department

28. Case Study St. John’s Mercy Health Care CIO Dewey Freeman SJMHC Organization IT and SJMHC • IT department employs 131 co-workers, 1.63% of the SJMHC workforce • FY ’04 operating budget of $7.1M, 1.1% of total FY ’03 SJMHC operating revenue • SMHS ranked by Information Week as one of top 500 most wired companies, ranking 13th among organizations in healthcare, 213th overall • SMHS named as one of nation’s most wired health systems by Hospitals & Health Networks magazine, a publication of the American Hospital Association President/CEO SJMHC Michael Morgan Chief Operating Officer SJMHC Mark Stauder Vice President SJMHC Sr. Barbara Grant, RSM President MMG Tom Hale, M.D. EVP/CFO SJMHC Randy Combs President SJMH Michael Zilm President UHS Wayne Diewald CIO SJMHC Dewey Freeman Senior Vice President MMG John Hermann Chief Nurse Executive SJMMC Chris Crain, R.N. Vice President SJMMC Patrick Christiansen, Ph.D. Chief Contracting Officer SJMHC Curtis Thompson Dewey Freeman VP Medical Affairs SJMHC Paul Hintze, M.D. Vice President SJMHC Denny Holter Vice President SJMHC Ron Trulove Vice President SJMMC Wayne Diewald Vice President SJMHC Robert Ruello Vice President SJMHC Sheri Beekman Source: Information courtesy SJMH community relations department and SJMHC finance and IT departments

29. Case Study St. John’s Mercy Health Care CIO Dewey Freeman IT and SJMHC • IT department employs 131 co-workers, 1.63% of the SJMHC workforce • FY ’04 operating budget of $7.1M, 1.1% of total FY ’03 SJMHC operating revenue • SMHS ranked by Information Week as one of top 500 most wired companies, ranking 13th among organizations in healthcare, 213th overall • SMHS named as one of nation’s most wired health systems by Hospitals & Health Networks magazine, a publication of the American Hospital Association Dewey Freeman Source: Information courtesy SJMH community relations department and SJMHC finance and IT departments

30. Case Study St. John’s Mercy Health Care CIO Dewey Freeman Background • Dewey Freeman, CIO of SMHS and SJMHC for one year • 16 years of CIO experience: • 12 years CIO at Baptist Health, Little Rock, Ark. • 3 years at Fairfield Resorts • 1 year in current position • Previously industrial engineer at Baptist Health • Degree in Industrial Engineering and MBA Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

31. Case Study St. John’s Mercy Health Care CIO Dewey Freeman How does Dewey spend his day? • Arrive at work around 7:00 a.m • Ninety percent of day consists of communication  • Day of interview, he was talking on his cell-phone all the way in from the airport • Meetings • Conference Calls • Participating in planning for future projects • Status reports • Small part of day may be to deal with any arising crises • Work with vendor(s) to make sure process works • Sometimes vendor motivations are different than the organization’s • Leave work around 6 p.m. or so. Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

32. Case Study St. John’s Mercy Health Care CIO Dewey Freeman To whom does Dewey report? Relationship with CEO • In SJMHC role, reports to Chief Financial Officer, Randy Coombs • Communicates daily with Randy • In SMHS role, reports to Sisters, though budget belongs to SJMHC • Different sets of issues between SJMHC and SMHS • Has a good relationship with CEO, Mike Morgan • Doesn’t communicate daily • Plays golf with Mike Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

33. Case Study St. John’s Mercy Health Care CIO Dewey Freeman Biggest challenges • “The biggest challenge is trying to align the IS organization with the business goals of the organization” • Current SMHS/SJMHC strategy based around patient safety • Barcodes to enter info instead of manual computer entry • Computer Physician Order Entry (CPOE)  wireless technology • BRIDGE pharmacy project  Drug and patient barcoding to prevent drug errors • Not only IS goal, but end-user goal • Achieving end-user buy-in • Making people understand IT is a tool to achieve organizational objectives • Shorter life cycles  By the time you research, buy, test and so on, the needs have already changed Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

34. Case Study St. John’s Mercy Health Care CIO Dewey Freeman What keeps Dewey up at night? • After so many years and what he’s seen, not much keeps him up at night. • Having reliable systems, especially in healthcare setting Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

35. Case Study St. John’s Mercy Health Care CIO Dewey Freeman Most successful project under Dewey’s leadership • Baptist Health, 1996-99 • Implementation of Clinical Information Systems • Computer order entry, alerts • Documentation system • Digital documents printed to an image • Information flowed to different forms • Learned how to build a team • Learned the importance of having buy-in from the end-user and that you need a champion on the user’s end • “IS is uniquely qualified for project management, but we’re not clinical. We need input from the end-user. Only the end-user can decide what’s needed.” • “Without the end-user, IS is like a hammer sitting on the table: We’re just a tool waiting to be used.” Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

36. Case Study St. John’s Mercy Health Care CIO Dewey Freeman Most troublesome project under Dewey’s leadership #1 • Large, unnamed Baptist Health hospital • Tried to implement a materials control package for the surgery department • Good concept driven by IS and Materials Management, but Surgery didn’t take ownership, showed passive interest, no buy-in • Idea was to barcode each supply item to track item usage • Problems were • Labor to break open packages and barcode • Once package was opened, items couldn’t be returned to vendor. In the OR setting, items are frequently returned. • $500,000 project never implemented • No input from the end-user on practicality of system Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

37. Case Study St. John’s Mercy Health Care CIO Dewey Freeman Most troublesome project under Dewey’s leadership #2 • Another Baptist Health hospital • Tried to implement a computerized tray line system, similar to McDonald’s, in the Dietary department • Idea was to enable staff to complete a patient meal tray every six seconds instead of five or fewer trays a minute • System crashed at high speed, reliable at five to six trays per minute • Frustrating to staff and patients • Went back to manual process • $100,000 project Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

38. Case Study St. John’s Mercy Health Care CIO Dewey Freeman Dewey on the role of IT in healthcare “IT enables processes that bring value to organizations by either improving patient safety, improve the ability to communicate about a patient, to help efficiently run the business, and to improve the productivity of the workforce.” Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

39. Case Study St. John’s Mercy Health Care CIO Dewey Freeman Dewey on the role of IT in healthcare • IT is both commodity and strategic • Strategic in what it’s used for to provide a competitive advantage • Commodity in the tools to accomplish strategic initiatives Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

40. Case Study St. John’s Mercy Health Care CIO Dewey Freeman Dewey on the role of IT in healthcare • Tools vs. Toys • Having a well-defined strategy will help decide what’s a toy and what’s a tool • Maturity of technology and the ability of technology to help organization meet its goals vs. latest fad • Pay a little extra if early adopter; Dewey prefers to be a little off the “bleeding edge” • Too important for it to work than to have the latest gadgets • “If you’re out on the edge, you get gray hairs; if you’re over the edge, you go bald.” Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

41. Case Study St. John’s Mercy Health Care CIO Dewey Freeman Dewey on the role of IT in healthcare • Healthcare in general lags behind other industries due to the resources applied to it • Three percent of total expenses invested in IS (SJMHC is 1%), while other industries invest at least 10-12% • Healthcare fairly regulated, and technology dollars tend to center around treatment (new medical equipment) Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

42. Case Study St. John’s Mercy Health Care CIO Dewey Freeman Dewey on the role of the CIO in an organization “The CIO should be looked at as a person who can communicate with leaders of an organization about his vision. A CIO must be a spokesperson for use of systems to accomplish business objective, be a spokesperson for innovation, taking IT from its current level to a new one. The CIO must be a visionary leader.” Dewey Freeman Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

43. Case Study Graybar CIO - Beatty D’Alessandro Company History • 1869 - founded by inventor Elisha Gray and entrepreneur Enos Barton as Gray & Barton. • 1872 - became Western Electric Co., supplying telegraph components to Western Union Telegraph. • Upon invention of telephone, became exclusive manufacturer of telephone equipment for Bell System. • 1925 - spun of electrical distribution business which became Graybar Electric Company, Inc.. • 1929 - employees bought Graybar. • 1982 - Graybar’s Corporate headquarters moved to St. Louis from its home in the Graybar Building above New York City’s Grand Central Terminal. • 2003 - Graybar Electric Company rebrands itself as Graybar to deemphasize the electrical aspect of its business and refocus public view on its supply-chain management capabilities. Source: “Company History.” Graybar Electric. 2003. 5 Nov. 2003 http://www.graybar.com/aboutus/gbhistory.html.

44. Case Study Graybar CIO - Beatty D’Alessandro Corporate Information • 2003 projected revenues: $3.8B • Distribution facilities: 280 • Employees: 7500+ • Employee owned: >50% of stock in hands of retirees • Primary customers: electrical and voice/data contractors, commercial and industrial firms, tel-coms, power utilities, and government entities. • Distributes for 4200+ manufacturers of electrical, comm/data, and networking products Source: “Company Profile.” Graybar Electric. 2003. 5 Nov. 2003 http://www.graybar.com/aboutus/default.html.

45. Case Study Graybar CIO - Beatty D’Alessandro Rankings and Recognition • #1 on Electrical Wholesaling’s 250 largest electrical distributors (2002) • #3 on Business Week’slist of private U.S. info-tech companies (2002) • #21 on Forbes’ ranking of to 25 private U.S. Companies (2002) • #344 on 2003 Fortune 500 ranking of largest US companies (2003) Source: “Company Profile.” Graybar Electric. 2003. 5 Nov. 2003 http://www.graybar.com/aboutus/default.html.

46. Case Study Graybar CIO - Beatty D’Alessandro History of Graybar IT • 1970s - Graybar computerizes its sales system. • Mid-late 1980s - Graybar builds homegrown system encompassing: Order Entry, Purchasing, Payables, and Receivables. No integration with accounting. • Late 1980s - Accounting moved their manual system to PCs. • 1998 - Accounting implemented mid-tier accounting system, Clarus. • 2000 - Legacy system is reaching maximum capacity. Graybar begins search for replacement. Determines to pursue ERP. Contenders: JD Edwards, Oracle, and SAP • 2001 - Graybar holds Proof-of-Concept for SAP. Will be largest wholesale distributor to implement this software primarily designed for manufacturing. • 2003 - SAP go-live. Sales and Logistics systems roll out. Finance & HR go “big-bang.” Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

47. Case Study Graybar CIO - Beatty D’Alessandro Graybar IT • Mission: • “Provide the solutions that the business and our customers need in a rapid and cost effective way. It’s our job!” • Staffing: • Currently in rollout phase of ERP implementation: 280 employees in IT, including consultants. • Staffing should reduce by 15-20% after rollout. • 3.7% of total Graybar employees. • IT Budget: • 2003 - $55M. • 1.5% of total Graybar 2003 revenue. Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

48. Case Study Graybar CIO - Beatty D’Alessandro Background • Beatty D’Alessandro, CIO of Graybar for one year • 3 years as Vice President over ERP • 2 years as Director of Strategic Planning • Led mergers and acquisitions projects • 15 years of Treasury and Financial Management experience • District Financial Manager • Treasury Manager at Corporate • Field financial management positions • Education • B.A. in Finance and Marketing • MBA with emphases in Finance and Organizational Design Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

49. Case Study Graybar CIO - Beatty D’Alessandro How does Beatty spend his Time? • Managing IT Operations - 40% • Aligning the vision for IT with Graybar’s objectives • Ensuring resources are available • Making tactical decisions • Managing Outside Relationships - 30% • Meeting and communicating with IT vendors and partners • Visiting Graybar customers • Non-IT Related Issues - 30% • As member of executive team, deals with issues that affect the company at large (e.g. advises on Zone organization, new brand, financial arrangements). Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

50. Case Study Graybar CIO - Beatty D’Alessandro To whom do you report? Relationship with CEO. • Graybar’s CIO reports directly to the CEO, Robert Reynolds. • Beatty’s relationship with Bob has been close throughout ERP project • The sheer cost of ERP and its potential to negatively impact business hold keen interest for Bob and the other members of the executive team. • Communication with CEO • Talks with Bob about twice a week under normal circumstances. • Exchanges email 4-5 times a week. • Exchanges are initiated by CEO 50% of time. Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.