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ROLE OF THE CIO

ROLE OF THE CIO. 4/4/02 Presentation by: Kate Gross, Justin Lucy, Supriadi Legino. Introduction: Evolution of the CIO. Introduction. Evolution of IT and IT leadership Role of the CIO today Interviews with Mathew Kraner and Dan McGuire, St. Louis Post-Dispatch

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ROLE OF THE CIO

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  1. ROLE OF THE CIO 4/4/02 Presentation by: Kate Gross, Justin Lucy, Supriadi Legino

  2. Introduction: Evolution of the CIO

  3. Introduction • Evolution of IT and IT leadership • Role of the CIO today • Interviews with Mathew Kraner and Dan McGuire, St. Louis Post-Dispatch • Profile of Ralph Szygenda, CIO, GM • Role of the CIO in the future

  4. The Evolution of IT and IT Leadership • The role of IT and IT leadership during the 1960’s and 1970’s • Increased ability to store and retrieve data drives the focus of IT during this period • The focus of the IT group becomes process automation • IT leadership is focused on ensuring technology functions on a daily basis • IT leaders are isolated from other executives in experience and participation in the business

  5. The Evolution of IT and IT Leadership, continued… • The role of IT and IT leadership during the 1980’s • Personal computers facilitate ability to access and analyze data quickly and efficiently • The focus of the IT group and IT leadership becomes efficiency • Mergers and acquisitions and globalization during the period increase need for IT involvement in reengineering efforts • As a matter of course, IT leaders begin to work more closely with other executives and become more exposed to the business

  6. The Evolution of IT and IT Leadership, continued… • The role of IT and IT leadership during the 1990’s • Mergers and acquisitions and globalization continue • The development of the Internet and the concept of e-commerce force the IT executive into the spotlight • The increasing reliance of business on IT is becoming evident as executives look to IT leadership for solutions to business problems • IT leaders primary goals become very business centered during this period

  7. The Evolution of IT and IT Leadership, continued… • The Computer Sciences Corporation (CSC) survey for 2000 cited the top five concerns of IT leaders as follows: • Connecting to customer, suppliers and partners electronically • Optimizing organizational effectiveness • Optimizing enterprise wide IT services • Developing an electronic business strategy • Organizing and utilizing data Computer Sciences Corporation, “13th Annual Critical Issues of Information Systems Management”, 2001

  8. The Evolution of IT and IT Leadership, continued… • CSC survey facts: • Responses from over 800 IT executives in a variety of industries • 70% of respondents were the most senior IT executive in their company • Respondents were from 26 countries • Fortune 500 companies were well represented in the survey results Computer Sciences Corporation, “13th Annual Critical Issues of Information Systems Management”, 2001

  9. The Evolution of IT and IT Leadership, continued… • Given that business is becoming increasingly reliant on IT, and is impacted significantly by the success or failure of IT initiatives, it has become evident that the successful IT leader will possess the proper authority required to drive change and a broad base of skills and abilities which reach far beyond basic technology oriented competencies.

  10. Role of the CIO Today

  11. IS Leadership and the nine core IT capabilities 1) -Implements structures, processes, and staffing to fill other 8 roles -Alignment of IS strategy and business -Fosters relationships with senior management Who is the appropriate IS leader ? CEO, GM, CFO, COO, CIO, CTO? Who is in charge of your organization’s CRM implementation?2) - CIO,VP, Head of IT: 29% - Director/IT: 19% - VP/Head of commerce: 18% - CEO: 8% - CFO: 7% -VP/Head sales 3% - Steering committee: 3% -VP/Head marketing: 2% - COO: 2% - Other : 10% 1) Mary Lacity, Nine core IT capability, MIS 480 hand out 2) CIO.com, Dec 2001, monthly research about CRM

  12. Where is the CIO position in theorganization? • According to “The 2002 State of the CIO” survey involving 500 CIO: 1) - 74% of CIOs admit they don’t delegate - 51 % now report to the CEO • Nigel Rayner, Research Director at Gartner inc: “ CFOs were at the height of their power about 5 years ago, it was not unusual for the CIO to report to the CFO. Thanks to the rise of e business , this has changed” 2) 1) Edward Prewitt Lorraine CW; The state of the CIO; CIO; Framingham Mar 1, 2002, Vol 15 page 44-49 2) Geoffrey Downey, Computing Canada, Willowdale, Nov 16, 2001, Vol 27 page 1-3

  13. Typical model of - IS Leadership Within Organization More complex organization Large scale Business Sizes CEO CEO CIO COO/VP/CFO…. CTO CIO IT staff IT staff CEO (Acting as CIO) CEO CIO (Acting as CTO) IT staff IT staff Small Scale IT Reliance in Business process Data Processing Automation Global network

  14. Typical IS leader in a more complex organization(Ex: Holding company) President Director Director/VP/…… CEO SBU CEO SBU CEO SBU CEO SBU IT staff CTO CIO Second Manager IT staff CTO CIO IT staff CTO Example: -Deer &co has a corporate CIO and divisional CIO ( CIO.com,view 3/21/02) -PT PLN has mixed of the above structure IT staff

  15. PT PLN Business Area

  16. PT PLN Case Company overview(http://www.pln.co.id) ·    PT PLN is the biggest state owned company in Indonesia in term of assetequivalent of US $ 7.6 billion and about US$ 2.25 billion sales ·    PT PLN has 4 subsidiary company, supporting SBU, 3 operating SBU and 15 regional SBU employs 50,310 permanent employees ·   PT PLN has more than 150 service branches serve28.6 million customer · PT PLN construct, operate and maintain its own power station, transmission and distribution

  17. Before restructuring IT function managed by division manager, 3 level below President.Dir, Acting as head office CTO IT function in business unit operate by CTO, 2 level below unit manager After restructuring Highest position of IT function is VP, 1 level below Pres. Dir. Acting as business thinker Some of SBU has IT manager acting as SBU CIO and CTO, 1 level below SBU CEO PT PLN Case IT function in the Organization

  18. PT PLN Case Head Office Migration Before Restructuring After Restructuring IT Div.Manager President Director VP IT Vice President 11 Board of Directors (5) Chiefs of Sub Section and 1400 PLN head office employees Functional Teams Project Teams

  19. PLN Case IS/IT condition • PLN develop IT since 1978—HR data processing, centralized billing, head office payroll, reporting • No integrated system data base • Various level of utility system • Variety of equipment and operating system • Variety of IT sourcing

  20. PLN CaseUn-integrated system -- Insufficient of IT service • Delay of reporting  poor decision quality • Delay of updating HR datainsufficient HR development and career planning • Delay of response and decision  poor customer services • Inaccurate billing system  revenue losses • Neither clear IS strategy nor standard IT procedure  lack of accountability of IT function

  21. PLN Case Main Problems of PLN IT Development • Culture : bureaucratic, paternalistic • Power and organizational politic Generic strategy Corporate restructuring, culture change, unbundling, go public Functional strategy Implement IS leadership and 9 core IT capabilities

  22. Capabilities and Skills in Emerging IT Function. Medium technical skills High Business skills High Interpersonal skills (Mary Lacity, Core IT capabilities,, MIS 480 hand out) 2002 The state of CIOs survey Communication skills (70%) Business understanding (58%) Strategic planning (46%) Only 10% pick technical skills Edward Prewitt; Lorraine Cosgrove Ware CIO; Framingham; Mar 1; 2002;; vol 15, issue 10; page 78-82) Skills needed

  23. Skills Needed(CIO Magazine March 1, 2002, page 45)

  24. What the CIOs say about skills? • Margaret Myers(1) “ You can have the most wonderful ideas in the world, but if you can’t communicate them, it won’t make a difference” • Glean Headley(2) “ Take advantage of oportunities to answer your friends, questions about their home PC’s, above all experience is the best teacher” • Principal Director to the Deputy CIO of US Department of defense • CIO of the Republic group of Insurance companies

  25. IT Cost/Service trade off For each product and service should we focus on low cost or service excellent Most IT managers face different expectation from different stake holders (Mary Lacity, MIS 480 hand out) What the CIOs say about challenges Staffing problem service concern Inadequate budget cost concern Shortage of time service concern ( CIO; Framingham; Mar 1; 2002; Edward P; Lorraine C W; vol 15, issue 10; page 44-49) Challenges

  26. Challenges (CIO Magazine, March 1, 2002 page 44)

  27. Challenges Emerging opportunity ( Be innovative) • Thinking IT economic(1) Begin to work with demand side • Branding IT(2) CIO is internal Public Relations for IT • Working with HR management(3) Maintain skilled employee and get rid off the useless • Should CIOs be certified?4) People and stake holder will be more respect 1) IT Economis, Susan H. Craham, www.CIO.com ,viewed March 12, 2002 2) Branding IT, CIO.com 3) Challenges, CIO magazines, March 1, 2002 4) Joe Ggliaredi, Certify the CIO, www.CIO.com, viewed Feb 20, 2002

  28. Responsibilities What does the CIO say? Peter Lopez(1) “ I can talk about new ideas if the stuff I deliver is broken and I’m not servicing (the business well)” Susan Love(2) “ Reorganized the IS group soon after starting to align it more closely with the business needs” Bingham(3) “ Security was everyone’s and consequently no one’s responsibility • CIO with Cleveland based GE Lighting (3) CIO at Johnson Outdoors • CIO of the Medical Center

  29. Role of the CIO:St. Louis Post-Dispatch

  30. St. Louis Post-Dispatch:Company Information • Owned by Pulitzer Inc. • About 25 different newspapers nationwide • St. Louis Post-Dispatch employs about 2000 people at three different locations • Circulation of about 300,000 daily and 500,000 Sunday

  31. St. Louis Post-Dispatch:History of IT • Prior to 1995 • No concerted effort in the way of IT • 1995-Present • New leadership recognizes need for IT • Dan McGuire • Promoted to VP of IT in 1996 (First VP of IT in St. Louis Post-Dispatch History

  32. IT Department

  33. St. Louis Post-Dispatch:Mathew Kraner • General Manager of the Post-Dispatch • Experience at Kansas City Star • 3 Different experiences with “view of IT” • Branding • Bureaucratic • Entrepreneurial • View of Dan McGuire’s role

  34. Mathew Kraner:Views of IT • Factors he considers when looking at IT • ROI • Time and money • Need and benefit, short and long term • One of the key decision makers?

  35. St. Louis Post-Dispatch:Dan McGuire • History at the St. Louis Post-Dispatch • 34 years at Post-Dispatch • All 34 years in technology • Almost all in management • 7 Years as Director of Technology • 4th year as VP of Information Technology

  36. St. Louis Post-Dispatch:Dan McGuire • Change is a good thing, really • Views on senior management’s view of IT • Prior to 1998 viewed as the outsider • Promotion and trial by fire • Earning the respect of other senior management • Living in the “Show Me State”

  37. St. Louis Post-Dispatch:Dan McGuire • IT capabilities • Not nine separate roles • Four overlapping roles dependent on teamwork • Too much for one man? • Efficiency • 40 man team v. 70+ at most other large newspapers • Almost everything done in house

  38. Dan McGuire:Discus Project • The hunt for a fix • What is Discus? • Circulation/Billing/Accounting database • Replacing several old systems that were not integrated • Prior to Dan McGuire • 10 rounds, last one standing wins • Too many hands in the cookie jar?

  39. Dan McGuire:Discus Project • Role of the CIO • “Ball of string” • Discus Turnaround • Before Dan McGuire was assigned the project, different departments had been working with it for over three years, with no end in sight • In 1999, 200 problems were identified and “fixed” within 10 months

  40. Dan McGuire:Discus Project • Current state of Discus • Entered phase one of July, 1 2000 • Went “live” (phase two) January 7, 2001 • All departments are currently using • Still not up to potential

  41. Dan McGuire:Goals • Ideal department • Teamwork, teamwork, teamwork • The future of IT at the St. Louis Post-Dispatch • Bigger and better? • Outsourcing? • Nothing to gain

  42. Role of the CIO:General Motors

  43. General Motors:Company Information • Founded in 1908, largest vehicle manufacturer in the world • Revenue $1.5B, net sales $177.3B • 362,000 employees worldwide • Facilities in over 30 countries, 200 in N.A. • Vehicle sales in more than 200 countries • 15.1% of world vehicle market • 2000 IT budget of approximately $3.2B

  44. Ralph Szygenda: CIO and Group Vice President of Information Systems and Services, GM

  45. Ralph Szygenda: Background • First introduced to telecommunication, computing, and engineering in the U.S Air Force • 21 years at Texas Instruments (TI) culminates in designation as Vice President of Information Systems and Services, CIO, and Vice President and General Manager of TI Enterprise Systems Business Unit; renowned for his business process reengineering efforts during his tenure at TI • 3 years at Bell Atlantic as Vice President and CIO; hired specifically to reengineer business processes

  46. Mission: Facilitate GM’s Transformation Into a Digital Enterprise

  47. Challenges of the Mission • Change the mindset of senior management • Implement the 9 core capabilities model to ensure strategic IT capabilities are retained in-house • Reduce GM reliance on EDS by engaging other IT suppliers • Reduce annual IT spend

  48. Changing the Mindset of Senior Management • The realization that use of computers is a foreign concept to many GM executives • Face-to-face meetings with senior executives (including the CEO) to educate them about IT and its significance to business • Relationship building to gain an understanding of the the automobile industry and GM

  49. Implementing the 9 Core Capabilities Model Key to implementing the 9 core capabilities model was the creation of a top notch staff. Ralph’s requirements: “When I brought people in, they had to have two competencies. They had to know how to run a business, and they had to know information technology.” Teresko, John, “Transforming GM”, Industry Week, Dec 2001/Jan 2002

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