It's crunch time for CIOs. As organisations everywhere continue their relentless evolutionary march towards e-business, the CIO role is evolving fast and no CIO can afford to sit on the fenceLast month, in Part 1(Out of the Primeval Swamp), GartnerGroup vice president, executive programs worldwide Marianne Broadbent explained that CIOs have traditionally managed both demand and supply. In the e-world, she says, many CIOs will find they can no longer manage both and will have to make a choice. That could be good news or bad news for CIOs, depending on their interests, inclinations and temperaments. Furthermore, for any CIOs who may have been feeling like square pegs in round holes for some time, the GartnerGroup report offers insight into the source of their unease and the best way to redirect their talents.
Broadbent's May report, Shaping CIO Agendas in an E' World, is based on feedback from more than 1400 CIOs from around the globe. The report found increasing differentiation among organisations and their expectations of their CIOs. Broadbent says that in effect the CIO role everywhere is mutating to the point where we are starting to see several quite-distinct species or combinations of species of CIOs. Just how the evolution is manifesting at the individual organisation level depends on a series of factors. These range from the extent to which the CIO is focused on demand and/or supply management, to the nature of their enterprise drivers and initiatives.
At the same time a wide range of organisational and situational factors - from current investment climate to perceived and actual organisational capabilities - are combining to determine exactly which of the new species of CIO is needed in a particular enterprise. With the pattern of roles and responsibilities almost endless, CIOs must now work out what role they want to play into the future, and to ensure the role they fill allows them to make the best possible use of their inclinations and talents.
"CIOs have typically performed many roles; however, in the mid-to-large organisation, I think that the days of someone doing all of those roles is really going, Broadbent says. "Individuals who currently are IT executives or CIOs, as well as those who would like to be in that role in future, have to look very carefully at what kind of executives they want to be. What are their strengths and weaknesses? Where do they want to develop in the future? What kind of business contribution do they want to make? Now is the time to decide.
Lost in the E-World Again
In biological terms, as we noted last month, Broadbent sees the genus CIO as neither dead nor obsolete, but instead as mutating into a number of species with different characteristics.
Her report paints a picture of a new world where the penetration of technologies like the Internet and the emergence of e-business is forcing organisations to realise - fast - the integration of business and IT decision-making. In this world:
- the notion of alignment has been transformed into a concern for dynamic fusion between business objectives and IT capabilities;- the fusion of business and IT is about enabling greater enterprise speed, innovation, adeptness and customer-centricity;- implementing fusion requires that all executives learn a new and sometimes challenging set of languages, perspectives, decision rules and cultural values; - CIOs are working with their executive colleagues to derive greater value from IT investments and realise benefits while concurrently managing IT investments cost-effectively; - the business focus of the CIO and information systems (IS) organisation is now assumed: the purpose of IT investments is to ensure that business initiatives are both enabled and stimulated; - the business focus is usually an addition to CIO technology leadership responsibilities. The nature and level of responsibilities continue to expand; and - the priorities of CIOs are set in the context of wider external drivers and enterprise initiatives.
Successful IT executives clearly understand not only the agenda of the enterprise but also their role and responsibilities in achieving that agenda. Better still, their executive colleagues perceive their role and responsibilities the same way they do.
But other organisations and CIOs have failed to adequately recognise either the shift in role or the increasing dimensions of the role. Broadbent says one part of the ongoing leadership challenge for CIOs is to help others understand the multiple agendas facing the mutating species, the CIO. The enterprise needs to have a range of capabilities to fulfil essential and difficult roles and responsibilities.
As reported in Part 1, Broadbent says the priorities of leading CIOs towards 2001 can be summarised with four e words:
Energising enterprise strategy and initiatives Enabling new business and initiatives Executing cost-effective solutions Exploiting technologies, sourcing opportunities and benefits.
The priorities of each CIO are set in the context of his or her enterprise and its environment. Increasingly, the CIO is a key energiser of strategy and new ways of doing business, anticipating customer demand and linking suppliers. In other enterprises, the CIO is an enabler, ensuring that the resources are in place, or can be quickly marshalled, for the business to achieve its ambitions the report says.
Concurrently, many CIOs have responsibility for ensuring that they can execute specific strategies or that they are able to maintain vital services. When technology-enabled services are in place, the CIO often needs to prod and support business groups to ensure that the capabilities in place are used well and that benefits are realised.
As mentioned previously, CIOs have traditionally enjoyed a dual role embracing management of both demand and supply. But as for other executives, the shifts and changes in the enterprise and its environment are changing the organisation's expectations and perceptions of a successful CIO.
Now CIOs in many larger enterprises are finding several people are involved in fulfilling the many roles and tasks that they were once assigned. As a result, GartnerGroup finds more and more CIOs having to choose whether to focus solely on demand or to concentrate on supply. In mid-size to large enterprises, there is now a cluster of executives with predominantly IT or business-and-IT-fusion responsibilities, the report says. That cluster represents a number of species of the genus CIO. The role and responsibilities are diverging. But each of those diverged species is required to stimulate and deliver IT-enabled capabilities.
The responsibilities of demand-driven CIOs and business visionaries are increasingly hard to distinguish from other business executives. However, without strong supply-oriented leadership, the delivery of enabling IT capabilities is jeopardised and strategic and business initiatives cannot be realised.
The demand management challenge has always been about shaping and managing informed expectations about the business use of IT. The supply management challenge concerns delivery of timely, efficient and cost-effective services to meet those demands.
In some larger organisations, CIOs will continue to manage only supply, either because someone else is already handling demand or because the organisation isn't sufficiently mature to have someone effectively handling demand. Similarly, Broadbent says, in Australia as elsewhere there are now a number of CIOs whose roles are entirely concerned with demand. But as we indicated last month, GartnerGroup is familiar with organisations that have at least four clear types of positions, each demanding different attributes and skills:
A demand-oriented CIO operating across the enterprise (or perhaps a large city or state government) A supply-driven chief technology officer operating across the enterprise, sometimes referred to as chief infrastructure officer A chief technology opportunist heavily involved in stimulating new business opportunities, particularly in the e-business arena Line-of-business CIOs, or business information executives, who combine demand and supply functions for their business units (or government agency or department).
There is no doubt that increasingly mid-to-large organisations are finding they need people performing all the above roles, and that one person cannot fill them all, Broadbent says. So the senior business executives need to understand what mix they actually require amongst their IT executives and that they're not going to get everything in the one person.
And the IT executives now have to look at where their biggest strengths might lie. Are they with the demand-side role: in managing relationships with senior executives; in coaxing, coaching, acting as their personal trainers; in developing an understanding of what the business requires; in, perhaps, developing and playing that energising role in a new business? Or would they most enjoy a different kind of role - that is, ensuring that the organisation gets absolutely top-level cost effective services provided to it?
There are many gradations in between, Broadbent says. But if you look at those four different kinds of roles that we identify, they each require different personal attributes and different sets of strengths in terms of the individual. And it's very uncomfortable for some CIOs at the moment to be the wrong person on the wrong peg.
Broadbent says her discussions with a number of CIOs over recent times have revealed numbers who feel increasingly uncomfortable with their role. In many cases, she suggests, discomfort may arise from the fact that the CIOs have unknowingly been trying to fill a role which is increasingly misaligned with their own interests, talents and temperaments. The report, she says, might be a useful catalyst for identifying the source of the discomfort and then taking steps to redress the problem.
Leading and Responding
Gartner Executive Program clients identify 10 enterprise initiatives that are preoccupying their time. While the emphasis of each is different, the report says there are common themes that indicate how enterprises are responding to the volatility and uncertainty in their environments. These might best be summarised as:
Start with the customer
Shorter cycle time
Create innovative products and services
Streamline business processes
Improve risk management
Optimise supply chain
Build flexible business architectures
Partner and make alliances
Take care of your people
Actively manage physical and intellectual capital assetsEach CIO needs to reflect: What are the positionings of the various parts of our enterprise in relation to each of the enterprise initiatives above? the report says. For example, to what extent are we leading or lagging with customer-centric processes? How critical is our focus on cycle time? How much effort are we putting into creating innovative products and services? How are these initiatives impacting on our business model - the nature of relationships and value propositions we have with customers, suppliers and other stakeholders? The answers to these questions will shape the particular species of CIO appropriate for the enterprise at any given time.
Lessons to Learn
Broadbent says there are numbers of lessons Australian CIOs can learn both from the overseas e-business experience in governing and managing e-business and also the CIO's role in driving the e-business agenda.
One important factor is that while the business initiatives may be very much happening within the lines of business - within individual products and services - often the base infrastructure that's required goes across the whole organisation. So there is a continuing need for organisations to look at how they can best deliver their services using the capabilities at a coordinated level.
For a billion-dollar retailer like Lands' End, known primarily for consumer sales of apparel through its print catalogue and the Web, that means relatively little change to their business model or infrastructure.
If you look at Lands' End, their model is very easy to understand because they've always been in the catalogue business,"Broadbent says. Their front end for the Web is obviously just another channel to them, while the back end is exactly the same, there's nothing different once you order, the back end is the same.
However, where there are differences in the product or the service to be offered, or where the corporate drag is too great - that is, the organisation can't move fast enough into e-business - then it faces a choice. It may decide to develop its own infrastructure or else contract on a commercial basis with the bricks and mortar parent organisation.
There's another lesson Australian CIOs should take from e-business initiatives overseas, Broadbent says, and that is that there are plenty of older technologies functioning very nicely in the e-world. Often it is only the customer-facing part and the interface to the legacy systems that are the new requirement. It may not be necessary at all to throw out legacy systems because many of them are handling transaction volumes and that's what we need them for.
The final lesson relates to the importance of content management.
It is critically important to understand what the content is that we really need to manage, Broadbent says. These days in an e-world you capture so much information from a client that you have to be very careful how much of that you really need to keep and really need to be able to manipulate.
CIOs need a clear understanding of which is which.