I have always found the phrase "IT and the business" to be ironic. "And" typically connotes connection and unity, yet in this context, it is a divider. IT, this phrase suggests, may work alongside and support the business, but it is certainly not one and the same.
But now that companies are getting smarter about IT's importance to the business, there is a new "and" in town. The SVP of technology and operations role is springing up in all sorts of industries. It represents not only a new level of organizational integration between IT and the business but a new career opportunity for CIOs as well. Some heads of tech and ops preside over a newly merged organization, and others keep the organizations separate but have accountability for both. I spoke with three such ambidextrous executives to gain their perspective on the role.
Pat McNamee joined Express Scripts, a $19 billion pharmacy benefits management company as SVP and CIO in 2005. Two years later, he was named SVP of operations and technology, responsible both for IT and for client and patient services; less than a year later he was promoted to EVP of operations and technology. In his current role, McNamee runs an integrated organization of 1,200 IT staff and more than 5,800 operations staff responsible for making sure the company's 40 million members receive their prescriptions on time.
"In IT, we had improved our reliability and our ability to develop new applications. But there was still a disconnect between the capability of the systems and their impact on operational effectiveness," says McNamee. "So our CEO made the decision to integrate IT with operations, and he made me accountable for the whole thing. His thinking was that we could accelerate change and improve processes more quickly with a team that is focused on an integrated set of objectives."
A case in point: Prior to the integration of operations and IT, regionally distributed operations groups were using unique applications instances, and every regional GM had his or her own order management processes with a unique set of metrics. "When we merged IT and operations, we looked across all of the sites and found the five or six best practices on turnaround time and defect reduction and built an applications road map across all of the regions. We then held the GMs accountable for the new standards," says McNamee. "Having an integrated approach and control over so many levers put our process improvement on steroids." His advice for CIOs interested in a similar role:
Turn a cost centre into a corporate investment. In addition to the age-old wisdom of knowing the business and building relationships, McNamee points to something more specific. "As CIO, you are responsible for a significant spend in IT. If you can build a process for engaging the company in how most strategically to spend that money and how to bring a return on that investment, suddenly the discussion moves away from mainframes and infrastructure, and you become a leader in driving operational improvements," he says. "If you build a successful governance process, you have just worked your way up to the point of controlling a corporate investment that drives business value and revenue." Less an order taker and more of a business driver, you are one step closer to the integrated role.
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