The CIO post is evolving, together with the perception of their role within the business. IBM’s Global CIO Surveyhas identified the four distinct ‘mandates’ or approaches CIOs are taking as they implement ICT strategy.
Leverage: Streamline operations and increase organisational effectiveness.
Expand: Refine business processes and enhance collaboration.
Transform: Change the industry value chain through improved relationships.
Pioneer: Radically innovate products, markets and business models.
“The four different modes of operation depend on the business need, the maturity of the business and the relationship the CIO has with all the rest of the business,” says Ross Pearce, senior managing consultant, IBM Global Business Services.
The mandate, he explains, is not specific to an industry or a sector, and can change as organisations change. “These mandates are where your emphasis lies in a particular point of time," he says. “It can shift if there is a new CEO, a new business model or indeed a whole new range of products and services that require IT to enable that.”
The report, says Pearce, will help verify in their mind where CIOs should be focusing (see sidebar on 'Pointers from outperformer CIOs'). “The crucial thing is for the CIO to recognise that and to align his or her priorities and behaviours with that but be flexible enough to work across all mandates if that is appropriate as well.”
Pearce says more than 3000 CIOs across the globe, including 181 from Australia and New Zealand, participated in the 2011 survey.
Pearce says globally, CIOs tend to fall into the 'expand' mandate. This mandate was 50 percent of respondents globally, and 46 percent in ANZ. New Zealand CIOs, however, show a focus over both the expand and leverage mandates.
Pearce points out, however, that the leverage mandate is the “foundation” for all CIOs, “that is why it is sitting in the middle”. (see graph below)
For CIOs, the leverage mandate means “making sure you have got streamlined operations which can increase the organisation’s effectiveness,” he says. “You are running a tight ship, you have got all your infrastructure well designed and in place.”
Pieter Bakker, general manager IT at the Ports of Auckland, and one of 54 New Zealand CIOs interviewed for the survey, agrees. “If you don’t have it sorted out, you don’t get invited to play in the other levels.”
What does this mean for CIOs? Says Pearce, “If push comes to shove, the 'leverage' people will be focusing on streamlining, whereas the 'expand' people will say, ‘I have got all that pretty much sussed. I am going to do more in enabling the business to be more effective.”
The transform mandate, says Pearce, “is about taking a lead in the industry” and it applies to a company like the Ports of Auckland which is expected to be influencing the way things are done in the transportation sector. Likewise, Air New Zealand and some of the major banks are in this space.
The pioneer mandate, on the other hand, refers to “radical innovation, and being prepared to be at the bleeding edge”.
CIOs in the telecommunications space, more than any other industries locally, are focusing on this mandate. In the telco business, “much of their offering is inextricably linked with their IT systems and if their IT systems fall, they have got no customer base," says Pearce. “They have got to be continuously ahead of the game and it is highly competitive as well. As a CIO, if you can offer the business something that gives you a three-month advantage over the competition, that is good.”
Pearce suggests that next time CIOs are meeting with their executive peers, to ask them for half an hour of their time. “Show them the four possible priority areas and ask them, ‘Where do you think I will be working based on where the business is at, and in the next 12 to 14 months’?”
For Bakker, this is part of a CIO's engagement with their colleagues at the executive table. “You need to understand where your business strategy is at. Once you have got a good handle of that, you know where the pain points you need to address through discussion with your colleagues.”
The CIO study, meanwhile, finds CEOs and CIOs think in a similar fashion around future ICT challenges and the complexity involved, and what they should be focusing on to spur business growth. These are said to be business intelligence, getting closer to the customer and people skills.
The study finds 57 percent of global CIOs anticipate more change and complexity in the next five years, while 55 percent of global CEOs interviewed for the 2010 CEO Study anticipate the same.
Asked for factors that have triggered this alignment, Pearce says a lot more CEOs now are “technology savvy”.
“They are starting to see the significant impact that technology can have on how they can better serve their customers, how they can be more efficient,” says Pearce, who conducted the local survey.
Pearce says another change is at the governance level as boards of directors have a “lot more awareness now of how technology can enable the business”.
On ICT investments, business intelligence and analytics remain at the top when it comes to visionary plans for CIOs. But the biggest change comes from cloud computing, which is number four this year. In 2009, cloud computing was the lowest from a list of 18 choices. Sixty percent of ANZ CIOs view cloud computing as strategic and plan to implement it in the next five years, a significant jump from the 2009 study which indicated only 39 percent of ANZ CIOs were considering the technology at the time.
There are two areas where local CIOs gave a higher ranking - virtualisation (80 percent local against 68 percent of global respondents) and self-service portals (83 percent local against 57 percent of global respondents).
Pearce says New Zealand organisations feel they have already delivered in the self-service space. “Perhaps New Zealand is ahead of the game”.
Bakker cites, for instance, Air New Zealand’s self service portals that he described as a trendsetter and “have taken off like a rocket”.
Pearce says in New Zealand, virtually every CIO (98 percent of local respondents) said business intelligence and analytics is a major priority, echoing the results of the 2009 study.
“It speaks to the fact there is an increasing amount of data that organisations have, but converting that into information and intelligence that allows people to make good decisions is a major challenge.”
Pearce says virtualisation has been “top of mind” for New Zealand CIOs and links this to the fact that getting costs under control is still on the people’s radar.
Sidebar: Pointers from the outperformers
Ross Pearce says as part of the survey, they asked ‘outperformer CIOs’ or those whose companies have done well even during the global financial crisis, on what they are doing to deliver on their respective mandates.
Expand: Refine business processes and enhance collaboration (46 percent of ANZ CIOs)
Outsource to focus on differentiators
Communicate and collaborate internally
Focus on business process management
Review and update legacy environment
Leverage: Streamline operations and increase organisational effectiveness (22 percent of ANZ CIOs)
Standardise infrastructure and processes
Control legacy costs
Implement collaboration tools
Conservative introduction of technology
Pearce says a key question for CIOs in this space would be ‘how many disparate architectures does your organisation currently have, and why’?
Transform: Change the industry value chain through improved relationships (17 percent of ANZ CIOs)
Use ‘big data’ and real-time information
Simplify for clients/partners
Enhance and expand the value chain
Use risk-management frameworks
Pioneer: Radically innovate products, markets, business models (14 percent of ANZ CIOs)
Pilot technology for social value
Explore new sources of revenue
Enhance customer experience
Pursue non-stop growth.
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