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Shifting tides

Shifting tides

Leading a customer-focused team, moving to cloud-based services and the changing role of the CIO were key themes at this year’s MIS100 Event.

There isn’t a blueprint for being a CIO, says Mike Clarke, CIO of SkyCity Entertainment Group. CIOs, more than any other chief officer position, are faced with hugely conflicting objectives, he says.

CIOs are asked to reduce cost and at the same time attract and retain staff. They are asked to deliver more on reducing budgets. They are expected to be at the forefront and managing risks at the same time.

The secret to dealing with those objectives, and to successfully deliver what the business demands, is in a combination of leadership, structure and culture, Clarke says.

CIOs need to be both the leaders that inspire people to do what they normally wouldn’t and the managers that deliver structure. If you are a stronger leader than manager, make sure you have people around you who are solid managers, and vice versa, he says.

Clarke was one of the speakers at the MIS100 Event in Auckland, which featured the results of the annual profiling of the top ICT users in New Zealand, and insights from some of the CIOs in the 100 organisations.

Lead and manage

In his presentation, Clarke talked about identifying working styles based on the Merrill Reid model. The model has four fields with Analytic working style at the top left, Amiable at the bottom left, Driver at the top right and Expressive at the bottom right.

A lot of IT people will identify with the left hand side, whereas the boss is likely to be a driver. Sales people often belong in the lower right expressive corner, Clarke says.

Analytic people are highly detail-oriented, objective and well organised. Amiable people, also on the left hand side, are sympathetic to the needs of others. On the other side of the model are the drivers, who are objective-focused and sometimes tactless and brusque. The expressives, in the lower right hand corner are able to look at the big picture and act decisively.

A good IT team must have staff members from all the different working styles, with the right people in the right places, Clarke says. “As we move to outsourcing and the cloud, we need more of the driven and objective-focused, right hand side people and less of the analytics on the left. It is a people shift,” he says.

Closing the gap

Four years ago, Ross Stephenson was employed to bridge the gap between IT and the business at Westpac. At that point it was more like a chasm, with the IT team based in Wellington and the business head office in Auckland, says Stephenson.

In many organisations, there is a perception that the IT department sits in a back office somewhere, consumes lots of money and delivers things the business didn’t want in the first place, he says, and Westpac was no exception.

Since 2007 the bank has been using Net Promoter Score – a customer satisfaction metric – to get a picture of how frontline Westpac staff experience IT services.

Companies find out their Net Promoter Score by asking customers to rate a statement on a zero to 10 scale. In Westpac’s case the statement is: “I have been provided with the systems and technology to serve my customers well”. The promoters give a 9-10 rating, the passives 7-8 and detractors a 0-6 rating. The percentage of detractors is subtracted from the percentage of promoters to calculate the score.

The result of the first survey was sobering, to put it mildly. “We got a score of -55,” says Stephenson. “Even if you have never heard of Net Promoter Score, it’s pretty obvious that is a crap result.”

However, the disappointing result led to a positive outcome – the team came up with an action plan to improve customer satisfaction within the organisation.

The plan was simple – make IT work, make IT human and make IT simple, he says. Users simply wanted the systems to work so they could do their jobs, so the IT department focused on stability of existing systems, instead of investing time and money in new things. The survey showed that customers did not know what the IT department did or who they were. To address that, Stephenson set out to put a face to IT. “We stepped out from behind our computers and started visiting branches,” he says.

He also introduced a monthly hard-copy newsletter for staff - not online - because that is what customers wanted.

Stephenson’s team created a centralised “getIT” service team that takes care of all IT needs involved in a new service, or when new staff comes onboard.

All these initiatives have resulted in a totally customer-focused IT team, says Stephenson. “We now have great relationships with our customers, which has improved trust.”

In September 2009, the Net Promoter Score had increased from -55 to -4, which is a great improvement, Stephenson says. But in March this year it had dropped back to -15.

“We’ve learnt a few lessons,” he says. “You’ve got to keep improving. But we have also raised the bar. People now expect more.”

Building trust into the business

Trust was at the core of the presentation of Ofer Reshef, manager of security, risk and information services at Fonterra.

Business is based on trust, he says. Fonterra works with many different stakeholders and there is an expectation of trust going in both directions. All those expectations are built into processes at Fonterra, he says.

Managing risk in the logistics chain is part of the company’s holistic approach to eliminating IT risk, he says. Another important part is managing security risk.

Based on a Gartner model, Reshef outlined four stages of the security maturity curve. The first stage is blissful ignorance. To move from this stage something has to happen – for example, an attack or a bad audit report. Once an organisation moves on, it reaches the awareness stage where it comes up with a vision of where it wants to be and a road map of how to get there. The next stage is the corrective stage. This is where all the work is done and security metrics are built into all processes. “It’s about everyone understanding their role in every-day security – from end-users through to senior management,” he says. The last stage is continuous improvement. “If you don’t stay focused it’s easy to fall back to the blissful ignorance stage,” Reshef warned.

Fonterra is at the corrective stage at the moment, he says. The company’s vision for information security was to build security in for business trust.

“We had a simple strategy for getting there,” he says. “Get secured, stay secured and change securely.”

Cloudy forecast

The cloud-computing model is maturing with new facets such as elasticity of the network and more service-based payment structures, says David Downs, director of Microsoft Services at Microsoft New Zealand.

“The promises of utility-based computing are becoming attractive to more and more organisations,” he says.

Microsoft is seeing a big change in the IT delivery model, Downs told the seminar attendees. Downs has been with Microsoft for 10 years and this is by far the biggest shift he has seen the organisation go through.

Ninety percent of Microsoft’s product development is now happening on the cloud-based platform, he says. In New Zealand we are only seeing a small part of what is happening, he says.

Downs predicts that cloud computing will be among the top three trends in next year’s MIS100 list. “IT departments can’t keep shaving costs and keep delivering the same services,” he says.

Peter Macaulay, principal, end user practise at IDC New Zealand, underscores the changes contemporary CIOs have to grapple with – from external factors to shifts in the job itself – that makes the role “so tricky”.

“There is no new normal,” he says. “We have been through a time of great change. Most of us would like it to settle down for a bit – but it is not going to. We are not going to get a chance to catch our breath.”

CIOs continue to see changes in their reporting lines and accountabilities, says Macaulay. The hands-on, operational computer managers of the early IT days have gradually morphed into what we know as CIOs today, he says. More changes are afoot.

Today’s CIOs are moving away from operational responsibility and taking on more innovative and strategic roles. However, the new forward-looking CIOs could be restrained by changing reporting structures within organisations, says Macaulay.

According to IDC’s research, 21 percent of CIOs now report to the COO and 13 percent report to the CFO. If IT is seen largely as an operating unit, it is hard to drive innovation from that position, he says.

Microsoft Services and Gentrack kindly sponsored this year’s MIS100 Event. Please go to cio.co.nz for the 2010 report and the speakers' presentations.

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