In sync with change
- 20 August, 2012 14:35
"Always design a thing by considering it in its next larger context -- a chair in a room, a room in a house, a house in an environment, an environment in a city plan."
Frank Gens, chief analyst at IDC, aptly takes this quote from Eero Saarinen, one of the masters of 20th century architecture, as he delivered the opening keynote at this year's CIO Summit.""
Gens underscores the CIO's role in ensuring the survival of the business beyond 2020 amidst a vastly altered technology landscape with a new ecosystem of partners, customers -- and competitors. "
"We're in the midst of a once every 20 years shift to a new technology platform," says Gens. "The decisions you make in 2012 to 2013 will decide the success of your business or cause its failure." "
CIOs and vendors need to embrace the emerging "third platform" and its four pillars -- the cloud, mobile, big data and social business, says Gens.
Read part two of CIO New Zealand's special report on the CIO Summit 2012: The leadership imperative
Gens says uptake for this third platform will grow 13 to 20 times faster than the PC-based second platform technology after 2012. Gens recalls the late-1980s when enterprises moved from their first platform (mainframes and terminals) to the emerging second platform (PCs, clients, relational databases).
Technology giants like Wang Laboratories, which at its height had annual earnings of US$3 billion, failed because they did not adapt to the introduction of personal computers, he says.
Today's vendors and businesses could face the same fate if they do not adapt to and embrace cloud technologies, he warns.
Watch this highlight of Frank Gens' keynote at the CIO Summit.
The currency of the future
Another keynote speaker, Facebook CIO Tim Campos, says CIOs have in their hands one of the most transformative things in the industry right now -- data.
Data represents a unique opportunity for CIOs, he says. "We are all sitting on mountains of valuable information we can make use of to drive values within our companies and to create value for our customers."
Data is the new business currency, and Facebook is "swimming in gold" with over 500 million users providing it with data every day, says Campos.
Campos says the terabytes of data Facebook collects every day from its users is critical in supporting its growth, and the products it sells to its advertising and marketing partners.
Campos provides interesting statistics on the amount of data managed at Facebook, which has 900 million active monthly users, 500 million daily users and the same number for those who access it through mobile.
Everyday, the site has 125 million new friendships, 3.2 billion likes and comments and 300 million photos uploaded, 10 billion web hits, 108 billion queries on MySQL and 10TB of data put into Hadoop systems.
He cites the 'People You May Know' feature of Facebook which recommends potential friends to users. Campos compares this to Amazon's recommendation engine, which he says grew Amazon's unplanned online retail sales by 33 percent.
"Our product is unique. In itself it doesn't really do anything. We need you to make friends to really get the most out of it, so it pays for us to know who you may know," says Campos.
Campos demonstrates Facebook's recently added Pages Insights which shows brand and marketing managers demographic and analytics on their Facebook fans and provides tools to pursue new customers.
When asked where in the business should the data be interpreted, Campos says this should be handled outside the IT department.
"IT is better at maintaining standards and security, and that's why I see IT as managers of the data warehouses and responsible for making and delivering the systems for the data scientists in a timely and effective manner."
Another keynote speaker, Paul Strong, CTO of global field and customer initiatives at VMware, advances another facet of data. "Data is the source of your differentiation," he says, explaining that a key challenge for CIOs today is how they should leverage big data to differentiate the business.
At the same time, he says, new consumption [of technology services] is changing the technology landscape and expectations of business partners.
For the past 30 years the CIO role has mainly been as chief infrastructure officer, Strong says, but their true role is to deliver technology the business needs at the right price, with flexibility.
With virtualisation and the cloud, CIOs have the opportunity to rethink how they deliver IT. CIOs can discuss what business colleagues what differentiates their enterprise, what it wants to achieve in the marketplace.
In this environment he favours the concept of 'fast failure'. "Failure is the currency of knowledge, but the trick is to succeed quickly, with lower cost and minimum risk," says Strong.
In this scenario, he sees the CIO and the IT group moving from being the sole provider of IT to curator of external services.
He points to VMware, which uses around 25 software as a service applications ranging from healthcare to payroll.
"We curate those apps that do not differentiate us and source them as commodity from somewhere else," he says. "We chose to focus our efforts on what truly differentiates us, innovation in terms of software."
Read part two of our special report on the CIO Summit 2012: The leadership imperative
View from the top
Neil Cowie, CEO of children's clothing retailer Pumpkin Patch, shares insights on the challenges faced by the top executive in the enterprise and what they expect from CIOs.
For many CIOs, their ambitions lead them towards the CEO's chair, drawing inspiration from the likes of Sir Ralph Norris, who rose from being a programmer to become CEO at ASB, and later head of Air New Zealand and Commonwealth Bank of Australia.
But Cowie says this aspiration will remain just that for most CIOs. He cites a recent Gartner study of 220 CEOs, which found CEOs think CIOs are too preoccupied with technology decisions and not involved enough in overall business strategy making. Most damning of all, the study found less than half a percent of CEOs think their CIOs are suitable to take over their role.
"This is an indictment on how CIOs are perceived at organisations and around the executive table," says Cowie. "It's about time there was some change."
Cowie says if CIOs want to sit at the executive table, and stay there, they need to become more involved with innovative and creative business strategies.
Cowie says Pumpkin Patch CIO Zarina Thesing has direct influence on business strategies -- especially in online retail which the company is increasingly investing in.
"The CIO role has changed dramatically from keeping the lights on to becoming a strategic partner in the business," says Cowie. In particular, Cowie says IT needs to take a leading role in the implementation of social media strategies in business -- a domain usually spearheaded by marketing departments. "As the CEO of a retailer, I think the IT guys need to be the thought leaders in this space," says Cowie.
"IT has always been focused on security and control, and all of a sudden you've got this media that you have no control over. The CIO needs to be the moderator, and has to help the rest of the business understand how to use it and use it well."
At the same time, Cowie says most CEOs are not interested in hearing about day-to-day technology issues. Instead, he encourages CIOs to bring ideas for business growth through technology to executive meetings.
Technology "ownership" is growing within other areas of business and the CIO needs to engage with other business managers, says Cowie. This is the "new norm" for CIOs. "Analyse core issues and generate simple solutions. If you can take a challenge and turn it into a solution, you become a strategist. If you want to become a true executive, you need to start building relationships across the organisation."
The opportunities presented by data also rank high in the CIO's to do list. "You have all this information, start using them effectively," he says.
The leadership imperative
Another CIO turned CEO, Ron Hooton of ProCare Health, tracks how the ICT leadership role has morphed through the years. "Today, the CIO should not be thinking about technology at all, they are a business person who has their heads inside the business models of customers," says Hooton who was CIO of the NZ Defence Force prior to his current role. "Being a CIO is not about understanding technology, it is about understanding how to innovate in business using information and communications technologies.
"It is about being part marketer, part sales expert, part R&D," says Hooton. "There will be a bit of supply chain in there and of course you will understand the numbers. The only thing not compulsory for a CIO is understanding what happens in the server room."
He says an emerging challenge for businesses is embedding their technology inside the businesses and the minds of their customers. "Technologies such as self-service, once the world of the banks and other large institutions, is now accessible to any enterprise and embedding technology in the hands of the customer is very powerful," he says.
Hooton stresses the need to look outside one's own industry for leadership insights. He cites Apple for setting a new standard for usability and reliability, and Air New Zealand for sophistication around the customer interface and self service.
Alan Hesketh, general manager, group information services at Super Retail Group, agrees how the Apple ecosystem has impacted IT and raised expectations of both users and customers. For CIOs, he says, "The challenge is being able to understand enough to think how you minimise the risks and actually maximise opportunities using new technologies coming through."
Hesketh says "constant change' in business technology makes the CIO role "so much fun but also so much of a challenge."
"It is being able to understand enough to think how you minimise the risks and actually maximise opportunities use new technologies coming through," says Hesketh. "We have to govern the requests," he says, "How do we make sure we really focus on those things that really make a difference?"
Johan Vendrig, CIO of healthAlliance, proffers two interesting insights into being a CIO -- the art of being invisible and the art of pragmatism.
On the first, Vendrig explains much of the strategic relevance for information services is to ensure we get the basics rights. This means core information systems meet service levels and operational groups can rely on the predictability of good system performance.
Vendrig says the challenge is the need to keep information flowing among groups. "As soon as you are noticed, there is trouble. You are not noticed if stuff just works. That is pretty tough."
At the same time, IS has to be pragmatic. "Although grand visions are always a good guiding light, strategic success comes from being able to deliver this vision in bite sized chunks," says Vendrig.
Vendrig says another role of the CIO is as chief "orchestrator". He says more business systems today rely on a multitude of IT enablers provided by a variety of suppliers. "Orchestrating governance and collaboration across these complex service delivery models is a critical component of CIO roles in many industries."
"We need to be experts at a lot of stuff, understand what the organisation is trying to achieve and achieve those goals," says John Holley, former CIO of the Auckland Regional Council and now general manager operations for Visible Results.
He says there is a difference between having an IT strategy and being strategic. The acid test for a CIO is this: "Are you a doer or do you support the doer?"
"Calling IT 'strategic' in an organisation is often a miss-categorisation because we tend to think not being strategic is not important," says Holley. "Whether the role is strategic or operational is just an important. There is nothing wrong in supporting/enabling the 'doer' as it makes the 'doer' more effective and more likely to achieve the strategic goals."
As for IT being seen as a cost centre or needing to have a higher profile in the executive table, he advises, "What you can do is prove yourself and change that, [by] understanding what their requirements are and delivering. So when you start talking to the board you are seen as a contributor to the organisation."
IT not seen as pathway to board governance
A related issue, how CIOs can take a step up and take a seat at the board table, was a question raised at another panel discussion at the conference. Vector chairman Michael Stiassny, who champions diversity on boards, advises: "You have to come to the table wearing different clothes."
He says IT executives are generally too detail-oriented, tactical and narrow in outlook, to make effective board members of large NZX-listed companies.
If CIOs and IT managers aspire to governance positions they should look for experience outside of the IT department, he says. He also suggested extra-curricular activities such as getting involved with charities and school boards as a way to broaden experience.
Sam Knowles, whose governance positions include chairing Xero and the Government ICT Council, says technical knowledge may be generational -- younger executives have a better IT knowledge -- but he urged CIOs to be more strategic in their outlook.
Beca CIO Robin Johansen says despite the "tsunami of change" taking place with the rise of cloud computing and the consumerisation of IT, CIOs are not articulating the strategic advantage they can bring to the company. "If you are not a great communicator, you are not going to cut it at the board table."
Johansen urged the audience -- many of whom spoke out about their lack of ability to be heard at the top -- to work on their "elevator pitch". The goal: to change the perception of IT as gloomy, detailed, boring and tactical.
The CIOs of tomorrow
The summit tackled the people issue impacting ICT organisations across the globe -- developing the IT teams -- and leaders -- for tomorrow.
A panel of ICT leaders -- Julia Raue, CIO of Air New Zealand; John Deane, CTO of PwC; Michael Myers, head of the information systems department at the University of Auckland; and Steve Maharey, vice chancellor at Massey University -- shared their insights on building a deep leadership bench.
"You can teach them skills, but you can't teach them a good attitude," says Raue. For Air New Zealand, Raue says there is a focus on building cohesive teams. "Poor attitudes that don't believe in the company values take out the whole team."
Once you have the right team, it is another battle keeping them. She says it is common for IT employees in top organisations to informally "trade" employees amongst each other, which gives organisations the skills they need for the immediate future, and the employees new work experiences.
"You need to build a path so if they ever wish to return they can, and in turn bring with them all that knowledge and a fresh perspective," says Raue.
The panel delves on the issue of diversity. John Deane says one-third of his team at PwC are women. A large number of them are in help desk roles, but in the procurement and admin areas the women outnumber men two to one.
He says more needs to be done earlier in supply chain, with better educational programmes targeting young women at tertiary institutions or before.
As the only woman on the panel, speaking to a room of mostly men, Raue confirms there was a major gender imbalance in the IT sector. She says this is a missed opportunity to better address customer needs and gleam insights that might otherwise have been missed. "Your customers are going to be a large diverse group of people. You want to have people who might bring different perspectives or ideas to the table to meet the expectations of your customers."
Her own path to IT was "accidental" she says. Working in a secretarial role at the Auckland City Council to support her education in law, Raue says she stumbled into sector by becoming familiar with the technology in her role and eventually moving into the IT department.
Raue says this serendipitous interaction with IT is not enough to attract more women into the industry, and a greater focus on evangelising IT careers to high school students is required. "Typically once you're in university you've carved out your path. It's almost too late to get them interested at this point," says Raue.
Graduates of traditional IT courses are being snapped up by large companies, or increasingly taking the skills learned in New Zealand overseas. In times of skills shortages, thinking outside the box is required.
Michael Myers says universities are creating programmes which teach IT and engineering students about business, and vice versa. Auckland's Spark scheme is one example, which sees dozens of entries each year with teams comprising of technology students and business students.
Steve Maharey advises seeking staff from other fields, as non-IT graduates can be taught skills on the job. "Don't get stuck thinking you need a strictly IT person for a role," he says. "Design students, for example, pick up significant IT experiences throughout their educational careers."
CIO Summit 2012 Speakers:
Owen McCall, director, Viewfield Consulting
Robin Johansen, CIO, Beca
Frank Gens, senior vice president and chief analyst, IDC
Paul Strong, CTO global field and customer initiatives, VMware
Rohan MacMahon, strategy director, Crown Fibre Holdings
Alan Hesketh, general manager group information services, Super Retail Group
Miles Fordyce, group technology manager, New Zealand Post Group
Ralph Chivers, CEO, Institute of Directors
Michael Stiassny, independent director
Sam Knowles, chairman, Xero
John Deane, CTO, PwC
Julia Raue, CIO, Air New Zealand
Hon. Steve Maharey, vice-chancellor, Massey University
Michael Myers, HOD, Department of Information Systems and Operations Management
Ron Hooton, CEO, ProCare Health
John Holley, general manager operations, Visible Results
Johan Vendrig, general manager information services, healthAlliance
Tim Campos, CIO, Facebook
Nigel Bailey, technology director, Fairfax NZ
Neil Cowie, CEO, Pumpkin Patch
Denise McDonagh, director of Home Office IT, UK Government
Winston Fong, vice president ICT, Fisher & Paykel Healthcare
Russell Jones, COO, ASB
Craig Columbus, CIO, Russell McVeagh
Alma Hong, CIO, New Zealand Fire Service
Steve Rubinow, CIO, FX Alliance
George Eby Mathew, digital media specialist, Infosys
Eran Feigenbaum, director enterprise security, Google
Bruce Tinsley, CIO, Opus International
Sim Ahmed (@simantics) is a reporter for CIO New Zealand.
Divina Paredes (@divinap) is editor of CIO New Zealand.