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September 25, 2009
Before you get your feather ruffled over this topic, let me explain what I decided to post it. During the last four years, I have interviewed 100s of global CIOs for both www.enterpriseleadership.org and www.btmexchange.org. I continue to find more older  laid off CIOs who are in transition, as they all it. . It took one CIO almost two years to find a position.  I recently interviewed a CIO from a major insurance company who promotes an open email dialogue with him. Most of his email is about what to do with IT professionals who have been with the company 20 years or 30 years. He has found that young IT professionals will take the initiative to learn new things on their own. On the other, older IT professionals did to be told what they should learn. So..what do you think -- Elizabeth Ferrarini -- www.enterpriseleadership.org
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During the past for years, I have interviewed many global CIOs are the challenges they face today. I would like to ask people, how they think the CIO role might be different 10 years from now.
Elizabeth M. Ferrarini -- www.enterpriseleadership.org
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Does your IT organization have what it takes to create business impact? Delivering the business impact of IT means running IT as a true business that considers value creation and makes growth opportunities happen. In a podcast with www.enterpriseleadership.org, Hank Leingang, the former global CIO with the Betchel Group, says achieving business impact means that the IT organization has evolved through five graduated stages:

  • ensuring a stable applications portfolio,
  • developing automated support for processes and functions,
  • carrying out an ERP implementation,
  • enabling a business transformation,
    and delivering business products and services developed by IT or that containing IT components.

 

At Betchel, Leingang transformed a highly disjointed IT group into a highly coordinated service function that delivered products and services to 13 business lines around the world. His team stabilized the infrastructure and the core applications that enabled the company's delivery capabilities. His team also enabled Betchel’s employees to operate as a virtual team wherever they were in the world. He says, “The business moved from a little understanding of IT’s role to a clearer understanding about all of the products and services we delivered to the organization. Senior management also knew not only the full inventory of services and cost drivers, as well as the strategic and operational impact IT provides. We moved from being a purely technology group to running IT as a business. We identified new revenue opportunities for new products and services.”

 

Before companies can achieve business impact of IT, CIOs, working with senior management, need to fix what’s broken – be they processes or systems, according to Jeanne M. Ross, director for MIT Sloan’s Center for Information Systems Research (CISR). In her new book, IT Savvy, co-written with CISR Chairman Peter Weill, she points to two major steps companies need to take before IT can even be considered a strategic asset – undergo an IT transformation and adoption of an operating model for IT. That’s exactly the two tasks that Jack Bergstrand carried out when he was vice president of business systems at Coca Cola. (Source www.enterpriseleadership.org)

 

During Bergstrand’s 25-year career with The Coca Cola Company, he gained much operational and strategic experience running everything from manufacturing to marketing to IT. Bergstrand spearheaded a business transformation to overhaul the company's global IT operations, including data standards, enterprise-wide global systems initiatives, and restructuring of reporting functions. He put in place a standard operating model which included the global rollout of a single SAP solution. The rollout included the concentrate division, all manufacturing facilities, and an overall accounting backbone. He says that the project provided the needed discipline or foundation for achieving business impact. "It also established a single platform for assessing global information which dramatically improved the company's transparency.  This single source of the truth enabled people to make better, faster, and consistent decisions. Over time, the project helped the company benefit from global economies of scale, such as shared services, and better handle growth, through acquisitions or internal efforts.”  Bergstrand went on to run the entire global IT operation. He retired from Coca Cola several years ago to start his own consulting firm.

 

Okay, so what does the business impact of IT mean to you?  How have you achieved it? What challenges have you faced in trying to create it?

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So, what kind of IT leaders are companies looking for at this time? We put this question to Shawn, Banerji,  managing director of Russell Reynolds Associates' global technology sector. His firm is one of the oldest executive search firms specializing in recruiting CIOs for clients such as General Motors, Hewlett-Packard, and Toyota.He says, "We have done several hundred CIO searches. In 1996, we recruited Ralph Szygenda away from Bell Atlantic to become global CIO of General Motors."

Here’s what Banerji had to say about the IT leaders his clients would like to hire.  Do you agree with him or not?

“Companies are looking to turn people over and go after transformational leaders who can demonstrate the business impact of IT. Companies don't want IT managers of the status quo. For example, CIOs have historically measured themselves by two primary criteria: head count and budget. How many people work for me and how many dollars do I control? Those metrics determined the importance of the CIO's role and contribution to the company. Companies have turned this around by creating a new paradigm of the business information officer. This individual aligns better with the commercial interests of the business. This individual focuses on governance, as well as operational efficiency, and knows how to drive that kind of change in a meaningful, substantive measure. That individual does not look at headcount, but focuses on business contribution. He or she looks at their role in setting the company's governance policy. Creating business value by leveraging existing resources is another key area for a transformational leader focuses. How do I do a better job of selecting and managing key vendors? How do I free myself up from running the daily operational aspect of IT and contribute more to the senior leadership teams?  A transformational leader strives to answer these questions."
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If you read the computer trade press, you’d get the impression that cloud computing is the next killer app. “Not so,” says Dr. Jeanne W. Ross, principal researcher at MIT Sloan’s Center for Information Systems Research. Speaking at the recent MIT Sloan 2009 CIO Symposium, Ross said that “major companies have to clean up their infrastructure before they can take advantage of cloud computing.” She added that cloud computing makes sense for emerging companies that will need to scale in a hurry.

Ross should take a look at what’s happening at Brady Corporation, a $500 million manufacturer and marketer of a comprehensive line of identity and protection products, including labels, signs, safety devices, and printing systems. In a recent www.enterpriseleadership.org interview, Frank M. Jaehnert, Brady’s president and CEO, described some of his company’s key cloud computing investments.
We also came across an interesting cloud computing application at the Brain & Spine Institute at Sacred Heart Hospital in Wisconsin. Dr. Kamal Thapar, a neurosurgeon and the Institute’s director, is using the country’s first SmartOR, which is based on cloud computing technology.

For a good discussion about cloud computing, listen to our podcast with Dr. Kishore Swaminathan, chief scientist for Accenture. He defines cloud computing as the sourcing of some capability from somewhere out there, typically through the Internet, and you, as a user, neither know nor care where this capability is coming from. The four types of cloud computing include software clouds, such as software as a service; hardware clouds, such as data backup; desktop clouds, such as Google applications, and business process clouds, such as PayPal. Swaminathan said he isn't sure where cloud computing is going because of the unresolved issues in areas such as data security and performance.

Talk to us: Anyway, we would like to hear if you have plans to move your applications to cloud-based services? If not, why? Please send me links to any interesting cloud computing applications – enterpriseleadership@gmail.com.

Elizabeth Ferrarini – enterpriseleadership@gmail.com
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Nicholas Carr’s, IT Doesn’t Matter, in Harvard Business Review (May 2003) sent IT executives everywhere whirling around in their mesh swivel chairs. It caused academics to do some hard thinking and computer vendors to rally in front of their computers. Because of that article and Carr’s follow-on book, Does IT Matter?, I started asking the CIOs, academics, and management consultants that I interviewed for www.enterpriseleadership.org if the CIO role could be a rotational one. I anticipated the much mixed results I received.

Ben Salzmann, the CEO of Acuity, a property and casualty insurer, said that he wouldn’t like having a CIO de jour. As his company’s former CIO, Salzmann speaks from first-hand experience. He said that this type of model is an extreme belittlement of the technology deployed in his organization. On the other hand, he said he wouldn’t mind if his competitors went this route.

Jerry McElhatton, who retired as CIO from MasterCard several years ago, said that some companies might be better off if they went in that direction. Meanwhile, Mark Lutchen, who runs PricewaterhouseCooper’s IT Effectiveness Practice, said that it’s a good idea, but has some shortcomings. “It might be difficult to round out the finance or human resources skills of CIOs who have grown up in IT. In many cases, a CIO might have a CFO of IT. A CIO might want to rotate to other areas, such as running a business unit, in order to gain skills and build relationships.” BTW, Lutchen was a global CIO for PWC and wrote the book, Managing IT as a Business – A Survival Guide for CEOs.

Eventually I rephrased the question to ask, “Tell me how a rotational assignment helped you become an effective CIO.” That’s when I started to hear much compelling stuff about what has made some CIOs successful on the job. For example, Paul Heller, Vanguard Group’s CIO, had many different rotational assignments at this investment firm before he became CIO in 2007. Two of his rotational assignments included running the retail side of the house and applications. He says, “We believe in rotating people throughout our business, including IT. If you have a broad general understanding, then you’re likely to have success in what you do.”

Meanwhile, McElhatton said that his rotational assignment running the process change team at MasterCard helped him to grow closer to the business units.

At companies like Toyota Motors Sales USA, job rotation throughout functional areas is quite common. In fact, Zackery Hicks, former corporate manager for the Office of the CIO at Toyota, started out in Toyota’s corporate services group. Because of his IT experience in a previous position, he was able to move into IT. Hicks said that people have to demonstrate the talent to move to another functional area, as well as to have the desire to do so.

I could go on about executives who have had successful job rotation assignments. Ed Kamins, who retired in February 2009 from a compelling career with Avnet, the $14 billion electronics distributor, tops my list. I interviewed Kamins in 2005 when he was CIO. He had previously been Avnet’s senior vice president of business development. When Steve Phillips became CIO in 2007, Kamins moved up as senior vice president and chief of operational excellence. Kamins’ team focused on lowering costs, cutting cycle times, improving customer service, and refining operational efficiencies. Did I also mention that Phillips reported to Kamins!

Now I’d like to ask you a few questions:

“Tell me about some rotational assignments that have helped you prepare to become a CIO?

What types of rotational assignments or rotational programs are available for IT professionals at your organization?”

By - Elizabeth M. Ferrarini -- enterpriseleadership@yahoo.com
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