Whitepaper - The 5 I's of the CIO

The 5 ‘i’s of the CIO:A Different perspective on delivering success as a CIO

September 2013

What is a CIO?

Contents

Introduction .................................................................................................................................................................................................................................................................................................................................04Inspiration ..............................................................................................................................................................................................................................................................................................................................................06Impact .......................................................................................................................................................................................................................................................................................................................................................................08Information ......................................................................................................................................................................................................................................................................................................................................10Integration ...........................................................................................................................................................................................................................................................................................................................................12Individuals ............................................................................................................................................................................................................................................................................................................................................14Summary .....................................................................................................................................................................................................................................................................................................................................................16

Whav value does the CIO provide to the business?

The designation - Chief Information Officer is relatively new in business parlance, and the bottom line impact of the role continues to emerge. In contrast, Managing Director or Finance Director roles have existed for centuries and it is well established how they contribute to the bottom line. As an evolving discipline, precisely what impact does the CIO have on business performance? In some organizations the CIO is seen as a necessary evil; tasked with simply keeping servers and networks running or given a cost cutting role, striving to keep IT expenditure down. At worst, the

CIO may be considered a hindrance; creating policies that slow the pace of or prevent innovation. Sadly, many new CIOs arrive full of ideas but end up fire-fighting or being pigeonholed into only having domain to speak about deeply technical issues. This is unfortunate because the CIO role can provide unique value to a business. CIO value is about balancing competing priorities and determining how information systems and services can deliver on the core business strategy. So, in the CIO role, we aspire to look beyond technical delivery in achieving this balance.

CIOIS Staff

Architectu

res

Proce

sses

Budgets

Plans Programmes

IS Customers

Introduction

04 The 5 ‘i’s of the CIO: A Different perspective on delivering success as a CIO

Additionally, the 5 ‘i’s of the CIO define the principles on which to analyse and judge whether the traditional views of budgets, plans, architecture and processes are really focusing on business outcomes. Without this balance, it is very easy for just two perspectives to be considered – cost and delivery. Delivering projects to time and to budget may mean that although the IT/IS team is diligent and works extremely hard; it is not effectively supporting the business.

This white paper will be useful for CIOs looking to uncover how their portfolio of staff and resources is balanced and supports the business. It is also a resource for board members who interact with the CIO - to test how aligned the CIO is with their needs

How can the CIO add value to the business?What difference can a CIO make? As an analogy, consider a chef and a cook. An inspired chef will transform a restaurant. He or she will take somewhat ordinary raw ingredients and create a balanced menu of imaginative dishes that customers enjoy. Behind the scenes an impactful chef runs a kitchen efficiently and with exacting standards. Consistency in bringing dishes together, well-prepared and well-presented, is vital for the reputation of the whole restaurant. It is the food and customer experience that gets the good reviews.

A cook, by contrast, may be chosen by an hourly rate and specialization, to turn out a number of pre-defined dishes per shift, maximising throughput and minimising cost per dish. Consider eating fast food or airline food. It is safe. It is warm, and presented according to the rules and procedures – but it not Haute Cuisine.

Critical elements – is the CIO to act like a chef or a cook?How does the CIO become the chef and not a cook? The 5 ‘i’s of the CIO defines the balance and priorities that drive the behaviours which improve real business value. These elements are inspiration, impact, information, integration, and individuals. They provide the equivalent of the ‘balanced diet’ test for the CIO.

inspiration Define and drive a vision that motivates the IT/IS

team to make a dent in the universe.

impact Identify your critical value to stakeholders and deliver on it with quality and consistency.

information Create an indispensable information pipeline to business decision makers.

integration Construct a roadmap to take your best current IT and build on it to deliver the business benefits which support the strategic vision, mixing on-site service, outsourced services and the cloud.

individuals Engage stakeholders in a true two way conversation and measure your IT staff on the contribution they make to customer‘s goals.

The 5 day CIO challengeIn this whitepaper we will look at the 5 ‘i’s of the CIO in more detail and for each perspective provide a rapid, practical challenge that helps an organization to test how well it performs. At the end of the five days, you should have new insights into the current IS organization and ideas on how IS/IT can serve the business more effectively.

We make it happen. Better.

”I want to put a dent in the universe.”

Steve Jobs, CEO of Apple Inc

CIO Vision

Corporate Vision

Vision

Values Mission

Strategic Imperative

ArchitecturesDeployments

Plans Programs

Budgets Resources




Strategic Goal

Strategic Goal

Preformance Measure

Preformance Measure

Preformance Measure

Preformance Measure

Values Mission

Inspiration

Inspiration means having a clear vision, developing innovative thinking and providing the leadership which shows the IS/IT team how to make a dent in the universe of your business. A vision is a starting point, a rallying cry for drawing a team together that is linked to corporate goals. To be able to execute on a vision, a leader needs to create inspiration. This begins by having the charisma and communication skills to engage the team to follow a well-defined

plan based on a coherent strategy while maximizing the resources acquired and allocated. To close the loop, the team must be held accountable to achieve milestones via metrics based reporting – and rewarded accordingly. Giving your customers and staff a vision that shows how the CIO team will make a difference helps staff morale, bringing a team together to make that difference.


Day one challenge: Are business/IT strategies aligned?The first challenge is to test if there is a CIO vision and how it relates to the corporate vision. Begin by building a strategy articulation map of the CIO team and the corporate goals and then linking the two together. This tests if the vision is easy to explain, how it fits with the overall picture and if the strategic imperatives include innovative thinking by the CIO team.The diagram to the above shows the elements of a strategy articulation map.

■■ Vision - a one sentence ‘rallying cry’ - of what you strive to achieve.

■■ Values – what constitutes the foundation to achieving the vision?

■■ Mission - defines what you are doing and why.

■■ Strategic Goal and Performance Measures – what are the outcomes of the organization in achieving the vision and importantly, what are the performance measures that test whether goals are achieved?

■■ Strategic Imperative – what are the key projects/programs that help achieve the strategy.

If you don‘t already have a formal strategy articulation map, building one should be a group data gathering exercise (not a creation exercise for you). Compare corporate and CIO strategies by linking each of the CIO strategic goals and imperatives to the relevant corporate ones. Listing each element on post-it notes and linking them together helps a team see the big picture and the gaps. When the strategy articulation map is complete, there should be a clear thread from vision to strategy imperatives. It should be also be easy to articulate how the strategic imperatives help achieve the vision. Finally, there should now be a clear linkage between the CIO vision and the corporate strategic vision.

So what? Observation Consequence

■■ CIO vision not aligned to strategic imperatives.

■■ Team role is marginalized with IT treated as a cost centre.

■■ CIO strategic goals align to most corporate strategic goals.

■■ Possible to start calculating the business impact of IS/IT and looking for ways to create more value.

■■ Takes more than a day to find or agree on the CIO vision.

■■ Team goals unclear or poorly defined. Projects unlikely to be aligned to goals.

■■ Majority of CIO imperatives are in infrastructure.

■■ The Business is unlikely to see the value of the IT projects to their day to day work.

■■ Few measurable goals with metrics missing or qualitative in nature

■■ Difficult to demonstrate success. A performance measure assessment may help define the vital few CIO, team and personal measures within the CIO Vision.


“Grant me the serenity to accept the things I cannot change, courage to change the things I can, and the wisdom to know the difference.”

Reinhold Niebuhr

To have impact you must first be trusted.However before a CIO gets permission to influence their stakeholders, the CIO needs to be seen as a trusted steward of the IS/IT environment with the interests of internal customers at heart. Without that trust, their customers will try to limit the remit of the CIO, their involvement in decisions or the ability to advise on requirements and

Impact

InformationServices

Business‘buyer’s

AdvancedTechnology IS Strategy

Consultants Roll out teamsSupplierManagement IS Architecture

Business Teams UsersProject

RequirementsProject

Development

Finance IT Financial Controller IT HR Specialist

HardwareSuppliers Security Quality

AssuranceTech.

StandardsThe Board

of directors

TelecomsSuppliers Auditors External

IT Suppliers‘Secret’ IT

Teams Shareholders

ApplicationsSuppliers

Suppliers CustomersCIO Team

Influencers, Regulators, Competitors

RelationshipManagement

Project Training

Project Support

Special Projects

options. In the extreme, internal customers will look elsewhere for information services needs to be met, including using cloud services. To be able to truly impact their stakeholders, the CIO needs to know who they are, what makes them tick and to check that the IS/IT team are delivering the outputs that corporate stakeholders perceive as useful and valuable.


Day two challenge: are stakeholders getting outputs from the CIO that they value?This challenge is designed to understand the stakeholders of the CIO and their needs. This will determine the level of CIO influence as defined by the outputs they value. The final step is to test if the stakeholders are getting what they need.

The business interaction model, above, provides a useful single diagram on which to capture suppliers, customers and other major stakeholders of a department, the outputs that matter and the relationships between teams. For those familiar with Six-sigma improvement, this is contains similar information to a ‘SIPOC’ diagram. It will help a team distil the key outputs from the many interactions they have with stakeholders. Furthermore, where each output crosses a boundary, it indicates a quality assurance or performance measurement point.

Building a business interaction model with a team, including customers, often starts with the assumption that it will take just a few minutes. However, it often can take a couple of hours, as people‘s implicit assumptions are tested and each member of the team sees how they fit into the whole picture.


■■ Not all stakeholders linked to CIO Team. ■■ Are their expectations not being met?

■■ Why are they a stakeholder?

■■ Performance Measures do not exist for each link that crosses a boundary.

■■ Difficult to demonstrate success – hearsay will drive perceptions.

■■ Does the output from the CIO Team match the expected deliverable to each stakeholder?

■■ The stakeholder is not getting what s/he values and CIO team perceived as not delivering.

■■ The deliverables between stakeholders do not match performance measures or strategic imperatives in the vision.

■■ The CIO Vision or the strategic vision will not be achieved so even though the CIO team is working hard they are not moving the business forward.

■■ Does the CIO team spend sufficient time on the deliverables to external stakeholders compared to other work in the team?

■■ Non value-add work is taking precedence and team should look at ways of simplifying, automating or eliminating it.

■■ CIO Team only contains technical roles. ■■ The work required for performance monitoring, business benefits, user adoption, and communication may be missing, which means the value of the technical work is invisible.


Information is the key element of the Chief Information Officer role, so why is it third on the list of the 5 ‘i’s?

Without knowing why you need it (inspiration) and who needs it (influence) it is difficult to know what information is required for decisions.

However, companies spend millions of pounds managing assets like people, buildings, money and stock. Yet there remains an asset that is poorly managed and uncontrolled – information. Information supports every aspect of managing and running a business: decision making, selling, service and support. The art of information systems involves merging of personal knowledge, business intelligence, corporate performance management and knowledge management - together right at the point in time it is needed – information agility.

While there are systems, policies and procedures in place for managing other assets, information is rarely treated with the same rigour, permitting individual approaches to managing a corporate asset. As a result few businesses have an accurate idea of what information they have or where it is; without such understanding information cannot be used properly or its value exploited. Managing this asset properly also mitigates against risks – of data loss, competitive failure, and ill-informed decisions. Through pro-active management of information an organisation can demonstrate the confidentiality, integrity and security of its information – information assurance.

This information exists in structured (corporate databases) and unstructured (in people‘s heads, or documents) forms. Yet, many organizations spend most of their investment on the structured data. The challenge is providing access to the information that people need to make a decision when they make decisions. Often for businesses, the issue is not whether the information exists or not, but if the information is available in a digestible form from which someone can quickly make a useful decision.

Day three challenge: Does the business have the information to make the decisions that count?The challenge here is huge - and a project in itself. However a starting point is to look at one of 3 perspectives and then explore the governance, decisions and information required. This is a subset of the Hitachi Management Control and Reporting System (MCRS TM).

For this challenge you could take the governance of the IT department, the governance of a business function (like HR), or the informtion required for a customer to choose and work with your organisation.

Look at the range of meetings that the IT department and IT projects have and how they link from forecasting, planning, control and report, the reporting and decisions that happen in each meeting.

Information

“True genius resides in the capacity for evaluation of uncertain, hazardous, and conflicting information.”

Winston Churchill


Example Decision Analysis

Example Decision AnalysisThis challenge tests if both structured and unstructured information is being managed in the business. It tests if the team really understands how IS/IT solutions are being used, and helps test if the


■■ Deciding on what are the key decisions in the business and determining the information needed to support them was difficult.

■■ IT needs to understand the business process better. Shadowing on the ‘shop floor’ and building a picture of ‘the day in the life‘ of the business will demonstrate IS/IT listening to how the business runs. This will serve to identify both quick and longer term improvement opportunities.

■■ The only information described is around structured data (databases).

■■ IS/IT is pigeonholed to find and advise on technical answers when other options have been exhausted. The opportunity to show IS/IT as a trusted and valuable business advisor is lost.

■■ The is a huge overlap of meetings and reporting.

■■ Getting the governance and decision making process right first is key before then deciding the information required by the business.

Offer MortgageDecision

Will we offer the customer a mortgage?

Value of the decision to the business■■ Cost / Revenue of correct / incorrect decision making■■ Corporate goals/measures it supports■■ Speed to make decision■■ Quality of decision making – percentage ‘correct’■■ What-if impact of better information, speed, quality.

Information Required for decision■■ Structured Data - “Business Intelligence”■■ Unstructured Data – “Knowledge Management■■ Source of data, quality and completeness

Recommendations to improve decisions■■ People and culture■■ Process and information■■ Technology

Decision


Integration has a reputation for being complex, expensive time consuming, whether it is integrating:

■■ IT and the core business

■■ Legacy systems with new ways of working

■■ New systems into existing processes,

■■ Acquisitions and divestitures, or

■■ Suppliers – in-house, outsourced, off-shore and ‘cloud’ delivery.

However, integration can make significant step improvements in business operations and create competitive advantage. Coming out of the recessions many companies with merge, or divest business units, and restructure their groups of alliances. So, in deciding how to integrate, it is vital that the CIO continually balances business outcomes with the enterprise architecture/technology roadmap and with the program plan. The vision and business benefits provide the priorities for the integration roadmap.

Realistically, very few organizations have the luxury of building an information environment from scratch. So the CIO needs to get the best out of existing infrastructures whilst integrating in areas with the biggest benefit to the business. Developing a map of enterprise architectures can pinpoint where to make those decisions, but should be treated as a tool to make decisions and not the means in and of itself. However one productive way of building enterprise architecture is to build it as a by-product of gained knowledge from each project

DAY FOUR CHALLENGE: DO YOU HAVE A ROADMAP TO DELIVER BUSINESS BENEFIT?As a rapid, one day challenge, there are two quick diagnostics that you can run with the team to test the status and attitude of integration.

The first is looking at ‘global versus l ocal‘. For most organizations there is a central IS function, but there are local offices, factories, shops, or agents to deliver the business. One part of gaining integration and agility is to balance the delivery of centralized services, whilst giving local teams the autonomy to flex to their market needs.

Integration

Datacenters

Helpdesk Interfacing

Finance

CRM

Sales &Marketing

Training

HR Benefits

Payroll

Security

Systems & ServicesImplementedCentrally

defin

ed ce

ntra

llyde

fined

loca

lly

ImplementedLocally

Polic

ies &

Par

amet

ers

Manu-facturing

HumanResources

SupplyChain

Balancing Local and Central IS Services


For example, each country in the world has local Human Resources laws and benefits – so flexibility in local markets is vital to attract the best talent, but having a centralized HR system allows simplified global visibility. The Central versus Local chart allows a quick view of whether there are opportunities for economies of scale, or too much centralized control preventing agility at the local level.

A second benefit to the ‘global vs local’ decision model is to consider the source of these solutions – be they in-house, outsourced, off-shore or in the cloud. The delivery mechanism helps balance the agility to deliver business benefit with consistency of delivery. A ‘cloud’ based answer may provide agility to deliver certain functions irrespective of location, with clear scalable costs, but for a highly competitive solution, an in-house delivered team may provide the flexibility and agility to be first to market with changes.

The second diagnostic is to look at the project and service delivery plan over the next few years and match IS/IT delivery against delivering the business goals. A good benchmark is that even if projects take more than 3 months to deliver, there is at least one business benefit delivered every three months. If not, IS/IT can be perceived as not delivering value, or agility for the organization.


■■ IT project plans contain technical delivery alone.

■■ The business benefit is not obvious and the business may not be bought into delivering allied people and process change

■■ Benefits based deliveries are not being delivered every 3 or 6 months.

■■ The business may not see the value of IS/IT being regularly delivered.

■■ The benefits don’t link explicitly to each of the CIO and/or the corporate strategy maps.

■■ The CIO vision and the corporate strategy are unlikely to be delivered. It‘s important to balance urgent with important.

■■ The list and status of IS/IT projects is difficult to find and hard work to collate.

■■ IS/IT program is not sufficiently coordinated raising the risk of unexpected knock-on effects or focusing only on ‘noisy’ projects rather than important ones.

Months Outputs

0-3 4-6 7-9 9-12

Corporate Goals

CIO Goals

Business Benefits

Project Delivery

➜➜


In team sports, many coaches are fond of telling their players that ―there is no ‘i’ in team, but without a doubt all teams are made up of individuals. The preceding ‘i’s of the CIO are worthless - just theory, unless the CIO engages with all its stakeholders and treats them as individuals. This focus on individuals affects staff and customer retention. It provides feedback for continuous improvement and enhances the reputation of the business both as a place to work and an entity to do business with.

Often the hardest part of the role of the CIO is creating a culture of success, coordinating the people to deliver success, and communicating that success. A CIO can set behavioural patterns through communication, performance measures, knowledge management and growing the competencies of the team‘s individuals. Thus it is allied to the implementation of the other ‘i’s; inspiring the individual, creating impact for success, having the information for them to do their job, and integrating their work into the benefits plan.

Day five challenge: are you having a productive dialogue with your people?A starting point for looking at the individual is testing whether the CIO team is communicating successfully to different stakeholders. For example, if your leavers are not giving you improvement ideas, how can you manage staff retention? If your staffs aren‘t sharing best practices within your team, are you becoming a hostage to fortune of key staff? As an exercise, build a communication map similar to the one opposite, and for each cell add the communication method and frequency. For example, communication of goals quarterly to the IS/IT staff through a team building and lessons learnt session.

A key component of dialogue is to capture the feedback mechanism. Communication is not point if it is one way, as there will be no way if the message has been received or if the desired message has been received.

Individuals



■■ IS/IT staff have gaps in the grid. ■■ Potentially higher staff turnover or growing demands for higher compensation due to a lack of ‘feeling valued‘.

■■ Communication channels are only one way or do not visibly act on feedback.

■■ IS/IT seen as uncooperative and unresponsive with the added risk of potential improvement ideas lost.

■■ Complaints/Failures/Improvement ideas are not acted upon.

■■ Potential knock-on impact to customers. IS/IT see as unresponsive and not a business partner.

■■ Your goals and their goals are not regularly communicated.

■■ IS/IT may not be responsive to the changing business environment, and your stakeholders don’t know what IS/IT is trying to achieve.

Example Communications Plan

Your Goals

Key Message

Key Message IS/IT Staff Business

buyersRollout teams Users Users

Their Goals

Successes / Results

Complaints / Failures

Best Practices

How to do the job.

Competitor Comparisons


Completing the five day challenge will give you a better idea how the IS/IT community in an organization helps delivery business benefit. For some organizations the answer for each challenge should be an existing document that people believe in and work to. For others, when they come to the end of the five day challenge, they may not have completed any of the challenges and created more discussion than output. Both scenarios are a positive end to the challenge. Both results illuminate where to spend more time in creating balance and where to demonstrate business value.

Following on from the five day challenge for the cioThe five ‘i‘s give a different perspective to the CIO‘s role. The table below provides ideas for actions against each of the five ‘i‘s in terms of work that could be done in days, or in 6-8 weeks or a project which can significantly transform the business. Hitachi Consulting helps clients with facilitating the 5 day challenge and assisting in follow up work

Summary


Business Value Immediate Actions Example Follow-on Projects

inspiration ■■ Improved reputation

■■ Top line growth

■■ Staff retention

■■ Better delivery of strategy

■■ Assess if the team have a vision they believe in.

■■ Test if IS/IT program, products, services align to the business goals and identify any gaps.

■■ IT Operational Effectiveness

■■ Cultural Change Management

■■ Refine a programme portfolio as a benefits delivery portfolio.

impact ■■ Increased trust in IS/IT and the organisation

■■ Improved reputation

■■ Improved business/IT alignment

■■ Improved customer service

■■ Use the business interaction model to ensure IS/IT is delivering the outputs its customer’s value.

■■ Check that sufficient effort and quality is put into the customer outputs of IS/IT.

■■ Create a Stakeholder Management Plan and Communications Plan.

■■ Develop a Customer Relationship Strategy.

■■ Optimise existing IS functionality/ spend.

■■ Improve customer adoption.

information ■■ Improved decision making

■■ Competitive advantage

■■ Customer retention

■■ Better regulatory

■■ Compliance

■■ Top line growth

■■ Identify ways to improve the value adding decision making processes in the business – help deliver quick wins.

■■ Understand the impact of IS projects and services on the corporate performance measures.

■■ Corporate Performance Management Assessment.

■■ Perform a Knowledge & Information audit.

■■ Business Intelligence / Performance

■■ Management

■■ Enterprise Data Warehousing

integration ■■ Speedier processes

■■ Reduced duplication

■■ Reduced costs

■■ Continuous improvement

■■ Ensure that the program portfolio links directly to business goals, performance measures and benefits.

■■ Identify ways to bring structured and unstructured data together for decisions.

■■ Strategic Information Systems planning.

■■ Service Oriented Architecture (SOA) strategy.

■■ Cloud Strategy

■■ Architectural Roadmap

■■ Straight through processing.

■■ Business Process Management

individuals ■■ Top line growth

■■ Cost reduction

■■ Staff retention

■■ Understanding who are the real heroes in the IS/IT team and reward behaviour that supports the CIO/ Corporate strategy.

■■ Workforce improvement plan

■■ Organisation Effectiveness review.

■■ Incentive alignment Workforce Analytics.

■■ Personal Performance management and career planning.


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Hitachi Consulting is the business consulting capability of Hitachi, Ltd., a global technology leader and a catalyst of societal change. In that same spirit-and building on its technology heritage-Hitachi Consulting is a catalyst of positive business change, propelling companies ahead by enabling superior operational performance. Working within their existing processes and focusing on targeted functional challenges, we help our clients respond to dynamic global change with insight and agility. Our unique approach-‘strategic pragmatism’- produces consistent, measurable business results and delivers an exceptional consulting experience.

UK Head Office2 More London Riverside, London, SE1 2APTel +44 (0)20 7947 4500Fax +44 (0)20 7947 4510

www.hitachiconsulting.co.uk

Whitepaper - The 5 I's of the CIO

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