Byron Bennett
Jason Godefroid
Byron Bennett
Jason Godefroid
What is the CIO’s Role?
Gartner Group’s definition of the role of the CIO
To “provide technology vision and leadership for
developing and implementing IT initiatives
that create and maintain leadership for the
enterprise in a constantly changing and
intensely competitive marketplace.”
Source: Grupe, Fritz H., Simon Joost, and Nilesh Patel, “Passing the Baton: Helping Your Successor to Succeed.”
Information Systems Management, Spring 2003, p. 19.
3
What is the CIO’s Role?
As IT leaders, CIOs
• Devise and manage organizational arrangements to meet business needs
• Set goals and direction
• Influence perception of IT’s role and business value in an organization
• Establish relationship between business and IT at the executive level, help
achieve “shared vision”
Source: Lacity, Mary C and Leslie P. Wilcocks, Global Information Technology Outsourcing: In Search for Business
Advantage, John Wiley & Sons, Chichester, 2001, pp 252-253.
4
Evolution of the CIO
1960s
• Director of Data Processing
• Technical
• Automating back-office functions
• Little to no power, basement office (desk)
1970s
• Management Information Systems (MIS) Director
• Minicomputers appearing in more departments, network mainframes
• MIS Director starting to gain some power
1980s
• Chief Information Officer
• Proliferation of the PC, “Control the chaos”
• Companies saw the benefits of computer technology
• CIO starting to be viewed as a valuable, high-level executive
Source: Melymuka, Kathleen, “35 Years of IT Leadership: The Evoluton of the IT Leader.” Computerworld, Sep 30,
2002. Vol. 36, Iss. 40; pg. 28.
5
Evolution of the CIO
1990s to today
• Client/server applications instead of mainframe, costs begin to rise
• CIO’s role as planner, architect, and budget manager reinforced
• Focus on “strategic plans, strategic architecture, networking, competitors and partners”
1960s
Today
DP Director
CIO (or some C-title)
Support player
Senior Executive
View of IT as internal
View of IT aligned with business’
world view
“Geek among propeller heads”
Speaks business to business leaders
Source: Melymuka, Kathleen, “35 Years of IT Leadership: The Evoluton of the IT Leader.” Computerworld, Sep 30,
2002. Vol. 36, Iss. 40; pg. 28.
6
Common CIO Titles
•
In the CIO survey, 73% of respondents had Chief-level titles, 35% had solely CIO
titles.
CIO
36%
Other, 26%
Chief Technology
Officer
5%
CIO & Executive
Vice President, 1%
CIO & Vice
President
17%
CIO & Senior Vice
President
15%
Source: Cosgrove Ware, Lorraine, “What You Have to Say – Survey Results.” CIO Magazine, Apr 1, 2003,
www.cio.com/archive/040103/results.html, viewed October 1, 2003.
7
To Whom Do CIOs Report?
•
In the CIO survey, 47% of respondents report directly to the CEO
Other, 15%
COO, 8%
CEO, 47%
Corporate CIO, 7%
CFO, 22%
Source: Cosgrove Ware, Lorraine, “What You Have to Say – Survey Results.” CIO Magazine, Apr 1, 2003,
www.cio.com/archive/040103/results.html, viewed October 1, 2003.
8
How Do CIOs Spend Their Days?
•
Time allocation per day
Other, 37%
Developing
leadership
within
department,
13%
Meeting
with senior
executives
and
department
heads, 26%
Managing
staff, 24%
Source: Cosgrove Ware, Lorraine, “What You Have to Say – Survey Results.” CIO Magazine, Apr 1, 2003,
www.cio.com/archive/040103/results.html, viewed October 1, 2003.
9
Budgets and Staff
•
2002 survey of IT leaders, 388 respondents
IT Budget as Percent of Total Revenue
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
< 100M
$100M - $500M-$999M $1B-$4.9B
$499M
$5B-$10B
Source: “Here’s Looking at You: Demographics of the 2002 ‘State of the CIO’ Survey,” CIO Magazine, Mar 1, 2002,
www.cio.com/archive/030102/demographics.html, viewed October 20, 2003.
10
Budgets and Staff
•
2002 survey of IT leaders, 469 respondents
Average users:
5,348
Average IT staff:
78
Average % of users: 1.5%
Source: “Here’s Looking at You: Demographics of the 2002 ‘State of the CIO’ Survey,” CIO Magazine, Mar 1, 2002,
www.cio.com/archive/030103/demographics.html, viewed October 20, 2003.
11
Top Priorities of Today’s CIOs
•
According to recent Gartner survey of 620 CIOs and IT executives, the top priorities
of today’s CIOs are:
Providing IT guidance to
senior corporate executives
Demonstrating the business
value of IT
Improving the internal
governance of IT operations
Taking steps to reduce IT
costs
Developing or outsourcing
corporate IT architectures
Source: Hoffman, Thomas, “Gartner survey finds continued CIO focus on cutting costs,” Computerworld, Mar 17, 2003, p. 13.
12
CIO Gender Statistics
1
2002
Female
9%
2
2003
Male
91%
Female
13%
N: 500
Male
87%
N: 539
Sources:
1. “The 2002 State of the CIO. ‘Here’s Looking at You’.” CIO.com. As viewed on October 26, 2003.
< www.cio.com/archive/030102/demographics.html >
2. Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html >
13
IT Gender Gap Widens
Overall IT Gender Gap Widening Again
Of all IT executives over age 40, female executives account for 16.4%. Only
7.8% of IT leaders under age 40 are female.
Factors Attributing to Decrease in Female IT Leaders
• Economic downturn.
• Fewer young women choosing IT careers - 41% in 1996, 34.9% in 2002.
• Significant numbers of women exiting corporations to start own businesses.
Now account for nearly 50% of privately owned US businesses.
14
Source: D’Agostino, Debra. “Where are All the Women IT Leaders?” CIO Insight. October 1, 2003. Website as view on October 26, 2003.
< http://www.cioinsight.com/article2/0,3959,1309515,00.asp >
Professional Experience
Influential Jobs Held During Career
Other
12%
Sales
11%
Logistics
11%
Marketing
12%
Production
13%
Finance
14%
Accounting
15%
Customer Service
17%
R&D
17%
Engineering
20%
Administration
25%
Consulting
34%
IT
N: 539
82%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
15
Source: Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html >
Position Held before CIO
C onsultant
16%
Business
Manager
21%
IT Manager
63%
16
Source: “The Role of the CIO.” CIOInsight.com. February, 2003. As viewed on October 30, 2003
<http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >
Tenure as CIO
•
Average time as CIO: 4 years, 9 months
Tenure as Head of IT
> 10 Years
Between 5 and 10
Between 2 and 5
< 2 Years
0%
10%
20%
30%
40%
50%
17
Source: Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html >
CIO Compensation
1
Compensation by Industry
Government
• Average CIO Total
Compensation:
$167,242 N: 279
$120,437
Education
$126,172
Manufacturing
$176,769
Medical/health care
$201,786
Computer-related
$209,574
Finance
$220,833
Insurance
N: 539
2
$223,897
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Economy Hits IT Compensation 3
InformationWeek found that the economic downturn reduced
compensation for IT managers by 8% and by 11% for IT staff in 2002.
Sources:
•
Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html >
2.
“The Role of the CIO.” CIOInsight.com. February, 2003. 1. As viewed on October 30, 2003.
< http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >
3.
George, Tischelle, Eileen Colkin, and Larry Greenemeier. “Big Bucks Dry Up.” InformationWeek.com. April 29, 2002.
<http://www.informationweek.com/story/showArticle.jhtml?articleID=6501877>
18
CIO Skills & Personality
Technical Skills vs. People Skills
•
In their study, Enns, Huff, and Golden challenge the conventional wisdom of
organizational socialization theory that predicts significant differences in
the influencing behaviors used by less technical and more technical CIOs.1
•
By narrow margins, Enns found the following behavioral patterns:
– Lesser technical CIOs use “hard” influencing behaviors: coalition, legitimization,
pressure (Greater technical CIOs use the hard behavior: exchange.)
– Greater technical CIOs use “soft” influencing behaviors: consultation, inspirational
appeal, personal appeal (Lesser technical CIOs use the soft behavior: ingratiation.)
60% of CIOs at large companies are EXTROVERTS!2
WHY?
Enns offers possible reason: “…top executives may not rise to the top
without having the ability to utilize influence behaviors.”
Sources:
1. Enns, Harvey G., Sid L. Huff, and Brian R. Golden. How CIOs Obtain Peer Commitment to Strategic IS Proposals: Barriers & Facilitators.
(2000): 6-7. < http://www.sba.udayton.edu/cio_influence/CIO Tech Back IBs-2.pdf >
2. “The Role of the CIO.” CIOInsight.com. February, 2003. 2. As viewed on October 30, 2003.
< http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >
19
CIOs Take the Personality Test
MYERS-BRIGGS: CIO DISTRIBUTION
30.0%
25.8%
25.0%
Extrovert/Introvert
Sensing/Intuition
Judging/Perceiving
Thinking/Feeling
20.0%
11.3%
Source: “The Role of the CIO.” CIOInsight.com. February, 2003. 2. As viewed on October 30, 2003.
< http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >
4.8%
P
IS
T
J
T
FP
IS
IN
T
FJ
1.6%
0.0%
J
IN
T
IN
FP
IN
FJ
P
T
T
J
ES
ES
FJ
ES
P
J
EN
T
EN
T
EN
FP
0.0%
ES
1.6%
FP
5.0%
EN
FJ
6.5%
4.8%
3.2%
3.2%
1.6%
1.6%
0.0%
IS
9.7%
10.0%
11.3%
IS
12.9%
P
15.0%
20
Factors in Attaining Peer Commitment
Enns, Huff, and Golden’s study on how CIOs attain peer commitment
for IT projects revealed key factors that CIOs must manage: 1
• Environment:
– Industry - information reliant (e.g. Finance) vs. material product based
(e.g. Petroleum)
– Vision for IT - IT as Cost Center vs. IT as Transformer
– Centralization - centralized vs. decentralized
• Consistency of Proposals with business strategy
• Peer relationships - effective relationships
– Educate peers about strategic value of IT (consultation behavior)
– Build relationships, partnerships, and networks
Financial services CIO: “. . . IT was considered a cost center. However, due to my
relationships with others in the organization, and my track record of delivering on
projects, IT is now considered an Investment Center.”
21
Source: Enns, Harvey G., Sid L. Huff, and Brian R. Golden. How CIOs Obtain Peer Commitment to Strategic IS Proposals: Barriers & Facilitators.
(2000): 6-7. < http://www.sba.udayton.edu/cio_influence/Barriers and Facilitators.pdf >
Factors in Attaining Peer Commitment
• Peer Background Accommodation
– Speaking the peer’s language - non-technical vs. technical
– Consultation (seeking peers participation) - peers with tech background:
resistance; peers with lesser tech background: commitment.
• Reason - technical peers view consultation as sign that CIO is unprepared.
– Ingratiation - peers with tech background: resistance; peers with lesser tech
background: commitment.
• Reason - technical peers seek the rationale and content of proposals. Other behavior
is viewed as superfluous and irritating.
•
Implementation: Keys for Success
– Top-Down support - managers at top tier support project and ensure their
subordinates actively support the project.
– Stakeholder support - critical that project has support of stakeholders.
CIO’s peer: “The CIO is driven into seclusion if (his/her) focus is just the technology. You
are at risk because a technology focus is not where the business units reside.”
22
Source: Enns, Harvey G., Sid L. Huff, and Brian R. Golden. How CIOs Obtain Peer Commitment to Strategic IS Proposals: Barriers & Facilitators.
(2000): 6-7. < http://www.sba.udayton.edu/cio_influence/Barriers and Facilitators.pdf >
CIOs Rank Skills for Success
Skills for CIO Success
Personal integrity
8.0%
Problem solving
14.7%
Technological acumen
14.7%
Interpersonal skills
15.5%
Handle stress
18.9%
Analytical ability
19.4%
Strategic thinking
22.2%
Execution
23.5%
Communication skills
33.9%
Work with corporate execs
37.0%
Business understanding
40.8%
Leadership ability
N:385
0.0%
42.9%
10.0%
20.0%
30.0%
Source: “The Role of the CIO.” CIOInsight.com. February, 2003. 3. As viewed on October 30, 2003.
< http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >
40.0%
50.0%
23
How are CIOs Evaluated
Performance Evaluation
Project completion
Interaction with
peers, superiors,
subs
Financial
performance
5.7%
11.4%
11.9%
Operational
performance
23.4%
Contribution to
achieving bus. strat.
N:385
0.0%
42.3%
10.0%
20.0%
30.0%
Source: “The Role of the CIO.” CIOInsight.com. February, 2003. 2. As viewed on October 30, 2003.
< http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >
40.0%
50.0%
24
Gartner Divines Future of CIO
• Business refocuses on profits
and returns to core competencies
“The CIO is facing a real prospect of becoming a
‘zero-budget CIO’ by the end of the decade.” John Mahoney, Gartner Group
• IT departments are challenged
- Value in “leadership and service integration,”
to “define and deliver a
not in creation of technology
sustainable value proposition”
• Gartner’s “CIO Success Cycle”
–Lead: CIOs must use their access to the organization to network with key
personnel and gain influence and leadership as the IT solution provider.
–Shape Demand: CIOs must come to understand their company’s business
in order to provide effective input on technology demands.
–Set Expectations: CIOs must lead executives to realistic expectations for
projects, and offer realistic alternatives when necessary.
–Deliver: CIOs must form internal and external partnerships that enable them
to meet the demands of business changes.
25
Source: Anonymous, “Gartner Predicts ‘Zero-Budget’ CIO.” Information Management Journal. July/August, 2002: 8.
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
Corporate Background
•
•
•
•
•
•
Sisters of Mercy founded nearly 200 years ago by Catherine
McAuley. Sisters of Mercy religious communities around the
world.
Sisters of Mercy Health System (SMHS), founded in 1986,
consists of facilities in seven states with 27,800 co-workers and
4,000 physicians. Also includes health, dental and vision
insurance plans and is organizing its own Group Purchasing
Organization
SJMHC is a regional Strategic Service Unit (SSU) of SMHS
SJMHC includes St. John’s Mercy Medical Center (St. Louis),
St. John’s Mercy Hospital (Washington), Mercy Medical Group,
Unity Health Services
SJMHC includes 8,037 co-workers, 1,293 physicians
Provides healthcare to St. Louis community and missions to
other countries
Catherine McAuley
26
Source: Information courtesy SJMH community relations department
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
SJMHC Organization
President/CEO
SJMHC
Michael Morgan
Chief Operating Officer
SJMHC
Mark Stauder
Vice President
SJMHC
Sr. Barbara Grant, RSM
President
SJMH
Michael Zilm
Chief Nurse Executive
SJMMC
Chris Crain, R.N.
VP Medical Affairs
SJMHC
Paul Hintze, M.D.
Vice President
SJMHC
Robert Ruello
President
UHS
Wayne Diewald
Vice President
SJMMC
Patrick Christiansen, Ph.D.
Vice President
SJMHC
Denny Holter
Vice President
SJMMC
Wayne Diewald
President
MMG
Tom Hale, M.D.
Senior Vice President
MMG
John Hermann
EVP/CFO
SJMHC
Randy Combs
CIO
SJMHC
Dewey Freeman
Chief Contracting Officer
SJMHC
Curtis Thompson
Vice President
SJMHC
Ron Trulove
Vice President
SJMHC
Sheri Beekman
27
Source: Information courtesy SJMH community relations department
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
ITSJMHC
andOrganization
SJMHC
•
Chief Operating Officer
SJMHC
Mark Stauder
President/CEO
SJMHC
Michael Morgan
IT department employs 131 co-workers, 1.63% of
the SJMHC workforce
Vice President
SJMHC
• FY ’04 operating budget of $7.1M,
1.1%
of RSM
total
Sr. Barbara
Grant,
FY ’03
SJMHC operating
revenue
President
President
SJMH
UHS
• SMHS
ranked byWayne
Information
Week as one of top
Michael Zilm
Diewald
500 most wired companies, ranking 13th among
Chief
Nurse Executive in healthcare,
Vice President
organizations
213th overall
SJMMC
SJMMC
Chris
Crain,
R.N.
Patrick
Christiansen,
Ph.D. most wired health
• SMHS named as one of nation’s
systems by Hospitals & Health Networks
VP Medical Affairs
Vice President
magazine,
SJMHC a publication
SJMHC of the American Hospital
Paul Hintze, M.D.
Denny Holter
Association
Vice President
SJMHC
Robert Ruello
President
MMG
Tom Hale, M.D.
EVP/CFO
SJMHC
Randy Combs
CIO
SJMHC
Dewey Freeman
Senior Vice President
MMG
John Hermann
Chief Contracting Officer
Dewey Freeman
SJMHC
Curtis Thompson
Vice President
SJMMC
Wayne Diewald
Vice President
SJMHC
Ron Trulove
Vice President
SJMHC
Sheri Beekman
28
Source: Information courtesy SJMH community relations department and SJMHC finance and IT departments
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
IT and SJMHC
•
•
•
•
IT department employs 131 co-workers, 1.63% of
the SJMHC workforce
FY ’04 operating budget of $7.1M, 1.1% of total
FY ’03 SJMHC operating revenue
SMHS ranked by Information Week as one of top
500 most wired companies, ranking 13th among
organizations in healthcare, 213th overall
SMHS named as one of nation’s most wired health
systems by Hospitals & Health Networks
magazine, a publication of the American Hospital
Association
Dewey Freeman
29
Source: Information courtesy SJMH community relations department and SJMHC finance and IT departments
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
Background
• Dewey Freeman, CIO of SMHS and SJMHC for
one year
• 16 years of CIO experience:
– 12 years CIO at Baptist Health, Little Rock, Ark.
– 3 years at Fairfield Resorts
– 1 year in current position
•
•
Previously industrial engineer at Baptist Health
Degree in Industrial Engineering and MBA
Dewey Freeman
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
30
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
How does Dewey spend his day?
• Arrive at work around 7:00 a.m
• Ninety percent of day consists of communication 
– Day of interview, he was talking on his cell-phone all the
way in from the airport
– Meetings
– Conference Calls
– Participating in planning for future projects
– Status reports
•
Small part of day may be to deal with any arising crises
Dewey Freeman
– Work with vendor(s) to make sure process works
– Sometimes vendor motivations are different than the
organization’s
•
Leave work around 6 p.m. or so.
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
31
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
To whom does Dewey report? Relationship with CEO
• In SJMHC role, reports to Chief Financial Officer, Randy
Coombs
– Communicates daily with Randy
•
•
•
In SMHS role, reports to Sisters, though budget belongs to
SJMHC
Different sets of issues between SJMHC and SMHS
Has a good relationship with CEO, Mike Morgan
–
–
Doesn’t communicate daily
Plays golf with Mike
Dewey Freeman
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
32
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
Biggest challenges
• “The biggest challenge is trying to align the IS
organization with the business goals of the organization”
– Current SMHS/SJMHC strategy based around patient safety
• Barcodes to enter info instead of manual computer entry
• Computer Physician Order Entry (CPOE)  wireless
technology
• BRIDGE pharmacy project  Drug and patient barcoding to
prevent drug errors
– Not only IS goal, but end-user goal
•
•
•
Dewey Freeman
Achieving end-user buy-in
Making people understand IT is a tool to achieve
organizational objectives
Shorter life cycles  By the time you research, buy, test
and so on, the needs have already changed
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
33
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
What keeps Dewey up at night?
• After so many years and what he’s seen, not much keeps
him up at night.
• Having reliable systems, especially in healthcare setting
Dewey Freeman
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
34
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
Most successful project under Dewey’s leadership
• Baptist Health, 1996-99
– Implementation of Clinical Information Systems
•
•
•
•
Computer order entry, alerts
Documentation system
Digital documents printed to an image
Information flowed to different forms
– Learned how to build a team
– Learned the importance of having buy-in from the end-user
and that you need a champion on the user’s end
– “IS is uniquely qualified for project management, but we’re
not clinical. We need input from the end-user. Only the enduser can decide what’s needed.”
– “Without the end-user, IS is like a hammer sitting on the
table: We’re just a tool waiting to be used.”
Dewey Freeman
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
35
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
Most troublesome project under Dewey’s leadership #1
• Large, unnamed Baptist Health hospital
– Tried to implement a materials control package for the
surgery department
– Good concept driven by IS and Materials Management, but
Surgery didn’t take ownership, showed passive interest, no
buy-in
– Idea was to barcode each supply item to track item usage
– Problems were
• Labor to break open packages and barcode
• Once package was opened, items couldn’t be returned to vendor.
In the OR setting, items are frequently returned.
Dewey Freeman
– $500,000 project never implemented
– No input from the end-user on practicality of system
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
36
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
Most troublesome project under Dewey’s leadership #2
• Another Baptist Health hospital
– Tried to implement a computerized tray line system, similar
to McDonald’s, in the Dietary department
– Idea was to enable staff to complete a patient meal tray every
six seconds instead of five or fewer trays a minute
– System crashed at high speed, reliable at five to six trays per
minute
– Frustrating to staff and patients
– Went back to manual process
– $100,000 project
Dewey Freeman
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
37
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
Dewey on the role of IT in healthcare
“IT enables processes that bring value
to organizations by either improving
patient safety, improve the ability to
communicate about a patient, to help
efficiently run the business, and to
improve the productivity of the
workforce.”
Dewey Freeman
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
38
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
Dewey on the role of IT in healthcare
• IT is both commodity and strategic
– Strategic in what it’s used for to provide a competitive
advantage
– Commodity in the tools to accomplish strategic initiatives
Dewey Freeman
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
39
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
Dewey on the role of IT in healthcare
• Tools vs. Toys
– Having a well-defined strategy will help decide what’s a toy
and what’s a tool
– Maturity of technology and the ability of technology to help
organization meet its goals vs. latest fad
– Pay a little extra if early adopter; Dewey prefers to be a little
off the “bleeding edge”
– Too important for it to work than to have the latest gadgets
– “If you’re out on the edge, you get gray hairs; if you’re over
the edge, you go bald.”
Dewey Freeman
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
40
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
Dewey on the role of IT in healthcare
• Healthcare in general lags behind other industries due to
the resources applied to it
• Three percent of total expenses invested in IS (SJMHC is
1%), while other industries invest at least 10-12%
– Healthcare fairly regulated, and technology dollars tend to
center around treatment (new medical equipment)
Dewey Freeman
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
41
Case Study
St. John’s Mercy Health Care CIO Dewey Freeman
Dewey on the role of the CIO in an organization
“The CIO should be looked at as a person who
can communicate with leaders of an
organization about his vision. A CIO must
be a spokesperson for use of systems to
accomplish business objective, be a
spokesperson for innovation, taking IT from
its current level to a new one. The CIO must
be a visionary leader.”
Dewey Freeman
Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason
Godefroid, October 11, 2003.
42
Case Study
Graybar CIO - Beatty D’Alessandro
Company History
• 1869 - founded by inventor Elisha Gray and entrepreneur Enos
Barton as Gray & Barton.
• 1872 - became Western Electric Co., supplying telegraph
components to Western Union Telegraph.
• Upon invention of telephone, became exclusive manufacturer of
telephone equipment for Bell System.
•
•
•
•
1925 - spun of electrical distribution business which became Graybar Electric
Company, Inc..
1929 - employees bought Graybar.
1982 - Graybar’s Corporate headquarters moved to St. Louis from its home in the
Graybar Building above New York City’s Grand Central Terminal.
2003 - Graybar Electric Company rebrands itself as Graybar to deemphasize the
electrical aspect of its business and refocus public view on its supply-chain
management capabilities.
43
Source: “Company History.” Graybar Electric. 2003. 5 Nov. 2003 http://www.graybar.com/aboutus/gbhistory.html.
Case Study
Graybar CIO - Beatty D’Alessandro
Corporate Information
• 2003 projected revenues:
• Distribution facilities:
• Employees:
• Employee owned:
$3.8B
280
7500+
>50% of stock in hands of retirees
• Primary customers: electrical and voice/data contractors, commercial
and industrial firms, tel-coms, power utilities, and government entities.
• Distributes for 4200+ manufacturers of electrical, comm/data, and
networking products
44
Source: “Company Profile.” Graybar Electric. 2003. 5 Nov. 2003 http://www.graybar.com/aboutus/default.html.
Case Study
Graybar CIO - Beatty D’Alessandro
Rankings and Recognition
• #1 on Electrical Wholesaling’s 250 largest electrical distributors (2002)
• #3 on Business Week’s list of private U.S. info-tech companies (2002)
• #21 on Forbes’ ranking of to 25 private U.S. Companies (2002)
• #344 on 2003 Fortune 500 ranking of largest US companies (2003)
45
Source: “Company Profile.” Graybar Electric. 2003. 5 Nov. 2003 http://www.graybar.com/aboutus/default.html.
Case Study
Graybar CIO - Beatty D’Alessandro
History of Graybar IT
• 1970s - Graybar computerizes its sales system.
• Mid-late 1980s - Graybar builds homegrown system encompassing: Order
Entry, Purchasing, Payables, and Receivables. No integration with accounting.
• Late 1980s - Accounting moved their manual system to PCs.
• 1998 - Accounting implemented mid-tier accounting system, Clarus.
• 2000 - Legacy system is reaching maximum capacity. Graybar begins search for
replacement. Determines to pursue ERP. Contenders: JD Edwards, Oracle, and
SAP
• 2001 - Graybar holds Proof-of-Concept for SAP. Will be largest wholesale
distributor to implement this software primarily designed for manufacturing.
• 2003 - SAP go-live. Sales and Logistics systems roll out. Finance & HR go
“big-bang.”
46
Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.
Case Study
Graybar CIO - Beatty D’Alessandro
Graybar IT
• Mission:
– “Provide the solutions that the business and our customers
need in a rapid and cost effective way. It’s our job!”
• Staffing:
– Currently in rollout phase of ERP implementation: 280
employees in IT, including consultants.
– Staffing should reduce by 15-20% after rollout.
– 3.7% of total Graybar employees.
• IT Budget:
– 2003 - $55M.
– 1.5% of total Graybar 2003 revenue.
47
Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.
Case Study
Graybar CIO - Beatty D’Alessandro
Background
• Beatty D’Alessandro, CIO of Graybar for one year
• 3 years as Vice President over ERP
• 2 years as Director of Strategic Planning
– Led mergers and acquisitions projects
• 15 years of Treasury and Financial Management experience
•
– District Financial Manager
– Treasury Manager at Corporate
– Field financial management positions
Education
– B.A. in Finance and Marketing
– MBA with emphases in Finance and Organizational Design
48
Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.
Case Study
Graybar CIO - Beatty D’Alessandro
How does Beatty spend his Time?
•
Managing IT Operations - 40%
– Aligning the vision for IT with
Graybar’s objectives
– Ensuring resources are available
– Making tactical decisions
•
Non-IT Related
Issues
30%
Managing Outside Relationships - 30%
– Meeting and communicating with IT
vendors and partners
– Visiting Graybar customers
•
Managing IT
Operations
40%
Managing Outside
Relationships
30%
Non-IT Related Issues - 30%
– As member of executive team, deals
with issues that affect the company at
large (e.g. advises on Zone organization,
new brand, financial arrangements).
Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.
49
Case Study
Graybar CIO - Beatty D’Alessandro
To whom do you report? Relationship with CEO.
• Graybar’s CIO reports directly to the CEO, Robert Reynolds.
• Beatty’s relationship with Bob has been close throughout ERP project
– The sheer cost of ERP and its potential to negatively impact business hold
keen interest for Bob and the other members of the executive team.
• Communication with CEO
– Talks with Bob about twice a week under normal circumstances.
– Exchanges email 4-5 times a week.
– Exchanges are initiated by CEO 50% of time.
50
Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.
Case Study
Graybar CIO - Beatty D’Alessandro
Biggest Challenges
• “Keeping the funding for a huge technology project from being shut
off while the economy tanked. That was the biggest challenge of my
career!” Beatty D’Alesandro. “Could have been a career killer for
me...”
• Engaging business leaders and personnel in a project.
– Getting business to engage in a project.
– Keeping business engaged throughout project.
– Ensuring that business remains engaged with the result after
project is complete.
• Personnel issues.
51
Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.
Case Study
Graybar CIO - Beatty D’Alessandro
What keeps Beatty awake at night?
• Preparing for SAP go-live.
– “Was there some major blunder that would have catastrophically
affected the company?”
– When you implement SAP, you don’t want that to be front page news
on the Wall Street Journal.
• There is background “buzz” of tension everyday that something
might go wrong and cause disruption of business.
– Likely areas:
•
•
•
•
Applications
Network
Email
Hardware
52
Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.
Case Study
Graybar CIO - Beatty D’Alessandro
Most troublesome project under Beatty’s leadership?
• SAP has been only major project since becoming CIO
• Areas of difficulty:
– Long term project. Requires great stamina and ability to live with stress.
– Cost lots of money. Major feat to keep funding flowing during bad economy.
Presentations, reports, assurances to steering committee just to keep going.
– Business disruption. Tremendous resources required through all phases of
project and most of these people have another full-time job.
– Unable to determine degree of success until at least a year after up and
running.
– Huge resistance to go-live. Fears that not enough testing had been done.
– Large discontent for 2 months after go-live. Not enough training.
53
Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.
Case Study
Graybar CIO - Beatty D’Alessandro
Biggest success under Beatty’s leadership?
• Again, SAP has been only major project since becoming CIO
• Does not consider project a success at this point. Rather it is
a partial success thus far.
• The question that the interviewer didn’t ask: “Would you do
it again?”
– “I would. The challenge of it, ability to grow, learn new things,
change your perspective, (these have made it the) most
challenging and fulfilling three years of my professional life,”
Beatty D’Alessandro.
54
Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.
Case Study
Graybar CIO - Beatty D’Alessandro
Beatty on IT’s role within Graybar
• With the advent of ERP at Graybar, IT now holds higher status within the
organization than at anytime in prior history.
• Beatty’s goal is for IT to become invisible to the organization.
– The tools of IT should be as commonplace as the telephone on your desk. It’s
there, you need it and use it to do your job, but you don’t think about it, aren’t
afraid of it, don’t even really see it.
– The people in the IT organization are no longer an island of people outside
the real business, but are involved in the business, solving business problems.
– “What I hate to hear coming out of our mouths is, ‘We can’t do that.’ I want us
to say, ‘We have the functionality to do that. It will take 5 months, 8 people and
$75K. Is it worth it to you to pay for that?” Beatty D’Alessandro.
55
Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.
Case Study
Graybar CIO - Beatty D’Alessandro
What would Beatty look for in a successor?
• Ability to strike balance between strategic and tactical focus.
– Strategically, must be the pathfinder to keep the company technologically
alive and dynamic.
– Tactically, must keep the information factory running.
• Understanding of organizational politics.
– Must have broad enough view to understand the political effects of decisions
throughout the organization.
• Ability to align IT organization with the goals and initiatives of the
business.
– “My technology doesn’t make any money for me. It has to make money for
Giglio (Sr. VP Operations), Udell (Sr. VP Electrical Sales), and DeSousa (Sr.
VP Sales and Distribution). If it doesn’t, why would you give me any
money?” Beatty D’Alessandro.
56
Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.
Questions??
57