ROLE OF THE CIO Alexandra Bleitz Matthew Clabaugh Mingjie Li Choong Kwan Kang 1 OVERVIEW General information about CIOs Issues facing CIOs Demographics of CIOs Turnover rate among CIOs Business and people skills needed for CIOs CIO Interviews (4) CIO Panel Discussion 2 CURRENT ISSUES FACING CIOS 3 TOP CHALLENGES FACING CIOS IT Management Technology Personal effectiveness Aligning IT and business goals Integrating/enhancing existing systems Shortage of time for strategic planning IT enabled process movement Ensuring data security and integrity Overwhelming back log of requests Business continuity/risk management Business Intelligence Inadequate budget N=568 Source: 5 4 DEMOGRAPHICS OF IT 5 GENDER IN IT Men outnumber women in all IT 4-to-1 Men represent 85% of IT Leaders, while women represent 15% The number of female IT leaders are on the decline. N=568 6 Source: 5, 11, 18 JOB QUALIFICATIONS Many have had degrees in computer science, software engineering, or information systems. There is a growing demand for leaderships skills, business knowledge, interpersonal skills and strategic foresight which has taken precedence over technical skills. Critical skills cited by current CIO’s include communicating effectively, Strategic thinking/planning, the ability to lead and motivate staff. Over half of respondents cited management/leadership skills as their primary strength. N=568 7 Source: 5, 17 NEW EDUCATION FOR IT LEADERS The Federal CIO council developed a list of “high-level competencies” that CIO’s need. Which are to be put to use in selected institutions that train up-and-coming CIO’s. The final list came to 549 learning objectives in 12 categories. Concepts included behavioral principles, theories of motivation, visionary leadership, building expertise, performance assessment and retention. Source:17 8 TURNOVER AMONG CIOS 9 AVERAGE TENURE LENGTH OF CIOS 2006 2005 2004 5 years 4 years and 11 months 4 years and 7 months N=568 Average State CIO tenure length 26 months Average UK CIO tenure length 3 years Source: 5, 14, 15 N=50 + N=350 companies 10 REASONS FOR CIO TURNOVER Acquisitions and mergers Not fitting into company culture Groomed techie not used to management State CIOs not the right party for the job after election (Steve Kolodney, Washington State) Can’t overcome challenges Poor performance Developing role (unstable) Don’t always know what is required Source: 1, 15, 16, 19 11 REASONS FOR CIO TURNOVER CONTINUED Resume building Jump from job to job Fix it uppers Habitual resource fighting Fight for money to acquire programs Constantly justify budget CIO Source: 1, 9, 16 Jeff Loyett at a top law firm 12 BUSINESS AND PEOPLE SKILLS REQUIRED FOR A CIO 13 THE PRIMARY STRENGTH AS A CIO Communication/leadership/management skills 52% Business and/or industrial knowledge/experience 20% Project management skills/project execution skills Deep knowledge of technology 12% Turnaround/change management skills 7% 10% N=568 Source: 5 14 THE MOST PIVOTAL PERSONAL SKILL REQUIRED FOR SUCCESS IN THE CIO ROLE Ability to communicate effectively 71% Strategic thinking and planning Ability to lead/motivate staff 51% Understanding business processes and operations 43% Ability to influence change in others 34% Understanding industry trends and business strategy 15% Negotiation skills 13% Through knowledge of technology options 12% Technical proficiency 10% 50% N=568 Source: 5 15 COMPANIES Spartan Light Metal Products CIO Build-A-Bear CIO Dave Finnegan Marvell Asia Pte Ltd IT Chris Franks Director Vincent Chee Samsung Heavy Industries IT Director Boohyung Kim 16 SPARTAN LIGHT METAL PRODUCTS INC. Privately held company founded in 1967. Vision for the future: “The Global Value Leader in Light Metal Technologies- Through Engineered Solutions and Competitive Costs.” Working with a wide range of manufacturers, from automobiles and trucks to power tools, electronic components and many more. 17 Spartan Light Metal Products Inc. 1100 Employees 4 business locations: Plants in: Mexico, Missouri; Sparta, Illinois; and Hannibal, Missouri Corporate Office: At Geyer Road in St. Louis, Missouri Revenues greater than $200 Million Doubled in size in the past 7 years 18 The leading, and only international, company providing a “make your own stuffed animal” interactive retail-entertainment experience Source: 7 19 Major products are the bears but make over 30 different styles of animals with variety of clothing, shoes, and accessories Source: 7 20 Founded in 1997 by Maxine Clark IPO in 2004 Stores: Retail (company owned): 293 Franchised (international): 41 Employees: Full time: 1200 Part time: 5700 Source: 7 21 BUILD-A-BEAR’S TARGET MARKET Families with children ages 3-12 Grandparents Aunts and Uncles Teen girls with boyfriends Source: 7 22 BUILD-A-BEAR SALES Source: 7 23 MARVELL ASIA PTE LTD Founded -- 1997 Size of MAPL-- 253 employees Locations of MAPL-- Singapore, one sales representative office in China Products of MAPL --Chips Chips for Datacom and Storage. Datacom includes Wireless, Printer, Video and etc. 24 MAPL’S REVENUES Year of 2003 (Feb 02~Jan 03): US $278 million Year of 2004 (Feb 03~Jan 04): US $605 million Year of 2005 (Feb 04~Jan 05): US $934 million Year of 2006 (Feb 05~Jan 06): US $1,303 million Year of 2007 (Feb 06~Jan 07): US $1,785 million 1800 1600 1400 1200 1000 800 600 US Dollars (millions) 400 200 0 2003 2004 2005 2006 2007 25 Founded August 5, 1974 10,565 employees Located in Seoul, Korea 8 overseas branch offices 1 manufacturing subsidiary 26 SAMSUNG’S MISSION AND CORE VALUES By providing ships and facilities that are safe, environmentfriendly, economical and convenient, the company is able to satisfy any and all customer demands for quality. 27 Major products: Commercial, Industrial ships, Cruise and Ferries Offshore platforms Digital business Construction and Engineering 28 SAMSUNG’S WORTH (2006) Sales: $635,169,072 Total Assets: $898,918,471 Capital Stock: $115,493,703 Profit: $212,500,000 29 CIO BACKGROUND Education: Spartan’s Chris Franks Build-A-Bear’s Dave Finnegan Marvell’s Vincent Chee Samsung’s Boohyung Kim Bachelor of Science in Mechanical Engineering Bachelor of Science in Information Technology Bachelor of Science in Engineering Bachelor of Science in Engineering Masters of Science Work History: •Design Engineer •Sold computer systems and hardware •Developed own company using computers for design and development •Information Systems Manager (1990-1996) •Systems Engineer/Project Manager (19961999) •Director of Inbearmation (1999) •Worked in IT department for MAPL •Promoted from within to IT Director (2006) •Worked in IT department for Samsung •Promoted from within to IT Director (2006) 30 HIERARCHY OF SPARTAN LMP CEO Vice President of Human Resources Human Resources Chief Financial Officer Finance Chief Operations Officer Director of IT Plant Managers IT Division Plants 31 BUILD-A-BEAR HIERARCHY CEB: Maxine Clark CWB: Paul Bundonis CMB: Teresa Kroll •Weekly meetings with •CFB •CEB •CEB and CFB •All C-level officers COB: Scott Seay CFB: Tina Klocke CIB: Dave Finnegan CIB: Dave Finnegan 32 HIERARCHY OF MAPL Senior IT Director of Marvell CEO of MAPL Financial Controller Sales Director Operation Director R&D Director IT Director 33 HIERARCHY OF SAMSUNG Reports to the CEO and Executive Director of Management Support Meet formally twice a month Usually only sees him during formal meetings 34 CIOS QUALITY TIME Spartan’s Chris Franks Build-A-Bear’s Dave Finnegan Time spent on various projects varies from day to day Handles the main (large) IT projects Small size of staff (10) requires his personal help on IT projects Strategic involvement Weekly meetings-Lots of them. Basically spends all his time in meetings and on large IT projects 35 CIOS QUALITY TIME Marvell’s Vincent Chee Samsung’s Boohyung Kim Time on projects 60% 25% Time Training 10% 5% Time on Maintenance 30% 5% Time on Management Support X 65% 36 IT DEPARTMENT AT SPARTAN LMP Started in 2000 as the first director of IT. 10 people on staff that maintains operations at four facilities across the state. Tech support at each facility Server and Network Administrators (Manager) Software development and Programmers Department handles email, ERP, purchased programs (integration), all hardware resources (servers, laptops, telecommunications, etc), and Special resources for the engineers who develop designs. 37 CONTROL AND DECISION MAKING Reports to CFO whom is seen frequently Meetings are scheduled quarterly with CEO Yearly IT budget in the range of $2 million Project costs vary from $5k-$15k Responsibility of IT decisions: < 100K: IT monarchy > 100K: IT Steering Committee (Business Monarchy) 38 BUILD-A-BEAR’S IT DEPARTMENT CIB (Chief InBearmation Bear) is the head 40 employees Handles: Service desk (24/7 support) Contracts with suppliers Computers, mainframes, routers, servers, etc 39 BUILD-A-BEAR’S IT BUDGET Dave determines the budget each year and then gets approval from the CFB There is no predetermined range for the budget such as 5% of Revenues Dave determines what IT projects to invest in then takes it to other C level officers to look at/approve 40 IT DEPARTMENT-MAPL Employees: 16 in MAPL and around 50 for Marvell WorldWide Budget: 1% of revenue of Marvell Year of 2007(Marvell): US $2,238 million IT project cost: determined by whether it is a software upgrade/enhancement done internally or by consultants or an equipment upgrade. Average length of IT projects: 3 to 6 months IT Projects investment decisions made by CEO and Senior IT Director together 41 IT DEPARTMENT-SAMSUNG Employs 31 people and an additional 65 through partnerships Budget: $20 million General Expenses: $14.7 million Investment: $5.3 million Budget planned every August by the IT department Reviewed within the department and discussed with financial department 42 IT DEPARTMENT-SAMSUNG CONTINUED IT Projects: Average cost: $200,000~300,000 Average length: Less than 1 year CIO mainly decides on what projects to invest in but also depends on the size of the investment 43 SUMMARY OF IT DEPARTMENT DIFFERENCES Marvell Asia Pte Ltd Samsung Heavy Industries Spartan LMP Build-A-Bear 10 40 16 31 Budget ≈$2 million Not specified 1% of Revenue $20 million Project Costs $5K-$15K Varies Varies $200K~300K Project Length Varies ≈1 year 3-6 months ≈1 year Reports to CFO Reports to CFO Reports to Senior IT Director Reports to CEO Depends on level of spending Depends on level of spending All decisions made by CEO and Senior IT Director Depends on level of spending Employees Control Project Decisions 44 MOST IMPORTANT SKILLS FOR A CIO Spartan’s Chris Franks Build-A-Bear’s Marvell’s Dave Finnegan Vincent Chee Samsung’s Boohyung Kim People skills Diplomacy: Every department wants a piece of IT Able to align IT strategy to business values Business mind Good mix of technology skills Business Focus: need to look at valued added Create an environment that encourages individual creativity and ownership IT technical mind A good understanding of how the business works Communication View change skills as an Communication skills opportunity 45 TOP 3 CHALLENGES AND HOW TO TACKLE THEM: Getting people to understand the value of IT Getting adequate resources for IT projects. Getting projects done in reasonable amount of time. User Security. Security for processes within the company. Solutions: Greater involvement with top business managers to demonstrate value added and provide results. Stay vigilant. Staff has to understand new risks. 46 TOP 3 CHALLENGES AND SOLUTIONS FOR DAVE Bandwidth: wants to quicken implementation timelines and overall speed Security: privacy, identity theft, worms, viruses, etc. # of projects: Build-A-Bear is a growing company so have many concurrent projects Solutions: Bandwidth: Automate as much as possible, add staff where needed, prioritize projects Security: quarterly reviews, best practice sign off, and external audits Number of projects: try to increase completion speed, but mainly learn to deal with it 47 THREE BIGGEST CHALLENGES-MAPL System Outages, Application performances, Stability of rollout projects Solutions: System and Application early warning monitoring tools. Stringent application testing process Load simulation 48 THREE BIGGEST CHALLENGES-SAMSUNG PI: President Identity ERP: Enterprise Resource Planning KMS: Knowledge Management System Solutions: BPM: Business Process Management 49 TOP 3 CHALLENGES FOR CIO Spartan’s Chris Franks Build-A-Bear’s Marvell’s Dave Finnegan Vincent Chee Samsung’s Boohyung Kim Getting people to understand value of IT Bandwidth System Outages PI Acquiring adequate resources for projects Security Application performances ERP User security Number of projects Stability of KMS rollout projects Which challenges fall under which category: IT management, technology, or personal effectiveness? 50 BIGGEST ACCOMPLISHMENTS Finding several redundant activities and consolidating programs. Creating the IT division and overcoming support and staffing issues. Currently having standard decisions for IT basics. What he would change: Would have put together a 5-year plan sooner and pressed harder for resources. 51 DAVE’S BIGGEST ACCOMPLISHMENT Dave was in charge of acquiring a UK company Two years prior to inking the deal, Dave was in London testing to see if the company would be a good fit not only for IT but the entire company Very strategic Role 52 BIGGEST SUCCESS-SAMSUNG Smooth process of ERP establishment on schedule, expected to open in January of 2008. Managed 400 task force personnel involved in the ERP project Acquired project management technology and skills through the ERP project 53 MEASURES OF SUCCESS: Spartan LMP Build-A-Bear Marvell Asia Pte Ltd Samsung Heavy Industries • The company is running smoothly with no support calls coming in • The ability to lead a team (not just IT people) •Customer Satisfaction •Achieving results as scheduled in the project planning stage • Helping the business to grow and ultimately be more profitable • Getting information to people when they need it • Real business results: adding value to the company • Increased worker productivity • Innovation • Customer satisfaction: making sure the company runs smoothly 54 STRATEGIC OR TACTICAL Spartan’s Chris Franks Build-A-Bear’s Dave Finnegan Marvell’s Chee Vincent Samsung’s Boohyung Kim Perceived Tactical Strategic Tactical Strategic Actual Tactical Strategic Tactical Strategic • • • 64% of CIOs believe that their role is strategic 36% of CIOs believe that their role is tactical 56% of CIOs said that a significant part of their job is strategic planning N=568 Source: 5 55 CIO PANEL DISCUSSION Hosted By SIM St. Louis CIOs Present: Ellen Watson: St. Louis University Jim Tom: University of Missouri St. Louis Andrew D. Orstadt: Washington University Larry Haffner: Webster University 56 BACKGROUND OF CIO REPRESENTATIVES • Ellen Watson: – – – – • Librarian/Cataloger Professor Dean of Librarians Integrated Infrastructure and Content Jim Tom: – – – – Mostly Research Background Analyst Chief Application Officer 3 years at UMSL 57 BACKGROUND OF CIO REPRESENTATIVES • Andrew D. Orstadt: – – – • 8 years experience as CIO in construction Analyst Hired to organize and save money, worked at Washington University for 1.5 years Larry Haffner: – – – Worked in higher education all of his career Has worked at Webster for 5 years His role is anything to do with technology 58 STRUCTURE OF IT DEPARTMENT • Ellen Watson, SLU: – • Jim Tom, UMSL: – • 80 full time employees, 50 student workers Andrew D. Orstadt, Washington U.: – • 110 full time employees, 45 decentralized IT workers 140 full time employees, 50-60 student workers for structure, customer service, and running data centers Larry Haffner, Webster: – 65 full/part-time staff including specialized faculty, 50 student workers. 59 JUST SUPPORT? • Ellen Watson, SLU: – – – • Not as much innovation. SLU wants to be an early follower, not on the cutting edge. Buys technology 99% of the time Jim Tom, UMSL: – – – Push ourselves to look at innovation, as well as if the “trains are running on time”. Encouraged online courses. Use a laddering approach to encourage use of new technologies. Bring in professionals from Sysco and Intel to learn about high performance computing. 60 JUST SUPPORT? Andrew D. Orstadt, Wash. U.: Focus on progression of lifestyle, organizing and centralizing for the right reasons. Create an environment that can embrace change. Larry Haffner, Webster U.: Has no research of any kind Has more input in the university’s strategic direction. Ex: maintaining several sites. 61 WHAT MISTAKES HAVE YOU MADE? • Larry Haffner, Webster: – – – • Ellen Watson, SLU: – • Technology mistakes Personnel Mistakes, building an effective staff Political Mistakes: understanding what battles you can’t win and how to communicate Governance is a big issue. Managing “who decides” Jim Tom, UMSL: – – – Every faculty member thinks they’re an expert Building a management team that can function independently Too much work, not enough people 62 STRATEGIES FOR RECRUITING AND RETAINING EMPLOYEES: • Problems: – – – • Some solutions: – – • Universities cannot compete with industrial salaries Predominantly have entry level positions Have to train as if they are going to stay Organized unsystematic processes to make solutions routine. People were fixing things differently each time. Trying to offer flexibility and increase interest, which has created less structure. Result: Plan for 5 year maximum turn-over 63 “USERS OFTEN THINK THEY ARE ENTITLED” Story from Ellen Watson: Listserv was hacked into and taken over late during the night No one on the networking team was answering their calls and Ellen was forced to shut down the listserv Hundreds of angry emails flooded her inbox from angry users who believed they were entitled to have the listserv available. An issue often faced by CIOs 64 THANK YOU Any Questions? 65 SOURCES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Alexander, Steve, “As the door turns,” Computerworld, 1998; vol 32, 8, pp. 73. Business Editors, “The Changing Role of the Chief Information Officer” Business Wire, p.1, Nov 23, 1998 “Chief Information Officer.” Wikipedia: The Free Encyclopedia. 9 October 2007. <http://en.wikipedia.org/wiki/ChiefInformationOfficer> Chris Franks, Director of IT at Spartan Light Metal Products Inc., interviewed in person by Alexandra Bleitz, September 21, 2007. CIO Magazine’s “2007 State of the CIO Survey” CXO Media Inc, 2007. http://www.cio.com/state/stateofcio.pdf, viewed N=568 Dave Finnegan, CIB of Build-A-Bear, interviewed by phone by Matthew Clabaugh, October 4, 2007. http://library.corporate-ir.net/library/18/182/182478/items/236139/BBW_10K.pdf, viewed on October 18, 2007. http://www.cio.com/article/25367/Business_Alignment_Find_the_Right_IT_Metrics_, viewed on October 18, 2007. Jeff Loyett, Director of Management Information Systems of Electric Potter Signal Company, interviewed in person by Matthew Clabaugh, September 13, 2007. Jennifer McAdams, “7 Common Obstacles” Computerworld, Vol.4, lss.50, p.40-42, Dec 11, 2006 Kolbasuk McGee, Marianne. “IT’s Gender Gap” InformationWeek. Manhasset: Nov 21, 2005. , Iss. 1065; pg. 75, 1 pgs 66 SOURCES 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. Levinson M., “CIO and CEO: How to Work with Your Boss” CIO Magazine, Oct 1, 2004. Luftman J., and Mclean E., “Key Issues for IS Executives,” MIS Quarterly Executives, Vol. 5,2,2006, pp.81-99. McKenna, Brian, “CIO tenures shorter than their projects,” Computer Weekly, Sutton: Jul 10, 2007. pg. 5, 1 pgs N = 350 companies PERLMAN, Ellen, “Topside Turnover: CIOs are among the most endangered of species, and that’s a problem not only for them but also the governments they serve,” Governing, Congressional Quarterly, April 2007. N = 50+ Preston, Robert, “CEO, CIO Turnover Is Just Part of E-Transformation,” InternetWeek, Iss. 841, 2000, pp. 9. Prewitt, Edward and Schneider Traylor, Polly Elements of a CIO education October 21, 2002. Sheila Greco Associates, 2006-2007 “Women in Technology Study”.Jun 6, 2007 Surmacz, Jon, “Turnover is Expensive” CIO.com, June 15, 2004, http://www.cio.com/article/29175/Turnover_Is_Expensive_ viewed October 18, 2007. Walsh, Katherine, “Business Alignment: Find the Right IT Metrics,” CIO.com, October 1, 2006. www.buildabear.com, viewed October 18, 2007. 67