Presentation by
Eliot Lee and Mark Guthrie
November 12, 2005

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Chief Information Officer profile
- Demographics
- Salary data
- Employment information
- Topic relevance
In-depth case studies of 3 CIOs
Best practices: Role of the CIO

Quotable quote:
“It is no longer useful or meaningful to talk about the ‘role of the CIO.’ ”
– Barb Gomolski, senior research director, Gartner, Nov. 27, 2000 1
Rationale

No single “one-size-fits-all” position description

CIOs wear many hats; work in various roles
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Different types of CIOs
CIOs are driven by background and interests
Industry and organizational differences affect role

Job title is commonly given to the senior executive in charge of information technology and computer systems that support an organization’s business goals.
As IT has become increasingly important, the CIO is typically viewed as a key strategist within the organization.
In many companies, the CIO reports directly to the Chief Executive
Officer (CEO). In some companies, the CIO sits on the Executive
Board.
Usually, a CIO proposes IT strategies to achieve business goals and works within an established budget.
- SearchCIO.com Definitions 2

87% are male
70% moved up through the IT ranks
5 years, 9 months is average time as CIO
4 years, 6 months is average time in current job
40% report to CEO
85% are responsible for enterprise-wide IT
76% do not plan to outsource outside of U.S.
- Source: CIO Magazine 3

Percentile
Source 4
25 th
Percentile
Midwest:
Chicago
East Coast:
New York
West Coast:
Los
Angeles
Southeast:
Miami
$173,434 $186,163 $179,640 $157,841
50 th
Percentile
75 th
Percentile
$214,922
$272,348
$230,696
$292,337
$222,611
$282,093
$195,598
$247,862

In 1996, President Clinton signed what has become known as the Clinger-
Cohen Act.
This act required major
Federal Agencies to establish the position of CIO .
- CSA High Technology Research Database with Aerospace 2001 5

5 Years: Average tenure of a CIO in a single position – examples:

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Joseph Eckroth, former CIO of Mattel (Toys), left position after 5 years. Joined New Century Financial
(Real Estate Investment Trust)
Patricia Morrison, former CIO of Office Depot, left after 3.5 years to join Motorola

Frank Hood, former CIO Krispy Kreme Doughnuts, left shortly to join Quiznos 6
Some CIOs seek resume-building experiences rather than a long-term career with a single employer. 7

77 business executives surveyed – majority believe CIO turnover is equal to other senior positions 8 *
8% – “CIO turnover higher than other senior positions in the company”
62% – “CIO turnover is the same”
31% – “CIO turnover is lower than other senior executive positions”
* Darwinmagazine.com

CIO job search during downturn could last as long as 12 to 18 months
Recruiting for CIOs increased in 2005
Nationwide
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CIO job listings increased 30% from 2004
Overall IT sector hiring increased 37% from 2004 9
Locally, CIOs are increasing hiring of IT professionals, according to Robert Half
Technology

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11% of CIOs surveyed in St. Louis planned to add to staff; 10% surveyed planned to reduce staff
Net 1% of CIOs planned to hire in the third quarter of
2005 – increase of 2 percentage points from second quarter 10

Three different companies.
Three unique CIOs.
Three insightful perspectives.

Glendon Schuster 11
Chief Information Officer
Centene Corporation
Joined company in company
June 2005 on an interim basis.
Became permanent in October
2005.
Senior Management Team
Member
B.S., Electrical Engineering

Title
Partner
Company
Accenture Consulting
Head of Information
Technology
Development Lead
Gamut Interactive
Deluxe Check
Description
Provider of programming consultants
A start-up company focusing on electronic couponing interacting with TV/Print Media
Check production
Various roles (designer, application architect, development lead, etc)
Walgreens Pharmacy

Michael Nierdorf
President and
Chief Executive Officer (CEO)
Glendon Schuster
Chief Information Officer (CIO)
CIO reports to the
CEO

Managed care provider for Medicaid
Services: claims processing and client reporting
Operates healthcare plans in Indiana, Kansas, Missouri, New
Jersey, Ohio, Texas and Wisconsin
Contracts with other companies to provider special services including behavioral health and disease management
288 IT employees – 159 full-time corporate; 79 contractors
Year
2004
2005
Total Company
Revenue
$1 Billion
$1.5 Billion
Annual
IT Budget
Proprietary
Proprietary

159 Full-Time Employees
79 Consultants
Dynamic
Expanding
Reorganizing
Very structured

Creating more customer-based reporting
Increasing disease management
Development of “trending” systems
Regional Health Information Organizations
Ability to bring fast reliable information to patients, doctors and hospitals

Balance between controls (security, permissions, signoffs) and administrative overhead
Giving people more authority to work on tasks (e.g., migrate code) is generally more efficient, but can lead to risks in security, regulatory procedures, compliance and litigation
Locking down authority tends to tie up the organization in administrative overhead

Reports directly to the CEO
Weekly senior management meetings
Average CIO communication with CEO occurs five times per week – “IT rules” at
Centene.
Redefining the role of the
IT department
Major emphasis on teamwork

Major reorganization of the IT department.
Aligned the IT groups within functional areas.
Quotable quote:
“Change by evolution, not revolution.”
–
Glen Schuster, CIO

IT drives the business at Centene
IT should be reacting to the business
IT should develop systems that complement the business
Quotable quote:
“IT should support the business objectives.”
– Glen Schuster, CIO

Disease management
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Design systems that do trending analysis based on the amount and types of claims received
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Develop software that can help predicate a patient’s predisposition to a disease
Customer-based reporting
Regional health information systems

CIO is not a technology expert.
CIO has more “power” than he actually has.
CIO can install and “fix” software problems.
CIO is not involved with the daily activities of the
IT department.
CIO does not run the business; takes direction from the business.

Patrick McNamee 12
Chief Information Officer
Express Scripts Inc.
Joined company in February
2005
Senior Management Team
Member
Corporate Resource Council
Member
M.S., Electrical and Computer
Engineering and B.S.,
Biomedical Engineering –
Marquette University

Title Company Description
President and General
Manager
President and General
Manager
Chief Information and
Quality Officer
MISYS Physician
Systems
Orthopedic Equipment
Corp. (General Electric)
NBC (GE)
Provider of information management software for physician practices
Surgery X-ray manufacturing business
(GE Medical Systems)
Television Network
Chief Information Officer and General Manager
GE Transportation
Systems
Chief Information Officer GE Power eBusiness
Transportation
Global Power Plants

Leading pharmacy benefits management (PBM) company
Services: claims processing, mail pharmacy, specialty prescription fulfillment, benefit design consultation, drug utilization review, formulary management, and drug research
Wide range of corporate and organizational clients including Dell Computer,
United States Department of Defense (DoD), Citigroup
Recognized in Information Week’s “500 Most Technologically Progressive
Companies”
1,030 IT employees – 772 full-time corporate; 258 contract
Year Total Company
Revenue
Annual
IT Budget
2004 $15.1 Billion $190.4 Million
2005 $17.1 Billion
Projected
$223.8 Million

George Paz
President and
Chief Executive Officer (CEO)
David Lowenberg
Chief Operating Officer (COO)
Patrick McNamee
Chief Information Officer (CIO)
CIO reports to the
COO

4 a.m. – Blackberry buzzes on night stand to alert about a Severity One “Sev 1” critical systems issue
Joins conference call to discuss troubleshooting and assess impact on systems and users
Half-hour to get ready for work at the office
Time allocation during the day:
1. Leadership and staff meetings
2. Specific topical meetings (Corporate Resource
Council, Medicare Part D, Strategy/Planning)
3. Dealing directly with employees (on-on-one meetings)
4. External boards: St. Louis CIO Forum, Community
Health and Patient Services (CHPS)

Performance and reliability issues – No. 1 priority of any IT organization
Human resources, staffing – responsibility for nine direct reports; managing turnover; developing leadership
Managing change
Communication – ongoing at all levels
Quotable quote: “It’s all about communication and sharing information.” – Pat McNamee, CIO

People – Behaviors and values around leadership and teamwork are paramount.
Business – Express Scripts is in a complicated business; expertise in healthcare is important.
Technology – Technical skills are very important; however, technology is a
“commodity.” (Nicholas Carr said this too!)
Quotable quote:
“We have accountability and the creation of teams that are empowered … nonbureaucratical.” – Pat McNamee, CIO

Weekly senior management meetings
Weekly meeting with Chief Operating
Officer (COO) – direct reporting line
Average CIO communication with CEO occurs five times per week – “IT matters” at Express Scripts.
Single, dedicated operations team
Teamwork underscores everything

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In nine months on the job, reduced…
Severity One “Sev 1” systems alerts – 74%
Outage minutes – 60%
How success was achieved:
1.
Dedicated Sr. Director position created to focus on supporting systems performance and reliability
2.
Changed responsibility of applications team by reallocating infrastructure ownership/accountability to new team
2.
Heavy investment in performance monitoring – “robots” provide early alerts
Lessons learned:
Goals from IT strategic plan can be achieved with proper planning, hard work, appropriate allocation of resources and team effort. IT teams can cross the “finish line,” although there are always new goals to attain in IT.

Performance and reliability of systems
Express Scripts is an organization built through acquisition
Not well architected – many diverse applications make it a challenge to sustain the platform
Aligning IT with key industry initiatives such as HIPAA
(Health Insurance Portability and Accountability Act) and
Medicare Part D (prescription drug benefit)
Huge amount of price pressure in the marketplace for pharmacy benefit management (PBM) companies
Customers have unique program requirements; differentiation affects IT
Striving for perfect systems performance

Introducing new technologies tied to industry initiatives – Example: Consumer-
Driven Healthcare
Work with technology start-up companies
(third-party vendors) to develop lowestcost, highest-reliability systems
Quotable quote:
“If IT demonstrates that systems are reliable, customers will choose us.”
– Pat McNamee, CIO

Price pressure
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Develop lower-cost solution (impacts IT spend)
Differentiate service (innovation, performance)
Client and patient service group focuses on technology component (number of calls, cost-per-call, etc.)
Industry initiatives
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Carve-In Healthcare Programs
Consumer-Driven Healthcare
Transparency
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Requires Express Scripts to develop tools that allow customers to understand the company’s programs
Evolve Web portals to let customers truly see the business

IT is all about service.
Teamwork – goal of collaboration is to make others successful
Establish trust
Develop priorities
Quotable quote:
“IT is a service organization. It is not of any value as an independent entity. Many [IT organizations] fail because they don’t identify one role … to serve.” – Pat McNamee, CIO

IT forces people to have a deeper understanding of business processes (operations, accounting, strategic planning). It’s not just about technology.
Automating processes takes leadership and industry acumen.
CIOs are not technology introverts.
Express Scripts’ IT department develops talent.
Goal of CIO is to develop staff and move people out of IT department and into other areas of the company. This “spreads expertise” (learned through IT) among the organization’s key departments.

Michael Lane 13
Chief Information Officer
Spartech Corporation
Joined the company in February 2001
General management/auditing career background
Quotable quote: “I never touch the keyboard, I am surrounded by good people.”
– Michael Lane, CIO

George Abd
President and
Chief Executive Officer (CEO)
Randy Martin
Chief Operating Officer (CFO)
CIO reports to the
CFO Michael Lane
Chief Information Officer (CIO)

Largest plastic-sheet supplier in the U.S.
45 manufacturing plants worldwide
Corporate headquarters in Clayton
25 IT employees
Year
2004
Total Company
Revenue
$1.1 Billion
Annual
IT Budget
N/A
2005 $1.4 Billion $9 Million

“Best in St. Louis”
Relaxed
Consultant-like atmosphere
25 full-time employees – small staff supports large IT program

Had upper management recognize IT as an important department in the organization
Implementation of VOIP network through out the company
Implementation of Oracle financial systems
Provide maximum support with minimum staff

Proving IT can deliver on it’s promises
Smooth implementation of the ERP project
Keeping up on cutting-edge technology

IT is “almost” a partner at Spartech.
4 years ago, IT was a “necessary evil.”

Reports to the CFO
Weekly senior management meetings
Average CIO communication with CEO occurs 2 to 3 times per week
“IT is almost a partner” at Spartech.

Oil Prices
- Largest supplier of plastic sheets in America
Healthcare Costs
- Healthcare costs are rising
China
China becoming a “major player” in the market

Don’t over promise.
Don’t jump the gun on technology.
Under promise, over deliver.
Develop an efficient team.

The leadership the position requires CIO to have
CIO is salesman
CIO has to hire good people
Loyalty is a “two-way street”

IT executives fight image of being too technical, introverted and tactical

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Santa Clara University study notes that stereotyping creates “missed organizational opportunities”
Study proposes that IT work “provides the best possible training ground for senior managers.” 14
Technical skills AND people skills are equally important

University of Dayton study found no differences between CIOs with technical backgrounds and those with general management backgrounds 15

IT innovation is important for leading companies
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CIO Magazine study found 71% of CIOs stated that innovation was a key element of their company’s business strategy
80% of respondents stated that the CIO is responsible for corporate innovation 16
More than half of 83 CIOs in the study said innovative IT ideas have increased in the past two years 17
65% of CIOs in the study said developing innovative IT ideas is a
“significant or dominant aspect of their roles.” 17
CIO should be committed to lead innovation; CEO should support optimistically for success 18
CIO should help business units identify IT new solutions 19
Smart companies partner with CIO to develop innovative ebusiness initiatives 20
CIO role defined as “teacher” or “prophet” vs. “technologist” 21

Clear communication is key. CIO should avoid
“techno-speak” and jargon 22
Organizational communication has a significant impact on:



Employee attitudes
Employee behavior
Employee perceptions about managing change 23
Quotable quote worth quoting again:
“It’s all about communication and sharing information.”
– Pat McNamee, CIO, Express Scripts

IT project delays
Staffing and user demands
Competition
Management changes
Vendors
Quotable quote:
"IT is like the CIA. Nobody knows our successes, but the failures are public knowledge."
– Shawn Schwegman, CIO, Overstock.com 24

CIOs in many organizations are challenged by internal perceptions
IT is often perceived as having a lower status than other business functions 25
Status can be defined as “recognition from the organization of the IT function’s capabilities and value.” 25
Status does matter for CIOs
Corporate culture affects status

Room for outsourcing in non-mission critical IT functions
Outsourcing should only be done on call center functions
Cognizant Technology Solutions is the latest offshore services firm to report blockbuster year-over-year growth.
- Information Weekly 11/1/2005 26

Slow economic recovery created lean IT organizations
Opportunity to determine IT effectiveness
CIOs should have metrics for determining
IT effectiveness
Consequence of not measuring IT effectiveness is corporate ambiguity and perception of the CIO “flying blind” 27

CIO role is still relevant
Important for general managers to understand this pivotal senior position
Communication, leadership, and people skills – essential to CIO success
Closing quote for discussion:
“The role of the CIO could disappear within 10 years… it’s only a matter of time until every ‘C’ level officer needs to have the same level of information as the CIO.”
-- J.P. Rangaswami, CIO, Dresdner Kleinwort
Wasserstein, at the 2005 Triple i Convention 28

1 Gomolski, Barb, “CIOs Face Identity Crisis as the ‘One-Size-Fits-All’ Job Description No Longer Fits” www.infoworld.com
, November, 27, 2000.
( www.itworld.com/career/1916/IW001127opgartner/pfindex.html
, viewed November 2, 2005).
2 Definitions = SearchCIO.com, http://searchcio.techtarget.com/sDefinition/0,,sid19_gci213620,00.html, viewed November 2005.
3 Demographs = CIO.com http://www.cio.com/archive/100104/survey.html
10/1/2004, viewed November 2005.
4 Hotjobs.com, viewed November 2005. http://hotjobs.salary.com/salarywizard/layoutscripts/swzl_compresult.asp?zipcode=&metrocode=98&statecode=CA&state=California&metro=Los+An geles&city=&geo=Los+Angeles%2C+CA&jobtitle=Chief+Information+Technology+Officer&search=&narrowdesc=IT+-
All&narrowcode=IT03&r=hotjbs_swzttsbtn_psr&p=Htjbs95&geocode=&jobcode=IT10000049&altername=Enter+search+term.
http://hotjobs.salary.com/salarywizard/layoutscripts/swzl_compresult.asp?zipcode=&metrocode=107&statecode=FL&state=Florida&metro=Miami&cit y=&geo=Miami%2C+FL&jobtitle=Chief+Information+Technology+Officer&search=&narrowdesc=IT+--
+Executive%2C+Consulting&narrowcode=IT06&r=hotjbs_swzttsbtn_psr&p=Htjbs95&geocode=&jobcode=IT10000049&altername=Enter+search+ter m http://hotjobs.salary.com/salarywizard/layoutscripts/swzl_compresult.asp?zipcode=&metrocode=34&statecode=IL&state=Illinois&metro=Chicago&city
=&geo=Chicago%2C+IL&jobtitle=Chief+Information+Technology+Officer&search=&narrowdesc=IT+--
+Executive%2C+Consulting&narrowcode=IT06&r=hotjbs_swzttsbtn_psr&p=Htjbs95&geocode=&jobcode=IT10000049&altername=Enter+search+ter m http://hotjobs.salary.com/salarywizard/layoutscripts/swzl_compresult.asp?zipcode=&metrocode=119&statecode=NY&state=New+York&metro=New+
York&city=&geo=New+York%2C+NY&jobtitle=Chief+Information+Technology+Officer&search=&narrowdesc=IT+--
+Executive%2C+Consulting&narrowcode=IT06&r=hotjbs_swzttsbtn_psr&p=Htjbs95&geocode=&jobcode=IT10000049&altername=Enter+search+ter m
5 CSA High Technology Research Database with Aerospace 2001 viewed November 2005 http://www.umsl.edu:2099/pqdweb?RQT=305&querySyntax=PQ&searchInterface=1&moreOptState=CLOSED&TS=1131598901&h_pubtitle=&h_pmi d=&clientId=45249&JSEnabled=1&SQ=+%28LSU%28%7BDEMOGRAPHICS%7D%29+OR+LSU%28%7BSOCIOLOGY%2C+DEMOGRAPHY%7D
%29%29&DBId=-
1&date=ALL&onDate=&beforeDate=&afterDate=&fromDate=&toDate=&pubtitle=&author=&FT=0&AT=any&revType=review&revPos=all&STYPE=all
&sortby=REVERSE_CHRON&searchButtonImage.x=28&searchButtonImage.y=8
6 Levinson, Meridith, “A Strong Job Market For CIOs” CIO Magazine , October 1, 2005.
7 Strassmann, Paul A., “The Cost of Short-Term CIOs” Computerworld , May 5, 2004, article reprint.
8 Darwinmagazine.com, http://64.28.79.73/learn/research/surveyreport.cfm?id=44 Viewed November 7, 2005.
9 Kolbasuk McGee, Marianne, “Help Wanted: CIOs” InformationWeek, October 24, 2005, p. 92.
10 PR Newswire, “St. Louis CIOs Forecast Increase in Third-Quarter Hiring: Survey Measures Employment Optimism Among Local Technology
Executives” June 9, 2005 (Robert Half Technology: Information Technology Hiring Index and Skills Report)
11 Interview with Glendon Schuster, CIO of Centene Corporation, interviewed in person by Eliot Lee, September 30, 2005.

12 Patrick McNamee, CIO of Express Scripts Inc., interviewed in person by Mark Guthrie, October 31, 2005.
13 Michael Lane, CIO Spartech Corporation, interviewed in person by Eliot Lee, November 4, 2005.
14 DeLisi, Peter S. and Danielson, Ron, “Thinking Styles of IT Executives and Professionals” MIT Sloan Management
Review , Summer 2002, Vol. 43, No. 4, p. 11.
15
Kwak, Mary, “Technical Skills, People Skills: It’s Not Either/Or”
MIT Sloan Management Review , Spring 2001, Vol.
42, No. 3, p. 16.
16
CIO Research Reports, “IT Enabled Innovation”
CIO.com
, April 1, 2005.
(www2.cio.com/research/surveyreport.cfm?id=86, viewed November 3, 2005).
17
Varon, Elana, “State of the CIO: Reality Check”
CIO Magazine , April 1, 2005.
18 Kuczmarski, Thomas D., “What Is Innovation? And Why Aren’t Companies Doing More of It?” Journal of Consumer
Marketing , Vol., 20, 6, 2003, pp. 536-541.
19 Leidner, Dorothy E.; Beatty, Robert C.; and Mackay, Jane M., “How CIOs Manage IT During Economic Decline:
Surviving and Thriving Amid Uncertainty” MIS Quarterly Executive , Vol 2, No. 1, March, 2003, pp. 1-14.
20 Rifkin, Glenn, and Kurtzman, Joel, “Is Your E-Business Plan Radical Enough?” MIT Sloan Management Review ,
Spring 2002, Vol 43, No. 3, pp. 91-95.
21
Nolan Norton Institute, “Say Goodbye to the CIO, Welcome to the Business Prophet”
Information Management &
Computer Security , MCB University Press , 9, 2001, pp. 123-125.
22
May, Thornton A., “Chief Information Officer ABCs”
Information Management & Computer Security, MCB University
Press , Vol. 3, 5, 1995, pp. 23-24.
23
Schraeder, Mike, “Organizational Assessment in the Midst of Tumultuous Change”
The Leadership & Organization
Development Journal , Vol. 25, 4, 2004, pp. 332-348.
24 cioupdate.com, http://www.cioupdate.com/insights/article.php/3561866, viewed November 2005 .
25 KaarstBrown, Michelle L. “Understanding an Organization’s View of the CIO: The Role of Assumptions About IT”
MIS Quarterly Executive , Vol. 4, No. 2, June 2005, pp. 287-301.
26 Information Weekly http://www.informationweek.com/showArticle.jhtml?articleID=171200304 11/1/2005, viewed
November 2005.
27 Kurien, Priya; Rhaman, Was; and Purushottam, V.S. “The Case for Re-Examining IT Effectiveness” Journal of
Business Strategy, Vol. 25, 2, 2004, pp. 29-36.
28
Riley, John, “Chief Information Officer’s Role Could Disappear ‘Within a Decade’”
Computer Weekly , 9, 2005, p. 10.

Slide 2:
1. Sylvia Steinmann, CIO, Swiss Re
2.
Aaron Gibbs, CIO, St. Augustine’s College
3. Dennis Thiebeault, CIO, Curry College
4. Cindy Stoddard, CIO, Neptune Orient Lines
5. Jane Aboyoun, CIO, Reed Business Information
6. Craig Berry, CIO, UGS
7. Beth Brigdon, CIO, Medical College of Georgia
8. Beth Roose, CIO, Pennsylvania Dept. of Transportation
9. Sam Segran, CIO, Texas Tech University
10. Terri Morgan, CIO, Railroad Retirement Board
11. Eric Jackson, CIO, Morehouse School of Medicine
12. Lee Colaw, CIO, Pacific University