CIO Executive Board
The CIO’s First 100 Days
Accelerating the Onboarding of Transitioning IT Principals
Understanding Performance Expectations
Gaining Visibility into Current Performance and Resources
Executing on Transition Initiatives
© 2005 Corporate Executive Board
CIO Executive Board Staff
Managing Director
Shvetank Shah
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Kris van Riper
CIO Executive Board
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Catalog No.: CIO1387OQD
Table of Contents
Letter from the CIO Executive Board • iv
Introduction: Confronting the Challenging IT Landscape • 1
Roles and Expectations: Identifying Decision Makers’ Perceptions of the IT Value Proposition • 13
Ford: Executive Partnering Program • 16
Organizational Assessment: Evaluating IT Effectiveness and Optimizing Organizational Design • 23
DuPont: Defining Competencies and Career Paths • 29
Iverson Financial*: Core Competency Rankings by Role • 30
DuPont: Personalized Development Plans • 35
IT Strategy Setting: Aligning with Business Goals and Prioritizing Needs • 37
Seagate Technology: Aligning IT Strategy with Corporate Goals • 39
KeyCorp: Guiding IT Architecture Principles • 42
Schlumberger: Visualizing Project Portfolio Value • 43
Texas Instruments: Ensuring Benefits Capture Across All Projects • 45
IT Strategy Execution: Realizing Operational Objectives • 47
IBM: Legacy System Sunset Project Cards • 49
Merrill Lynch: Revalidating Business Case Assumptions Midcycle • 50
Bowne: Scorecard Rollout • 56
Cemex: Data Collection and Quality Assurance • 57
Corning: Scorecard Review and Revision • 58
Corning: Facilitating Scorecard Adoption • 59
Appendix I: IT Budget Benchmarks • 61
Appendix II: Vendor Management and Outsourcing • 67
Appendix III: Diagnostic Questionnaires • 73
Order Form • 90
In-Person Research Presentations • 93
CIO Executive Board Project Support Desk • 95
* Pseudonym.
iii
© 2005 Corporate Executive Board
© 2005 Corporate Executive Board
iv
Letter from the CIO Executive Board
First and foremost, welcome to the CIO Executive Board! As a newly appointed CIO, this may be your first encounter with our services, designed
to provide best practices research and executive education to senior corporate IT leaders across every industry and around the world. Guided
continuously by member feedback, our task is to chronicle the successes and failures of those who pioneer the most innovative and potentially most
pivotal practices in IT strategy and management. We strive to capture that which is of consequence and report back to our members without bias or
commercial intent.
As we look around the corporate suite through the lens and data of our sister programs that serve CFOs, CMOs, CPOs, CTOs, and heads of Sales,
Strategy, HR, and Supply Chain, we are struck by the disproportionately high annual turnover rates among the CIO ranks. Furthermore, the
complexity of the challenges facing today’s CIOs and the criticality of IT as an enabler of business strategy have increased the scrutiny of newly
appointed CIOs, necessitating effective and rapid onboarding. To help member CIOs address this mandate to move quickly up the “learning curve,”
the CIO Executive Board conducted interviews with new and tenured CIOs, spoke with several CIO executive recruiting firms, and scoured trade
press and consulting literature.
The resulting research study, The CIO’s First 100 Days, provides a road map for the growing ranks of recently appointed CIOs to enable effective
onboarding within a new organizational setting. Specifically, as you embark on your first 100 days in seat, we hope this study will provide a toolkit
for achieving the following three objectives: 1) understanding performance expectations, 2) gaining visibility into current performance and
resources, and 3) executing on transition initiatives.
A Note on Peer Networking Opportunities
As always, we welcome your feedback and guidance on this research study. Our staff would be happy to provide additional assistance around any
of the topics or case studies included here through customized research, networking introductions, and presentations of any portion of the materials
to any audience of your choosing.
Thank you for your continued support of the CIO Executive Board.
With our warmest regards,
Shvetank Shah
Matthew Grimes
Kristin Sherwood
Jacob Carney
Sujatha Sivakumaran
Aalap Shah
Introduction
Confronting the Challenging IT Landscape
© 2005 Corporate Executive Board
1
© 2005 Corporate Executive Board
The CIO’s First 100 Days
2
The Boardroom Perspective
Amid a climate of economic recovery, many industry market leaders are emphasizing key initiatives aimed at top-line growth, relying on their CIOs to
provide the supporting technologies to enable such objectives. These companies remain cautiously optimistic that the CIO will be able to leverage existing
and future investments in information technology to support the underpinning business processes essential for growth. New CIOs, however, report
considerable obstacles during their first 100 days in seat, as they look to maximize IT’s potential.
Growth Strategies of Bellwethers Require Information Technology
Current growth strategies of leading companies…
*
• Reshape portfolio by divesting energy,
chemicals and pigments, pharmaceuticals,
specialty polymers, and fibers and polyester
businesses and acquiring or partnering in
growth areas such as agriculture and nutrition
and performance materials
• Increase share of growth from innovation
and new products
• Integrate marketing and research functions
more closely
• Globalize R&D and Sourcing
• Technical
leadership
• Services
acceleration
• Customer
focus
• Acquisition
of growth
platforms
• Globalization
• Alter business mix by exiting or reducing
presence in application software, hard-disk drive,
networking hardware, low-end printer, and retail
PC segments and increase presence in distributed
middleware, nonhardware maintenance services,
Intel-based servers, and mobile PCs
• Increase revenue in business and technology
consulting services
• Grow aggressively in emerging markets such as
China, India, Russia, and Brazil
• Increase rate of new account growth
• Focus product portfolio
on 400 leading brands down
from 1,600
• Synchronize data with
customer via Transora online
marketplace
• Consolidate manufacturing
at 150 strategic sites
• Consolidate around strategic
partners to increase
enterprise purchasing
• Deliver a high-quality, consistent
customer experience by getting
the basics right every time
• Build valued relationships
by developing a superior
understanding of customers’
needs and their relationship
preferences
• Deliver integrated banking
and wealth management advice
and solutions
Source: DuPont CEO Presentation, Sanford Bernstein Strategic Decisions Conference,
3 June 2004; www.GE.com; IBM Annual Report, 2003; Unilever Annual Report, 2003;
National Australia Bank Group Annual Report, 2003.
…cluster around a handful of key initiatives…
…that can be frustrated by a lack of continuity in IT leadership
Key Growth Initiatives at Major Corporations
Corporate Executive Board Analysis
Overcoming the Malaise
1. Business Portfolio Reconfiguration—Acquisitions and Divestitures
2. Solutions Businesses—Move from Product to Services
3. Cross-Sales
4. Geographic Expansion—The Race to China
5. Customer-Driven Innovation
* Registered trademark of E.I. du Pont de Nemours and Company, Wilmington, Del.
“CIO turnover is one of the telling symptoms of the malaise
that makes our IT less effective than its potential….The only
way to compensate for the absence of consistency in policy
and precedent is to put in place leadership in the person
of the CIO, who will steer a steady course and be able to
provide the necessary guidance for the IT organization. A
leader can accomplish that only by taking a long-term view.”
Former CIO
Consumer Packaged Goods
Company
Source: CIO Executive Board research.
Introduction: Confronting the Challenging IT Landscape
© 2005 Corporate Executive Board
3
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Challenge #1: Evolving Role Definition and Shifting Expectations
IT has experienced dramatic shifts that impact the CIO, who is now viewed as a business technology leader responsible for innovation and inculcating
business objectives into IT. As the CIO forms partnerships with the business, identification of key stakeholders in the “IT value chain” and their varied
perceptions of IT’s strategic role is a crucial step to accomplishing IT objectives. Upon arrival a new CIO must quickly uncover nuanced perceptions of IT
and the dynamic political environment in an effort to influence senior executive leadership.
CIO at a Crossroads
Charged with stewarding the company’s data, the newly appointed
CIO must quickly establish a vision for his or her role
Technology Expert
Strategic Business Partner
• Ensures consistent availability and access
to network resources
• Corporate Officer central to strategic
and operational decisions
• Leads large-scale deployments of new
technologies and systems
• Proactively provides insights into opportunities
for innovation
• Contributes to corporate energy through
process automation
• Leverages cross-functional visibility to optimize
business processes
• Minimizes costs to running Infrastructure
and Applications
• Identifies opportunities to reduce costs through
strategic sourcing and economies of scale
Reshaping the Role
“The continuing focus on transparency is reshaping the role to become Chief Information Officer versus Chief Computer Officer. In the days
of data processing directors, their role was much more focused on running the data center environment….Today, the CIO has become a clear
guardian of the information and is expected to stand for the integrity and validity of the data. Now more than ever, CIOs are being held
accountable for driving the business value…to be involved not only in strategy development but also in business and product innovation.”
Gregor Bailar
CIO
Capital One Financial Corporation
Source: Bansal, Parveen, “Why Does the CIO have So Many Hats?,”
The Banker, 1 December 2003; CIO Executive Board research.
4
Challenge #2: Misaligned Organizational Design and Competencies
Core business strategies continually shift in response to external market factors. As a result, CIOs looking to organize around core business strategies,
such as attaining lowest-cost producer status, accelerating time-to-market, or becoming more customer centric, find there is no dogmatic “end state.”
A further challenge is building a comprehensive picture of existing IT priorities and resources. Yet, to build a compelling business case for organizational
adjustments, such as revising reporting structures and altering skill requirements, new CIOs must complete a highly objective organizational assessment,
articulating a complete view of existing current strengths and weaknesses.
Organizing for Competitive Advantage
As control over IT spend
progressively consolidates at the center…
…new CIOs must reconcile diminishing returns
and trade-offs in organizational responsiveness…
Percentage of IT Spend Controlled Centrally by the Group CIO
Balancing Efficiency and Responsiveness
High
95%
88%
“Finding the Right Balance”
IT’s
Contribution
to Business
Value
50%
Efficiency
Improved Scale Contributes
to Bottom-Line Savings
Responsiveness
Reduced Flexibility Undermines
Areas of Competitive Advantage
Low
2002
2004
Low
2006(E)
Degree of IT Centralization
High
n = 45 CIOs.
n = 45 CIOs.
…while proactively building and managing the required talent portfolio for improving business–IT partnerships
Importance of IT Staff Skills to Effectively Drive Business Value
Percentage of CIO Respondents
63%
58%
52%
43%
28%
Understanding
of Company
Value Drivers
n = 76 CIOs.
Communication
Skills
Management/
Executive
Skills
Collaboration
Skills
Intellectual
Courage
9%
7%
Risk Taking
Understanding
of Emerging
Technologies
Source: CIO Executive Board surveys, 2003, 2005.
Introduction: Confronting the Challenging IT Landscape
© 2005 Corporate Executive Board
5
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Challenge #3: Large Gaps in Business Strategy Participation
Due to the IT executives’ historical focus on project execution, CIOs have struggled to gain a seat at the business strategy–setting table, getting tapped
more frequently for tactical input. As new CIOs strive to make a strategic impact on the business and prove the value of IT investments, their challenge
is compounded by a lack of exposure to existing strategy-setting processes and styles. Furthermore, the IT strategic agenda represents a new CIO’s first
major attempt to expose the executive board to a comprehensive organizational vision, influencing initial perceptions of competence.
No Seat at the Strategy Table
New CIOs desire a more leveraged role in strategic planning
to increase IT’s contribution to enterprise growth initiatives
Technology Solution Life Cycle
Business Strategy
Formation
Business Opportunity
Identification
IT Project Execution
CIO Role in Business Strategy Formation
100%
29%
34%
68%
50%
49%
Information
Resource/None
Participant
55%
50%
11%
Current
n = 81 CIOs.
55%
Leader
51%
30%
0%
Value
Measurement
CIO Role in Business Opportunity Identification
2%
100%
User Absorption
Ideal
16%
0%
Current
Ideal
Source: CIO Executive Board survey, 2005.
6
Challenge #4: IT Portfolio Risks
Concurrent with the process of aligning IT strategy with corporate objectives, the CIO must ensure successful realization of promises to reduce inefficient
IT maintenance spending and increase value-added IT solutions delivered on time and on budget. Crafting a detailed execution plan is a daunting
task for a new CIO with limited understanding of a firm’s existing IT architecture and ongoing projects’ business cases. A comprehensive execution
agenda, however, helps ensure that the CIO’s first 100 days include successful project delivery, reduced inefficient IT spending, and increased customer
satisfaction.
Risky Business
As development projects get larger and more complex…
…on-time, on-budget performance
becomes harder to achieve
Average Project Size
Function Points
Rate of Successful Project Delivery
60%
20,000
●
Project
Success 30%
Rate
Average
Project 10,000
Size
(FPs)
46%
●
32%
●
23%
●
11%
2%
0%
0
1970
1980
1990
2000
2005
●
< $750.00 K
$3.00–$6.00 M
> $10.00 M
$0.75–$3.00 M
$6.00–$10.00 M
Size of Project ($)
Source: IFPUG.
Source: The Standish Group CHAOS Survey, 2004.
The Bigger They Are
“Anything $5 million and less, we hit those out of the park all day long. We always meet deadlines and, in most cases, get that on or under budget. But the doubledigit guys, we’re at 75%. That’s not bad if you’re playing baseball, but in a culture that’s not really compassionate about defects, it’s not a good batting average.”
VP and Divisional Information Officer
International Automotive Company
Introduction: Confronting the Challenging IT Landscape
© 2005 Corporate Executive Board
7
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Outcome: Disproportionately High Turnover Rates
Previous failures of IT executives to clearly articulate and drive strategic responses to the pressing challenges impacting the corporate technology
organization have contributed to substantially high turnover rates among the CIO ranks. CIO Executive Board survey results indicate a correlated finding
that nearly half of the CIO bench maintains less than three years in role, narrowing the window of opportunity these executives have to positively impact
their businesses.
Growing Pains
Given the scale of the role’s challenges,
the CIO position is plagued by high turnover…
…and relatively short tenures
Average CIO Tenure in Role
Average Annual Turnover Rate by Position
34%
More Than
Five Years
18%
17%
48%
Fewer Than
Three Years
12%
34%
Three to
Five Years
CEOs
n = 51.
CFOs
CIOs
n = 51.
Whistling in the Dark
“Given the complexity of the IT terrain, I am little surprised at the rapid turnover rates we have experienced [in the CIO role]….Many of
these individuals bring with them an avid love for technology but fail to adapt to the business challenges of the position. Without this
business perspective to guide the investments of technology, they seemed to be whistling in the dark.”
CEO
Utilities Company
Source: CIO Executive Board survey, 2004; CIO Executive Board research.
8
Implication: Shorter Time to Move up the Learning Curve
These pressing initiatives complicate the already difficult task of senior executive onboarding by multiplying the chances of onboarding failure
and shrinking the traditional onboarding grace period. To successfully adapt to the position, CIOs must compress the learning curve, moving quickly
to master their portfolio of responsibilities and cement working relationships with key individuals.
Quick and Painless?
Pressures exacerbate traditional drivers of onboarding failure…
…while also reducing time to onboard
Drivers of Failure for Newly Appointed Executives
Current Versus Historical Grace Period for New CIO Onboarding
Failed to Build
Partnership with Peers
and Subordinates
Unclear or Confused
About Role
Expectations
New CIOs now have
a very short window
of time to move up
the learning curve…
Operating
at Full
Productivity
82%
58%
Lacked Requisite
Political Savvy
Stages in the
Starting
Path to Full to Make
Productivity Decisions
50%
Failed to Achieve
Two or Three Critical
Expected Objectives
47%
Onboarding
Completed
1 Day
Took Too Long to
Learn Job/Role
…whereas
in the past,
CIOs often had
a six-month
“honeymoon”
period to master
the challenges
of onboarding.
2 Months
4 Months
6 Months
Length of Tenure
28%
New CIO Onboarding Trajectory
Lacked Balance Between
Work and Personal Life
Historical CIO Onboarding Trajectory
25%
Source: Association of Executive Search Consultants; Centre for Creative
Leadership; Kennedy Publications; Manchester Partners International.
Source: Gabarro, John J., “When a New Manager Takes Charge,” Harvard Business Review
(May/June 1985); Hoffman, Von, “The Survivalists,” CMO Magazine (September 2004).
Pedal to the Medal
“At the end of 100 days, either I have to execute or be executed. The first 100 days should be spent observing, analyzing, and brainstorming, but after that,
actionable steps and deliverable results should be the key focus for any CIO.”
CIO
Automotive Manufacturer
Source: CIO Executive Board research.
Introduction: Confronting the Challenging IT Landscape
© 2005 Corporate Executive Board
9
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Implication: Shorter Time to Move up the Learning Curve (Continued)
Variations in background and prior professional experience largely define the ease with which executives acclimatize themselves to the CIO role. The CIO
Executive Board has created the following road map to serve as a quick reference guide, outlining the degree of onboarding difficulty relative to several
challenges faced by a new CIO. Each of these challenges is mapped to corresponding chapters and company case profiles that are designed to assist the
CIO through his or her first 100 days.
Bridging the Gap
CIOs face a relative degree of difficulty based on personal background
Degree of Difficulty with Onboarding Challenge
Mandate
Personal
Background
Understanding
the Role and
Associated
Expectations
Evaluating Current
IT Organizational
Structure and
Performance
Assessing Staff
Capabilities and
Readiness for
Change
Defining a
Business-Aligned
IT Strategy
Establishing an
Execution Agenda
for Operational
Objectives
Examining Fiscal
Requirements
and Vendor
Relationships
External Hire
with Previous CIO
Experience
Internal
Promotion from
the Technology
Organization
Internal Transfer
from a Business
Role
● High Difficulty
●◗ Medium Difficulty
Low Difficulty
Source: CIO Executive Board research.
10
Accelerating the Transition
A road map for successful onboarding
Gaining Visibility into Current
Performance and Resources
Understanding Performance
Expectations
I.
Identifying Decision Makers’
Perceptions of the IT Value
Proposition
II.
Evaluating IT Effectiveness
and Optimizing
Organizational Design
Executing on
Transition Initiatives
III.
Aligning with
Business Goals and
Prioritizing Needs
IV.
Realizing
Operational Objectives
Legacy System Sunset Project Cards (p. 49)
Executive Partnering
Program (p. 16)
Expectations Profi ling Exercise (p. 17)
IT Competency
Diagnostic Tool (p. 26)
Aligning IT Strategy with
Corporate Goals (p. 39)
Organizational Design
Diagnostic (p. 28)
Revalidating Business Case
Assumptions Midcycle (p. 50)
Business Unit Alignment Diagnostic Tool
(p. 40)
Project Cycle Time
and Cost Reduction (p. 51)
1
Best-in-Class Learning (p. 19)
Defi ning Competencies
and Career Paths (p. 29)
Guiding IT Architecture Principles (p. 42)
2
Visualizing Project Portfolio Value (p. 43)
Core Competency
Rankings by Role (p. 30)
Personalized Development Plans (p. 35)
Scorecard Development and
Life-Cycle Management Compendium
(pp. 54–55)
Scorecard Rollout (p. 56)
Ensuring Benefits Capture
Across All Projects (p. 45)
Data Collection and Quality Assurance
(p. 57)
Additional Transitioning Support
IT Budget Benchmarks
(pp. 61–66)
1
2
Vendor Management and
Outsourcing (pp. 67–72)
Registered trademark of E.I. du Pont de Nemours and Company, Wilmington, Del.
Pseudonym.
© 2005 Corporate Executive Board
Diagnostic Questionnaires
(pp. 73–89)
Scorecard Review and Revision (p. 58)
Facilitating Scorecard Adoption (p. 59)
Visit Resource Center @
www.cio.executiveboard.com
Relevant Published Research
(pp. 90–91)
Introduction: Confronting the Challenging IT Landscape
11
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Accelerating the Transition
A road map for successful onboarding
Gaining Visibility into Current
Performance and Resources
Understanding Performance
Expectations
I.
Identifying Decision Makers’
Perceptions of the IT Value
Proposition
II.
Evaluating IT Effectiveness
and Optimizing
Organizational Design
Executing on
Transition Initiatives
III.
Aligning with
Business Goals and
Prioritizing Needs
IV.
Realizing
Operational Objectives
Legacy System Sunset Project Cards (p. 49)
Executive Partnering
Program (p. 16)
Expectations Profi ling Exercise (p. 17)
IT Competency
Diagnostic Tool (p. 26)
Aligning IT Strategy with
Corporate Goals (p. 39)
Organizational Design
Diagnostic (p. 28)
Revalidating Business Case
Assumptions Midcycle (p. 50)
Business Unit Alignment Diagnostic Tool
(p. 40)
Project Cycle Time
and Cost Reduction (p. 51)
1
Best-in-Class Learning (p. 19)
Defi ning Competencies
and Career Paths (p. 29)
Guiding IT Architecture Principles (p. 42)
2
Visualizing Project Portfolio Value (p. 43)
Core Competency
Rankings by Role (p. 30)
Personalized Development Plans (p. 35)
Scorecard Development and
Life-Cycle Management Compendium
(pp. 54–55)
Scorecard Rollout (p. 56)
Ensuring Benefits Capture
Across All Projects (p. 45)
Data Collection and Quality Assurance
(p. 57)
Additional Transitioning Support
IT Budget Benchmarks
(pp. 61–66)
1
2
Vendor Management and
Outsourcing (pp. 67–72)
Registered trademark of E.I. du Pont de Nemours and Company, Wilmington, Del.
Pseudonym.
Diagnostic Questionnaires
(pp. 73–89)
Scorecard Review and Revision (p. 58)
Facilitating Scorecard Adoption (p. 59)
Visit Resource Center @
www.cio.executiveboard.com
Relevant Published Research
(pp. 90–91)
12
Roles and Expectations
Identifying Decision Makers’ Perceptions of the IT Value Proposition
Action Steps
Build Relationships: Understand business challenges and IT’s priorities by networking with business units and internal customers.
Executive Partnering Program (p. 16)
Identify Expectations: Gauge the expected mandates from the senior executive team to develop an appropriate outlook for IT.
Define Discretionary Powers: Address questions that calibrate an employer’s resolve to support IT.
Ascend the Learning Curve: Increase familiarity with the industry, business, and technology to ease transition and achieve rapid results.
Solicit Feedback: Establish formal and informal feedback to shape a CIO’s career trajectory.
© 2005 Corporate Executive Board
13
© 2005 Corporate Executive Board
The CIO’s First 100 Days
14
New CIOs responsible for understanding how the organization functions and supplying technology to optimize the business can derive valuable
information by building strong relationships with key constituencies. In an effort to learn crucial information about business strategies and technology
expectations, CIOs cannot overemphasize the importance of networking and relationship building upon entering the role. These relationships help
influence IT’s strategic vision and immediate priorities, while clarifying role expectations for the CIO.
Building Partnerships
New CIOs gain significant insight into company challenges and corporate
strategic objectives by meeting with all business units and internal customers
Critical Questions
Initial Conversations
“During my first month, I spent the largest percentage
of my time with people within the organization,
identifying personalities and relationships. With some
of the discussions, I felt like I was driving people crazy
with all of my questions, but I also talked to people
who seemed like they had never been listened to; these
people were hungry to share their issues.”
CIO
Business Services Company
“What they tell you what they need is often not what
they really need; it’s a CIO’s job to decipher what is
important to them from a business perspective and use
IT to solve it.”
CIO
Pharmaceutical Company
• What are your key issues and strategic objectives
for the coming year? Two years? Five years?
• What are the critical pain points of your job?
• What is your department’s relationship with IT?
What would be an ideal relationship?
• Do you feel comfortable and/or confident
approaching IT for support with your strategic
initiatives?
• What are your expectations for IT? Where is IT
currently not meeting your expectations?
• What are your current IT priorities? How do you
anticipate these priorities changing across the
next year?
• Do you think IT is allocating resources
appropriately to both technical and strategic
business issues?
• Are you aware of IT’s strategic plan?
Source: CIO Executive Board research.
Roles and Expectations: Identifying Decision Makers’ Perceptions of the IT Value Proposition
© 2005 Corporate Executive Board
15
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Executive Partnering Program
In order to rapidly build a solid understanding of the company’s and industry’s strategic issues and challenges (as well as build an internal network), Ford
runs an effective executive partnering program for new senior executives. This two-month program allows the CIO to “shadow” the top executives of
different business units and/or functions one week at a time and, in the process, gain visibility into firm and industry issues as well as the organization’s
informal power structure.
Shadowing Key Strategic Partners
Carefully selected senior team members from across the company…
New Executive Partnerships
President and
Chief Executive Officer
Vice Chairman
Group Vice
President,
Product
Development
and Quality
Group Vice
President,
Manufacturing
VP, Truck
Vehicle
Center
VP, Vehicle
Operations
Vice Chairman
and Chief of Staff
Group Vice
President,
Purchasing
and Ford of
Mexico
Group Vice
President,
Premier
Auto Group
Vice President and
Chief Financial Officer
Chairman and Group Vice
CEO, Ford
President,
Credit
Asia–Pacific
Operations
and
Associations
President,
Ford of
Europe, Inc.
President,
Ford South
America
Operations
Vice
President,
Business
and Product
Strategy
Process
Leadership
VP, Volvo
The new executive’s set of partners is selected to provide broad-based
learning about Ford’s key strategic issues across product lines and operations.
…provide an intensive orientation to a company’s strategic and operational issues
Illustrative Calendar, New Executive
A new executive dedicates up
to 10 hours per day shadowing
every item on the “partner’s”
agenda, including all staff and
client meetings and is frequently
called upon to contribute to
meetings and post-session
debriefings.
September 2004
October 2004
Week One “Partner”:
VP, Business and Product Strategy
Week Two “Partner”:
Group VP, Product Development and Quality
Week Five “Partner”:
VP, Truck Vehicle Center
Week Six “Partner”:
Group VP, Premier Auto Group
Week Three “Partner”:
CEO, Ford Motor Company
Week Seven “Partner”:
Group VP, Purchasing and Ford of Mexico
Week Four “Partner”:
Group VP, Manufacturing
Week Eight “Partner”:
Process Leadership Executive
Source: Ford Motor Company; Corporate Strategy
Board research; CIO Executive Board research.
16
Expectations Profiling Exercise
Striving to affect business performance, new CIOs solicit the understanding of the CFO’s and CEO’s mandate for IT. The tool presented helps identify
each of these expectations. Each executive is encouraged to fill out this form separately and then use the document for further discussion.
Your New Job Description
Gain visibility into expected mandates by networking with the senior executive team
Role of the CIO
Description
Share of the CIO's Time That Should Be Devoted to Each Role
Own View
CFO View
CEO View
The Head of IT
Coordination
IT Cost Reduction
IT centralization, simplification,
and governance and standards
%
%
%
The Business
Strategist
Value Creation
Driving business efficiency via
process optimization and digitization
%
%
%
Practical CIO
Execution Focus
Practical implementation: “Getting things done”
%
%
%
Chief Technology
Officer
Technology Futuring
Finding new technology to transform industry
%
%
%
1.
Key Priorities
for the
Coming Year
2.
3.
Source: CIO Executive Board research.
Roles and Expectations: Identifying Decision Makers’ Perceptions of the IT Value Proposition
© 2005 Corporate Executive Board
17
© 2005 Corporate Executive Board
The CIO’s First 100 Days
CIOs occasionally fail due to an overestimation of the discretionary powers ascribed to the position. While the initial impression is that information
technology is the key to success for the corporation, they only realize after assuming the position that they cannot get projects funded or that line
absorption of technology is poor. To this end, the CIO Executive Board asked IT executive recruiters to construct a list of questions for incoming CIOs
seeking to measure a potential employer’s resolve to support IT.
Defining the CIO’s Discretionary Powers
Cultural factors offer subtle cues to define IT’s discretionary power
Industry Dynamics
Q: What drives industry competition: price or functionality?
Companies that compete on price are less likely to invest in strategic information
systems.
Q: Is this company an industry leader or follower in terms of business
innovation?
Companies that lead their industries are more likely to take risks with new advanced
information systems.
Q: How quickly does change occur in this industry?
Companies that are in rapidly changing industries are more likely to adopt new
technologies and embrace new ways of doing business.
Financial Resources
Q: How is the corporation performing financially?
Many companies are simply unable to fully fund information technology.
Q: What is the size of the IT budget as a percentage of sales? Has it changed
over the past five years?
The company’s proportional spending on IT is a good indicator of the value of
technology to the company.
Q: How are capital-intensive IT projects approved?
Bottom-up funding implies a more network-intense first 100 days than top-down
funding.
Customer Priorities
Q: Who are the most important “internal customers” of IT in the company?
Manufacturing and logistics indicate cost-saving role for CIO; sales, marketing, and R&D
suggest a more strategic customer-facing agenda.
Q: Do customers view IT as merely a back-office function or as an enabler
to the business?
CIOs that operate as “business technology leaders” collaborate with the business to
create value, extend scope of the franchise, improve operational efficiencies, and reduce
costs.
Q: Does the CIO have genuine leadership responsibility for the company’s
enterprise security and risk strategy?
As a strategic partner, information technology can set and influence budgetary decisions,
policies for end users, and risk management for the company.
Senior-Level Commitment
Q: Do senior executives believe that information technology can (and should)
materially affect the company?
It is unlikely that IT can prove to be a strategic partner to the corporation without the
support of the company’s senior management team.
Q: What is the turnover rate among the senior management team?
A high turnover rate might indicate a larger corporate concern. However, if the CIO
position is the only source of executive turnover, it may be difficult for the CIO to
promote his or her agenda or break into the management “club.”
Q: Is IT mentioned in corporate communications as being critical to the
success of the company?
Public pronouncements set shareholders’ expectations for the corporation and are
generally excellent indicators of management’s commitment to information technology.
Source: Korn/Ferry; Russell Reynolds; Spencer Stuart.
18
Best-in-Class Learning
Although all new CIOs need to learn the intricacies of the business, build relationships with peers, and understand relevant technology, CIOs entering
uncharted industries or businesses face a steeper learning curve and thus need to increase their familiarity with essential technology concepts and terms.
Scaling the Learning Curve
New CIOs use various strategies to clearly understand technology
concepts, industry trends, and business intricacies
Onboarding 101
Reverse Mentoring
“I try to get up to speed in a new industry by doing a lot
of reading. I work like a dog my first 6 to 12 months,
meeting face to face with as many people as possible
for 10 or 12 hours a day, both top down and bottom up.
Then I expect to take home five or six hours of reading
a night.”
CIO
Financial Services Company
Project Support Desk
The CIO Executive Board offers assistance to new CIOs during this critical
orientation period. Members can commission short-turnaround custom
research projects from the Project Support Desk (PSD) at no additional cost.
Project Support Desk offerings include the following:
• Industry Watch—Annually published research brief detailing business and
IT trends in select industries
• Budget Watch—Quarterly summary of spending trends and predictions
• Key Findings—Research brief to address a specific member need
• Vendor Profiles—Listing of vendors within a specific market space, with
an objective description of product or services and client listing
• Networking—Targeted discussion with a peer within the membership to
discuss common challenges and lessons learned
A new CIO can leverage internal experience
by tasking high-performing individuals
with creating a targeted learning program.
A single direct report may serve as a mentor,
or several key employees can work together
to create a comprehensive training plan.
As part of this reverse mentoring relationship,
the mentor is responsible for providing the new
executive with an adequate level of generic knowledge
immediately and a more in-depth knowledge of specific
topics particularly crucial to the business and the goals
of the function. The mentoring relationship should be
confidential and objective, and it should provide the
new executive with honest and candid feedback.
As part of the relationship, the mentor should provide
the following:
Compilation of key readings to supplement
specific gaps in executive knowledge
Listing of possible executive education
courses to address CIO learning
requirements
Schedule of networking contacts to build
relationships with key individuals in the
business and IT
To commission a PSD project please visit www.cio.executiveboard.com.
Source: CIO Executive Board research.
Roles and Expectations: Identifying Decision Makers’ Perceptions of the IT Value Proposition
© 2005 Corporate Executive Board
19
© 2005 Corporate Executive Board
The CIO’s First 100 Days
20
Considering the short time frame in which new CIOs are expected to deliver results, formal and informal feedback from a variety of sources provides
valuable performance insight. Immediate and regular solicitation of feedback can help to propel and direct one’s career trajectory.
Soliciting Relevant Feedback
CIOs seek varied performance feedback…
From Whom Do You Receive Feedback Regarding Your Performance?
80%
67%
65%
55%
49%
41%
39%
37%
43% 41%
41%
Informal
31%
Formal
20%
22%
8%
Board of
Directors
6%
CEO
CFO
COO
BU Heads
Functional
Heads
External
Stakeholders
Direct
Reports
n = 51.
…to shape and focus their career trajectories
How Am I Doing?
“It was essential for me to get feedback early on in my tenure. And a lot of it. Most of the time you spend is on relationship building and
feedback; whether it is formal or informal, it is imperative to assess the circumstances of your customers, your team, and your boss. In a
sentence: ‘Your job depends on it.’”
CIO
Automotive Industry
Source: CIO Executive Board survey, 2004; CIO Executive Board research.
Roles and Expectations: Identifying Decision Makers’ Perceptions of the IT Value Proposition
© 2005 Corporate Executive Board
21
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Accelerating the Transition
A road map for successful onboarding
Gaining Visibility into Current
Performance and Resources
Understanding Performance
Expectations
I.
Identifying Decision Makers’
Perceptions of the IT Value
Proposition
II.
Evaluating IT Effectiveness
and Optimizing
Organizational Design
Executing on
Transition Initiatives
III.
Aligning with
Business Goals and
Prioritizing Needs
IV.
Realizing
Operational Objectives
Legacy System Sunset Project Cards (p. 49)
Executive Partnering
Program (p. 16)
Expectations Profi ling Exercise (p. 17)
IT Competency
Diagnostic Tool (p. 26)
Aligning IT Strategy with
Corporate Goals (p. 39)
Organizational Design
Diagnostic (p. 28)
Revalidating Business Case
Assumptions Midcycle (p. 50)
Business Unit Alignment Diagnostic Tool
(p. 40)
Project Cycle Time
and Cost Reduction (p. 51)
1
Best-in-Class Learning (p. 19)
Defi ning Competencies
and Career Paths (p. 29)
Guiding IT Architecture Principles (p. 42)
2
Visualizing Project Portfolio Value (p. 43)
Core Competency
Rankings by Role (p. 30)
Personalized Development Plans (p. 35)
Scorecard Development and
Life-Cycle Management Compendium
(pp. 54–55)
Scorecard Rollout (p. 56)
Ensuring Benefits Capture
Across All Projects (p. 45)
Data Collection and Quality Assurance
(p. 57)
Additional Transitioning Support
IT Budget Benchmarks
(pp. 61–66)
1
2
Vendor Management and
Outsourcing (pp. 67–72)
Registered trademark of E.I. du Pont de Nemours and Company, Wilmington, Del.
Pseudonym.
Diagnostic Questionnaires
(pp. 73–89)
Scorecard Review and Revision (p. 58)
Facilitating Scorecard Adoption (p. 59)
Visit Resource Center @
www.cio.executiveboard.com
Relevant Published Research
(pp. 90–91)
22
Organizational Assessment
Evaluating IT Effectiveness and Optimizing Organizational Design
Action Steps
Assess the IT Organization’s Effectiveness: Measure the competencies of the IT organization to identify opportunities for organizational
improvement.
Optimize IT Organizational Design: Assess the effectiveness of the current organizational structure to mitigate competing demands for cost
savings and responsiveness.
Define IT Skill Competencies to Align with Corporate Objectives: Determine core technical and business competencies to enable IT strategy
execution.
1
Defining Competencies and Career Paths (p. 29)
Map Skill Requirements to IT Roles: Develop a comprehensive, uniform list of IT roles and performance expectations to inventory enterprise
resource capabilities and skill gaps among existing IT staff.
2
Core Competency Rankings by Role (p. 30)
Evaluate and Benchmark IT Leadership: Assess the competencies and leadership proficiencies of the IT management team.
Drive Employee Performance and Engagement Through Development: Form individual development plans for staff to target areas of
improvement for underperformers and identify growth opportunities for high-potential employees.
Personalized Development Plans (p. 35)
1
2
Registered trademark of E.I. du Pont de Nemours and Company, Wilmington, Del.
Pseudonym.
© 2005 Corporate Executive Board
23
© 2005 Corporate Executive Board
The CIO’s First 100 Days
24
Incoming CIOs should measure the competencies of their IT organizations in order to identify and prioritize IT initiatives. The CIO Executive Board has
compiled a tool—Key Attributes of the World-Class IT Organization—which identifies 25 attributes common to the most highly effective IT organizations,
grouped into eight major areas of IT management. In addition to establishing a comprehensive, high-level view of an IT organization’s competencies, the
Key Attributes diagnostic also serves as a gateway to the CIO Executive Board’s research library by mapping relevant literature to each IT attribute.
Assessing the IT Organization’s Effectiveness
CIOs need a comprehensive framework to support strategic decision making
Strategic Priority Identification
Examine performance gaps relative to
attribute importance to set IT strategy
agenda and assign responsibilities for
short- and long-term opportunities
Attribute
CIO
Staff
Agenda Pressure-Testing
Assess differences in scores between
senior leadership and key staff (e.g., highpotential IT managers) to “pressure-test”
IT priorities
Key Attributes of the WorldClass IT Organization
Recently transitioned CIOs can use the Key Attributes
diagnostic tool as a framework to examine IT challenges.
CIO Executive Board members can use the tool in two
ways:
Individual Assessment (Online)
• Members complete an interactive, online diagnostic
survey.
• Participants receive immediate survey results online
and by e-mail, with custom links to relevant research.
Collaborative Group Exercise
• Executives can print the survey and administer it to
the IT leadership team or the entire organization.
CIO
CEO
Senior-Level Communication
Secure executive support for IT initiatives
by presenting internally assessed
performance gaps alongside benchmark
comparisons from the CIO Executive
Board membership
• Participants can request a customized report to
benchmark results.
If your organization is interested in learning more about
the diagnostic, please visit the CIO Executive Board Web
site at www.cio.executiveboard.com or contact your Account
Director.
BU Heads
Order Relevant Published Research: Key Attributes of the World-Class IT Organization (pp. 90–91)
Source: CIO Executive Board research.
Organizational Assessment: Evaluating IT Effectiveness and Optimizing Organizational Design
© 2005 Corporate Executive Board
25
© 2005 Corporate Executive Board
The CIO’s First 100 Days
IT Competency Diagnostic Tool
Key Attributes of the World-Class
IT Organization: A Competency Diagnostic
CIO Executive Board
Attributes of Interest to the CEO/CFO
1
Strategy and Planning
We chart IT’s strategic direction based on the business’s
articulated strategies.
Performance (Circle below):
1
2
3
2
3
Enterprise Architecture
We maintain an architecture
blueprint that clearly links
technology choices to business
capabilities.
5
1
2
3
4
1
5
4
5
1
2
Capabilities
Alignment Diagnostic
3
2
3
4
1
5
2
Embedded
Architectural Discipline
3
5
Portfolio Management
We help the business prioritize
projects using a defined set of
objective, weighted criteria.
Performance (Circle below):
4
5
1
Importance (Circle below):
Importance (Circle below):
3
4
Business Case Discipline
We employ a standard business
case template for all IT
investments that captures
project life-cycle costs,
benefits, and risks.
Performance (Circle below):
Performance (Circle below):
4
Importance (Circle below):
1
2
2
3
5
1
2
Project ROI
Contracts
3
6
Performance Reporting
We provide regular reports
tailored by channel and content
for specific business and IT
audiences.
Performance (Circle below):
4
5
1
Importance (Circle below):
4
Value Demonstration
We track metrics that
demonstrate IT’s contribution
to the achievement of desired
business outcomes.
2
3
Performance (Circle below):
4
5
5
1
2
Enterprise-Level
Portfolio Prioritization
3
2
1
Importance (Circle below):
4
7
3
5
1
2
Executive
Satisfaction Survey
8
Performance (Circle below):
4
5
1
Importance (Circle below):
4
Risk Management
We have created a principled
framework for assessing
relative risk and sequence risk
mitigation investments
accordingly.
2
3
4
5
1
2
Balanced Scorecard
Life-Cycle Management
3
9
Performance (Circle below):
4
5
1
Importance (Circle below):
3
Security Policies
and Standards
We have defined and
communicated a set of
enterprise information security
policies and standards.
2
3
5
1
2
Enterprise Risk
Assessment
3
10
5
1
2
3
Performance (Circle below):
4
5
4
5
1
Importance (Circle below):
4
5
1
2
Employee Awareness
Campaign
3
1
2
3
2
3
4
5
4
5
Competency
VIII. Business
Enablement
12
2
1
3
4
5
4
5
3
3
2
3
4
5
4
5
Prototype
Labs
3
4
5
4
5
Cost Transparency
Performance (Circle below):
Importance (Circle below):
1
2
We use unit-level visibility into
infrastructure cost drivers to
provide internal customers
with the ability to effectively
manage their demands.
1
2
3
4
5
4
5
Importance (Circle below):
1
Importance
5 = Critical
4 = High Priority
3 = Moderate Priority
2 = Low Priority
1 = Not a Priority
VII. Talent Management
2
3
“User-Friendly” Infrastructure
Product Catalog
13
V. Applications Delivery
and Management
VI. Vendor Management
Requirements Definition
We create alternative scenarios
of cost versus functionality for
proposed IT projects to
help business sponsors make
informed scoping choices.
Importance (Circle below):
2
2
End-to-End Asset
Management
Security Policies
and Standards
We have defined and
communicated a set of
enterprise information security
policies and standards.
Performance
5 = We Are Excellent at This
4 = We Are Good at This
3 = We Are Average at This
2 = We Are Poor at This
1 = We Are Terrible at This
Performance (Circle below):
3
IV. Infrastructure Delivery
and Management
Scoring Scale
We proactively scan for and
exploit opportunities to deploy
new technologies in support of
the business.
2
5
Performance (Circle below):
Performance (Circle below):
Performance
Importance
Technology Innovation
1
5
4
Life-Cycle Cost Efficiency
1
Please select the value (1 to 5) that best describes your IT organization using the two
grading scales provided. The top scale measures performance in each competency
and the bottom scale measures the importance of each competency.
8
1
4
User-Centric
Operational Indicators
1
Top-Down Business
Process Optimization
24
3
Importance (Circle below):
Importance (Circle below):
1
3
We effectively manage assets
across their life cycle to
maximize efficiencies.
How to Use This Diagnostic
Performance (Circle below):
1
2
Enterprise-Level Business
Continuity Planning
III. Security and Business
Continuity Planning
II. IT Performance Measurement
and Value Demonstration
I. IT Governance
Process Digitization
We employ a standard
methodology to identify
opportunities for business
process automation and
enhancement.
2
Importance (Circle below):
11
25
Availability Management
We ensure the availability of
systems based on SLAs that
consider business criticality.
Performance (Circle below):
4
Importance (Circle below):
4
Disaster Recovery and
Business Continuity Planning
We develop and regularly test
enterprise plans to ensure
continuous support of core
business processes.
Performance (Circle below):
1
2
3
4
5
4
5
Importance (Circle below):
1
2
3
Alternative Cost and
Functionality Scenarios
23
IT-Enabled Collaboration
We have created a toolkit and
a set of communities that allow
distributed staff to effectively
share information and
collaborate.
Performance (Circle below):
1
2
3
2
3
Data and Knowledge
Management
We provide the business with
accurate, timely, and required
information.
Performance (Circle below):
4
5
Importance (Circle below):
1
22
1
2
3
5
Community
Seeding
1
2
3
Performance Management
We closely link compensation
of senior IT staff to desired
outcomes such as systems
simplification or cost reduction.
Performance (Circle below):
4
5
Importance (Circle below):
4
21
1
2
3
5
One View
of the Company
1
2
3
Leadership Development
We provide high-potential IT
staff with customized training
and development plans, including formal training, rotations,
and project-based work.
Performance (Circle below):
4
5
Importance (Circle below):
4
20
1
2
3
5
Architecture Gain-Sharing
Incentive Plan
1
2
3
IT Staff Development
We provide IT staff with
transparency into role-specific
competency requirements and
opportunities for technical and
business skills development.
Performance (Circle below):
4
5
Importance (Circle below):
4
19
1
2
3
5
Personalized Leadership
Development Planning
1
2
3
Vendor Segmentation
We segment vendors based on
contract value and strategic
contribution and allocate
management resources
accordingly.
Performance (Circle below):
4
5
Importance (Circle below):
4
18
1
2
3
5
Development
Opportunity Brokering
1
2
3
16
Vendor Performance
Oversight
We utilize a metrics-based
scorecard to select and evaluate vendors based on standard
performance criteria.
Performance (Circle below):
4
5
Importance (Circle below):
4
17
1
2
3
Performance (Circle below):
4
5
Importance (Circle below):
4
5
Value-Based Vendor
Segmentation
1
2
3
Maintenance Cost
Containment
We segment our applications
portfolio based on business value to
facilitate legacy system retirement
and prioritize maintenance work.
1
2
3
5
Vendor Performance
Scorecard
1
2
3
14
Project Management
and Execution
We manage projects using a
standard methodology to meet
budget, scope, and schedule
goals.
Performance (Circle below):
4
5
Importance (Circle below):
4
15
1
2
3
Performance (Circle below):
4
5
4
5
Importance (Circle below):
4
Value-Based
Maintenance
5
1
2
3
Application Design
We reuse application
components and services to
build new functionality and
integrate existing systems.
1
2
3
4
5
4
5
Importance (Circle below):
Stage-Gated
Project Execution
1
2
3
Best-in-Breed
Component Architecture
Source: CIO Executive Board research.
26
Diagnostic Questionnaire on p. 75
In order to increase organizational transparency, simplify enterprise architecture, and leverage consolidated skills expertise, CIO Executive Board research
indicates that a growing number of companies are moving toward a centralized IT environment. Organizations have identified targeted IT responsibilities
that are suitable for centralization, including various governance activities and business-facing roles. Though centralization can enable several efficiencies,
CIOs should not overlook the potential corresponding decrease in responsiveness to the business.
Roles of the IT Center
CIOs are migrating management and coordination roles to the center across the IT value chain
Needs Analysis
“Building the
Right Things”
Implementation
and Operations
“Building Things Right”
Infrastructure Shared Service
Enterprise Architecture
Sourcing and Vendor Management
IT Strategic Planning
Leadership Development
Security and Risk Management
Traditional Roles
of the Center
Roles Migrating from
Local to Center
User Absorption
“Capturing Benefits”
Demand Management
• Proactive identification of business needs
• Focused business unit relationship management
through SLAs
Project Management Oversight
• Creation of methodologies, business cases,
templates
Resource Management
• Standardization of job descriptions,
career paths
• Matching staff with project assignments
• Skills forecasting
IT Portfolio Management
• Definition of portfolio prioritization criteria
and process
Emerging
Central Roles
Business Process Design
• Provision of methodologies and tools for business
process design
Reusable Application Services and Middleware
• Development, support, and consulting on reusable
application services and middleware
Data Architecture
• Standard definitions and formats for shared
information
• Data integrity stewardship
User Readiness
• Development of education and training
to ensure business users understand
how to use new technology
• Proactive identification of needed
investments in process change
Source: CIO Executive Board research.
Order Relevant Published Research: Achieving Responsive Scale (pp. 90–91)
Organizational Assessment: Evaluating IT Effectiveness and Optimizing Organizational Design
© 2005 Corporate Executive Board
27
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Diagnostic Questionnaire on p. 76
Organizational Design Diagnostic
Transitioning CIOs must also assess the effectiveness of their organizational structure to ensure the appropriate balance of centralized cost efficiencies
and distributed alignment with dynamic business objectives. Recognizing the importance of harmonizing business strategy with organizational structure,
the CIO Executive Board offers the following diagnostic, drawn from analysis of organizational designs at member companies.
Aligning IT Organizational Design with Business Model
Companies weigh a number of business factors in determining the structure of IT
Company is…
Business Model Attribute
Closer to
Both
Closer to
Business Diversity
Diverse business unit scale, market
environment, or product lines
0
1
2
Similar business unit scale, market
environment, or product lines
Business Strategy
Product differentiation and innovation
0
1
2
Lowest-cost provider
Pursuing divestiture or joint ventures
0
1
2
Stable or pursuing M&A or alliances
Customer facing (e-commerce and channel
enablement)
0
1
2
Primarily back office (finance, HR, and
core transactions)
Local tax and labor arbitrage
0
1
2
Global compliance
Local autonomy and entrepreneurship
0
1
2
Top-down management
Business Portfolio Stability
Role of Technology
Regulatory Focus
Corporate Culture
Subtotal
Total Score
Subtotal
=
Total Score
Representative Organizational Models
0–1
Structured Collaboration
2–7
Tiered, Mirrored Central and Regional IT
8–10
IT Shared Service and Competency Centers
11–12
Global IT Linked by Business Liaison
Order Relevant Published Research: Charting the Course for Principled IT Centralization (pp. 90–91)
Source: CIO Executive Board research.
28
Diagnostic Questionnaire on p. 77
Defining Competencies and Career Paths
To enable IT strategy execution, CIOs should examine their long-term human resources plan. IT organizations place increased value on general business
competencies including finance, procurement, communication, and leadership skills, reflecting a closer alignment with the business. DuPont adopts a
comprehensive strategic competency model to outline the Nine Critical IT Capabilities for the internal organization, detailing specific skills within the
areas of business, technology, and vendor management to support an aggressive outsourcing strategy.
Aligning Competencies with Corporate Objectives
An IT competency model defines nine key skills…
…associated with three distinct career paths
Nine Critical IT Competencies
DuPont’s IT Job Families
*
1 Business and IT Vision
Core IS Capabilities for Exploiting Information Technology
Business Systems Thinking
1 Leadership
Integrating IS/IT effort with business purpose and activity.
Business
Skills
2 Business Systems Thinking
Envisioning the business process that technology makes possible.
General Competencies
Leadership and Informed
Buying are cited as
the most important
competencies in an
outsourced environment.
3 Relationship Building
Getting the business constructively engaged in IS/IT issues.
Technology
Skills
Relationship
Building
5 Making Technology Work
Rapidly achieving technical progress—by one means or another.
Contract
Facilitation
Informed Buying
Architecture
Planning
InformedBuying
Buying
6 Informed
Managing the IS/IT sourcing strategy that meets the interests
of the business.
Vendor
Management
Skills
Leadership
4 Architecture Planning
Creating a coherent blueprint for a technical platform that responds
to current and future business needs.
Making Technology
Work
ContractFacilitation
Facilitation
7 Contract
Ensuring the success of existing contracts for IS/IT services.
2 Design of IT Architecture
Vendor Development
Contract Monitoring
ContractMonitoring
Monitoring
8 Contract
Protecting the business’s contractual position, current and future.
VendorDevelopment
Development
9 Vendor
Identifying the potential added value of IS/IT service suppliers.
3 Delivery of IT Services
* Registered trademark of E.I. du Pont de Nemours and Company, Wilmington, Del.
Source: DuPont; CIO Executive Board research.
Note: Reprinted from “Core IS Capabilities for Exploiting Information Technology” by David F. Feeny
and Leslie P. Wilcocks, MIT Sloan Management Review, Spring 1998, pp. 9-21, by permission of
publisher. Copyright © 1998 by Massachusetts Institute of Technology. All rights reserved.
Order Relevant Published Research: Strengthening the IT Leadership Bench (pp. 90–91)
Organizational Assessment: Evaluating IT Effectiveness and Optimizing Organizational Design
© 2005 Corporate Executive Board
29
© 2005 Corporate Executive Board
The CIO’s First 100 Days
30
Core Competency Rankings by Role
A comprehensive, uniform list of IT roles and performance expectations provides visibility into enterprise resource capabilities as well as potential
skill gaps among existing IT staff. After creating 35 standardized roles across the company, Iverson Financial* scored the competencies of each position
according to four key skills dimensions to express each role’s strategic business impact. For each skills dimension, the roles receive a score on a scale
of 1 to 5, to provide an objective ranking of role expectations for both individual and enterprise-wide talent assessments.
Defining Required Skills and Capabilities
*
Iverson Financial* analyzes enterprise roles for alignment with key skills dimensions
Role Competency Rankings List
*OB &AMILY
4ECHNICAL
s $EEP TECH SKILLS
s #AN SOLVE DIFlCULT TECH ISSUES
s "ROAD UNDERSTANDING OF MARKET
DIRECTION
s $EEP TECH SKILLS
s #AN SOLVE DIFlCULT TECH ISSUES
s +NOWLEDGE OF PORTION OF TECH MARKET
s 4ECH EXPERIENCEBACKGROUND
s !CTIVE SKILL SET
s "ROAD UNDERSTANDING OF MARKET
STRATEGIC DIRECTION
s !CTIVE TECH SKILLS
s #AN CODE
s .O VIEW OF BROADER TECH MARKET
s "ASIC COMPUTER SKILLS
s .OT FAMILIAR WITH TECH MARKET
"USINESS
-ANAGEMENT
!PPLICATION
$EVELOPMENT
0ROCESS ,EADERSHIP
s $EVELOP NEW PROCESS
s 0ROVIDE CHANGE VISION
s $EVELOP STRATEGIC STRUCTURE FRAMEWORK
IE MITIGATE RISKS
s $EVELOP TACTICAL METHODOLOGIES
IE IMPLEMENT AND MANAGE RISKS
s %NHANCEMAINTAIN PROCESS
s %NHANCEMAINTAIN PROCESS
s %XECUTE PROCESS
3YSTEMS
%NGINEERING
"USINESS 3YSTEMS
1UALITY !SSURANCE
$ATA 3ECURITY 2ISK
-ANAGEMENT
$ATA -ANAGEMENT
* Pseudonym.
0SEUDONYM
.ETWORK
%NGINEERING
2OLE
#4/
#!/
!PPLICATION -ANAGER
#ONTINUITY -ANAGER
)NFORMATION 2ISK -ANAGER
1UALITY -ANAGER
0ROJECT -ANAGER
2ELATIONSHIP -ANAGER
)NFRASTRUCTURE $EMAND -ANAGER
2ESOURCE -ANAGER
4ESTING -ANAGER
&INANCIAL -ANAGER
"USINESS 4ECHNOLOGY -ANAGER 2$
2ELEASE -ANAGER
+NOWLEDGE -ANAGER
4ECHNICAL !NALYST
!PPLICATION $EVELOPER
2ELEASE !NALYST
,EADING %DGE 4ECHNOLOGY $EVELOPER
5SABILITY %NGINEER
"USINESS !RCHITECT
!PPLICATION !RCHITECT
4ECHNICAL !RCHITECT
"USINESS 4ECHNOLOGY !RCHITECT 2$
)NFORMATION !RCHITECT
"USINESS !NALYST
0-/ !NALYST
&INANCIAL !NALYST
3TRESS 4ESTING
1! 4ESTER
-ETHODOLOGY !NALYST
)NFORMATION 2ISK !NALYST
#ONTINUITY !NALYST
$ATABASE !DMINISTRATOR
$ATABASE $EVELOPER
)NFRASTRUCTURE $EMAND !NALYST
4ECHNICAL
4"$
4"$
0ROCESS
,EADERSHIP
4"$
4"$
4"$
"USINESS
4"$
4"$
0EOPLE
,EADERSHIP
4"$
4"$
4"$
"USINESS
s 5NDERSTAND AND LEAD DEVELOPMENT
OF BUSINESS PRODUCTS IMPACT OF TRENDS
AND REGULATORY ENVIRONMENT
s 5NDERSTAND AND LEAD DEVELOPMENT
OF BUSINESS PRODUCTS
s &AMILIAR WITH SPECIlC AREAS ONLY
s 'ENERAL PRODUCT KNOWLEDGE
s 5NDERSTAND THE TRENDS OF THE
MARKETPLACE
s 5NDERSTAND SPECIlC BUSINESS PRODUCT
s .O VIEW OF TRENDS OF MARKETPLACE
s 5NDERSTAND BASIC lNANCIAL TERMS
0EOPLE ,EADERSHIP
s -ANAGE LARGE STRATEGIC ACTIVITIES
s $EVELOP STRATEGIC PLAN
s -ANAGE MULTIPLE TEAMS
s -ANAGE INDIVIDUAL TEAMS
s )NDEPENDENT CONTRIBUTOR WITH
OCCASIONAL TEAM LEADERSHIP
RESPONSIBILITIES
s 3ELF LED
3OURCE )VERSON &INANCIAL !PPLICATIONS
%XECUTIVE #OUNCIL RESEARCH
Source: Iverson Financial; Applications
Executive Council research.
Recent CIO Executive Board data suggest that CIOs should invest in the development and retention of a strong leadership to most effectively drive
employee discretionary effort. Compensation, by contrast, has only one-fifth the effect on employee effort as that of manager quality.
Investment in Management Leadership to
Build the High-Performance Workforce
Manager quality is five times more impactful than compensation
Average Impact of Management Strategies on Discretionary Effort
20%
19%
15%
Change in
Discretionary
Effort
9%
4%
Direct Manager
Characteristics
n = 3,564.
Organizational
Culture Traits
Day-to-Day Work
Characteristics
Learning and
Development
Opportunity
Compensation
Strategies
Source: Corporate Leadership Council research; CIO Executive Board research.
Organizational Assessment: Evaluating IT Effectiveness and Optimizing Organizational Design
© 2005 Corporate Executive Board
31
n = 800.
* Percentage of leaders selecting each item as one of the eight most important
characteristics of effective leadership at their company and level.
#L
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#H PE ND EE
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© 2005 Corporate Executive Board
The CIO’s First 100 Days
Because strong leadership is imperative to a successful IT organization, new CIOs must evaluate the competencies and leadership styles of the function’s
current management team. To assist new CIOs in understanding the most valuable leadership characteristics, the graph below presents the most
important attributes for effective IT leadership as ranked by IT staff in managerial positions.
What Leadership Characteristics Do
IT Leaders Consider Most Important?
Focus investment on the most important leadership characteristics
Leadership Characteristic Importance Scores
0ERCENTAGE
3ELECTING
0EOPLE -ANAGEMENT
-EAN 3TRATEGIC -ANAGEMENT
-EAN Order Relevant Published Research: Strengthening the IT Leadership Bench (pp. 90–91)
0ROCESS -ANAGEMENT
-EAN 0ERSONAL #HARACTERISTICS
-EAN NT
NT
IGE IDE
ELL ONF
T
)N #
/
R IG
INA
L
Source: Corporate Leadership Council Leadership
Survey; CIO Executive Board research.
32
Acknowledging the importance of strong leadership, new CIOs are tasked with maintaining or developing a robust IT leadership pipeline to ensure
continued organizational improvement and success. To help new CIOs provide staff with the most effective development opportunities, the graph below
plots 17 common development activities according to importance.
What Development Activities Do
IT Leaders Consider Most Important?
“Feedback and Relationship” is the most important category of development activity
Distribution of Importance Scores for Development Activities Among IT Leaders*
Feedback and Relationship Activities
Mean = 6.8
Experience-Based Activities
Mean = 5.7
Education-Based Activities
Mean = 5.0
10.0
8.6
Average Importance or Higher
8.0
Below Average Importance
5.9
5.4
5.2
5.1
ea
L
ing
at
M
ee
ck
to
r
ba
ed
Fe
gw
ith
in
ak
is
ec
o
t
un
of
D
ur
g
nin
g
lin
aS
d
un
ro
A
W
e
T
Am
Cr
n = 800.
* Importance scores derived from conjoint analysis, measuring the relative
importance leaders place on each activity for its development of leadership skills.
n
ou
n
tio
n
ig
re
F
N
es
or
n
gi
W
kin
or
W
C
Fo
in
g
kin
ss
tri
re
A
al
c
un
ew
kin
or
s
Bu
g
ug
n
gi
as
ine
tr
M
n-
io
ee
E
ss
ity
or
h
ut
gA
M
an
c
xe
Co
en
s
er
Pe
th
ith
gw
tin
de
h
ac
ive
ut
wi
ac
er
D
Int
e
ip
rsh
tin
g
pm
lo
ve
Pla
aM
n
t
en
tin
0.0
ew
N
s
ine
ine
of
L
Bu
ew
gN
r
hin
nc
u
La
be
um
N
ts
es
ct
ire
D
of
lity
rse
or
p
Re
ct
p
Re
ills
ire
D
of
t
en
em
ag
ua
Q
an
M
le-
P
p
eo
ills
s
ts
or
ss
e
sin
s
Bu
4.9
4.8
5.0
e
Sit
ff-
u
Co
Sk
Sk
sin
Bu
r
ina
m
Se
n
si
s
es
n
ch
Te
ills
l
ica
Sk
4.8
s
rse
u
Co
4.4
5.9 = Mean
Importance
for All
Activities
s
5.5
se
5.6
Co
ur
5.9
Sk
ills
6.2
ss
6.4
sin
e
6.6
Bu
6.9
O
Source: Corporate Leadership Council Leadership
survey; CIO Executive Board research.
Organizational Assessment: Evaluating IT Effectiveness and Optimizing Organizational Design
© 2005 Corporate Executive Board
33
© 2005 Corporate Executive Board
The CIO’s First 100 Days
34
Personalized Development Plans
Newly appointed CIOs facilitate the formation of individual development plans for staff to target areas of improvement for underperformers and identify
growth opportunities for high-potential employees. In the uncertain environment following a change in leadership, development plans also shift employee
focus toward future opportunities within the organization. DuPont’s customized development planning tools enable employees to gauge their proficiency
in required competencies for a current or desired role and generate development plans that include development priorities, a recommended learning
regimen, and suggested completion dates.
*
Fostering Motivation Through Development
Online self-assessment of competency
gaps and training activity preferences…
…generates individualized development plans
that form a “baseline” for career-path guidance
Online Competency Self-Assessment
Illustrative
IT Staff Personalized Development Plan
Illustrative
My Development Plan
Competency Self-Assessment
Staff: Scott Carney
Title: Global IT Alliance Director
Relationship Building
Proficient
Need development; add to development plan
Competency
Development Preferences
Development assignment or project
Mentoring
Course or seminar
Related courses for this capability (clicking this link
will open course description in a new window)
Executive Program in Corporate Strategy
Leadership
Making
Technology Work
Informed Buying
Related Development Opportunities
Architecture
Planning
Attend executive seminar
on corporate strategy
Assessment
Need
development
30
03
Save
Education
Opportunity
Project
Opportunity
Target
Completion Date
DuPont 101
Corporate Strategy
Course
11/30/03
✓
12/31/04
Specialty
Chemicals
E-Procurement
Need
development
✓
Business Systems Need
development
Thinking
Supply Chain
E-Learning Module
Relationship
Building
Attend executive
seminar on
corporate
Next Performance Review Date
11
Direct Manager: Robin Price
Next Review Date: November 2003
Need
development
10/31/03
Opportunity
completion
date
8/30/03
Clear Changes
Employee development
priorities
* Registered trademark of E.I. du Pont de Nemours and Company, Wilmington, Del.
“Best-mix” recommendations of
classroom and experiential development
Source: DuPont; CIO Executive Board research.
Organizational Assessment: Evaluating IT Effectiveness and Optimizing Organizational Design
© 2005 Corporate Executive Board
35
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Accelerating the Transition
A road map for successful onboarding
Gaining Visibility into Current
Performance and Resources
Understanding Performance
Expectations
I.
Identifying Decision Makers’
Perceptions of the IT Value
Proposition
II.
Evaluating IT Effectiveness
and Optimizing
Organizational Design
Executing on
Transition Initiatives
III.
Aligning with
Business Goals and
Prioritizing Needs
IV.
Realizing
Operational Objectives
Legacy System Sunset Project Cards (p. 49)
Executive Partnering
Program (p. 16)
Expectations Profi ling Exercise (p. 17)
IT Competency
Diagnostic Tool (p. 26)
Aligning IT Strategy with
Corporate Goals (p. 39)
Organizational Design
Diagnostic (p. 28)
Revalidating Business Case
Assumptions Midcycle (p. 50)
Business Unit Alignment Diagnostic Tool (p.
40)
Project Cycle Time
and Cost Reduction (p. 51)
1
Best-in-Class Learning (p. 19)
Defi ning Competencies
and Career Paths (p. 29)
Guiding IT Architecture Principles (p. 42)
2
Visualizing Project Portfolio Value (p. 43)
Core Competency
Rankings by Role (p. 30)
Scorecard Development and
Life-Cycle Management Compendium
(pp. 54–55)
Scorecard Rollout (p. 56)
Personalized Development Plans (p. 35)
Ensuring Benefits Capture
Across All Projects (p. 45)
Additional Transitioning Support
IT Budget Benchmarks
(pp. 61–66)
1
2
Vendor Management and
Outsourcing (pp. 67–72)
Registered trademark of E.I. du Pont de Nemours and Company, Wilmington, Del.
Pseudonym.
Diagnostic Questionnaires
(pp. 73–89)
Data Collection and Quality Assurance
(p. 57)
Scorecard Review and Revision (p. 58)
Facilitating Scorecard Adoption (p. 59)
Visit Resource Center @
www.cio.executiveboard.com
Relevant Published Research
(pp. 90–91)
36
IT Strategy Setting
Aligning with Business Goals and Prioritizing Needs
Action Steps
Align IT Strategy with Corporate Goals: Create an IT strategic plan to support overall business objectives and drive value through IT.
Aligning IT Strategy with Corporate Goals (p. 39)
Align IT Strategy with Business Unit Goals: Understand business unit needs and perceptions to enable responsive IT service.
Evaluate IT Architecture and Architectural Management Strategies: Ensure architecture can support future IT investments.
Guiding IT Architecture Principles (p. 42)
Establish Governance Structure Around Future IT Investments: Establish an objective prioritization framework to ensure transparency
around IT resource allocation.
Visualizing Project Portfolio Value (p. 43)
Ensure Maximum User Absorption: Incorporate change-management strategies during project implementation to ensure maximum enduser adoption of IT projects.
Ensuring Benefits Capture Across All Projects (p. 45)
© 2005 Corporate Executive Board
37
© 2005 Corporate Executive Board
The CIO’s First 100 Days
38
Aligning IT Strategy with Corporate Goals
Diagnostic Questionnaire on p. 79
Seagate Technology establishes a goal alignment workshop and a formal cascade process to more effectively translate corporate objectives into functional
and operational goals. The company creates cascaded functional goals to directly reflect strategic corporate objectives and establishes more granular
project metrics to track progress against those objectives.
Cascading Goals from CEO to Staff
Highest-level corporate objectives align directly with IT executives’ annual goals
Seagate Corporate Objectives
Illustrative
1. Growth/Profitability
Design and implement best-in-class
processes that drive revenue growth
and reduce costs
2. Technology and Time-to-Market
3. Customer Quality
Lead our industry in developing and
executing critical technologies to be first
to market
Develop best-in-class
products to meet customer’s
quality expectations
4. On Time Delivery
Achieve on time
delivery to customer
request
5. People
Cultivate a diverse, high-performing team that
attracts, develops, recognizes, and retains the
best people
Aligned CIO Goal
Illustrative
Back
Forward
Stop
!
Refresh
!
Address:
Functional Goal
Goal Description
Launch a product and
process data warehouse
for Seagate
Measures
Q2: Design in place and approval to proceed confirmed
• Develop and execute product-centric data warehouse
• Transition from multiple independent decision-support databases and tools to a single system Q2: Begin streaming data to the new data warehouse
Q4: Strategy in place for execution systems
• Begin moving decision-support features from execution systems into the new system
CIO Goal Alignment Dashboard
Back
CIO priorities
link clearly to
those of IT
direct reports.
Arrows indicate
the presence of
downward- and
upward-aligned
goals.
Forward
Stop
Refresh
!
!
Address:
Current Goals
Browse by Employee: CIO
My Goals and Tasks: Launch a product and process data warehouse for Seagate
Title
Aligned To
Due Date
Develop infrastructure strategy for EDW
VP, Infrastructure
30 Jun 04
Assess application strategy for future expansion of EDW
VP, Applications
30 Jun 04
Create legacy systems integration strategy for EDW
VP, Enterprise Systems
30 Jun 04
Improve data quality
Senior Data Manager
30 Jun 04
Director, Business
Formulate new EDW business processes
30 Jun 04
Process Management
Visit IT Strategic Planning Resource Center at www.cio.executiveboard.com
Status
On Track
On Track
Issues
Issues
Updated
30 Apr 04
14 Mar 04
10 Mar 04
20 Apr 04
On Track
09 Jan 04
Source: Seagate Technology; CIO Executive Board research.
IT Strategy Setting: Aligning with Business Goals and Prioritizing Needs
© 2005 Corporate Executive Board
39
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Business Unit Alignment Diagnostic Tool
To align IT strategy with corporate goals, IT must clearly understand business needs and perceptions. The IT–Business Alignment Diagnostic is a surveybased exercise that enables CIO Executive Board members to identify which attributes of IT process and service delivery are of top priority to business
partners and IT staff. An aggregate analysis of more than 1,850 survey responses from 28 companies identified common IT attributes where recurring
gaps exist between importance and effectiveness ratings.
Properly Aligning IT with Business Units
The CIO Executive Board tool reveals six
general areas of top priority to the business…
…and provides an opportunity for
members to obtain custom results
Business Partner Importance Versus Business Partner Effectiveness Gap
IT–Business Alignment Diagnostic
6.25
Key Strength
High Priority
Availability Management
●● Business Continuity Planning
Business Functionality
●
● Responsiveness
Technical Skills ●
End-User Support ●
● Business Case
●
Business Liaison●
Business Partner 5.25
Importance
Strategy and Planning ●
Technology Provisioning
● Security
Project Skills●
Requirements Definition
●
Risk
Management
●
● Skills Adaptation
To help recently transitioned CIOs understand business
expectations, the CIO Executive Board is pleased to offer
the IT–Business Alignment Diagnostic to CIOs as part of
your membership.
●
Data and Knowledge
Management
●
Project Delivery
Achievement
What You Will Receive
• Detailed customized report identifying high-priority
areas to increase business alignment
● Business Skills
● Financial Impact
● Vendor Alignment
● Technology Innovation
Leadership Skills
Business Case Discipline ●● ● User Training
● Communication
● Cost Transparency
Prioritization Discipline ●
●
System Adoption
Members Leverage the Diagnostic To
• Focus strategic planning efforts for IT
• Create a more informed dialogue between IT and
business partners
• Tailor IT service delivery to better reflect the needs
of the business
Average Gap
Average
Importance
● Value Demonstration
Opportunistic
Improvement
Low ROI
4.25
0.2
0.4
0.6
0.8
1.0
1 .2
What You Will Do
• Identify appropriate business partner and IT staff to
complete Web-based survey
1.4
1.6
If your organization is interested in learning more about the
diagnostic or in reserving a spot for the current quarter,
please contact your Account Director.
Effectiveness Gap
(Business Partner Importance–Business Partner Effectiveness)
n = 1,850 business partner respondents from 28 companies.
Source: CIO Executive Board IT–Business Alignment Diagnostic Database.
40
For each attribute, IT’s self-assessment of performance is higher than the corresponding business partner rating. In the chart below, the columns represent
the average attribute effectiveness ratings of business partners, while the dots represent the average attribute effectiveness ratings of IT staff. Among
attributes, the largest gaps exist in the Business Enablement and Project Design and Execution categories.
IT Overestimates Its Effectiveness
Disconnect in perceptions highlights poor communication between IT and the business
Average Effectiveness by Attribute
Business Partners Versus IT Staff
Business
Enablement
Project Design
and Execution
Governance
Service Delivery
and Management
Talent Management
and Development
Security/Reliability
IT Average: 4.98
BP* Average: 4.26
Gap: 0.72
IT Average: 4.89
BP Average: 4.25
Gap: 0.63
IT Average: 4.83
BP Average: 4.26
Gap: 0.57
IT Average: 5.14
BP Average: 4.61
Gap: 0.53
IT Average: 5.00
BP Average: 4.51
Gap: 0.49
IT Average: 5.28
BP Average: 4.95
Gap: 0.33
Highly
Effective 7.00
5.85
5.52
5.31
●
●
Effectiveness
Score
4.87 ●
●
4.71
4.40
4.07
5.16
5.15
4.12
4.87
●
4.32 4.41
5.09
●
4.70 4.77
● 4.83 4.92
4.85
● ● 4.67 ●
●
●
●
3.98
4.26
4.14 4.24
4.04
4.96 ●
●
4.84
4.27
4.59
4.28
5.21
4.24
●
5.16 5.25 ●
●
4.24
●
●
4.82 4.82
4.61
4.60
●
5.47
●
4.19
4.82
4.99
4.96
4.79 ● 4.81 ●
●
●
4.63
4.40
4.28
4.42
5.20 5.13
4.97 ● ●
● 5.19
5.07 5.04
4.48
3.95
Highly
Ineffective 1.00
t
t
t
t
t
s
y
y
g
n
n t y c y nt nt
ls
ls
ls
ls
i ng o r es ing
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e
e n i t in
n
k il k il k il k il t io
t io a li
m e cu r l a n n e m
i p l i c a t la n n t r a t I m p L ia is
n i t e l i v s ci p o p t ve m
l S c t S ss S ip S pt a
i o n u p p i ve n r a i n
v a t i o n pa r e ge m g n m
c
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it
ch
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ion o m y a e m i na n us i n
ec
g y ss Fu t Tr e M dor
n t r o j e C a s s te m e A
y P - Us Res p U
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t
inu i t y M
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k
o
g
e
t
a
l
D
g
s
n
s
B
F
d
g
s
C te e
i
y
o
z
P
L
n
l
S
o ine o ed Ve
l
i
s
m
i
n
a
S
t
R
s
o
n
i
C wl
C
e
lu
no E
ra
C ila b
ir e
ch u s
ior
ss
St Va
a
sin
ch
ss
qu
o
Te B
Pr
Te
Bu
ine
ne Av
Kn
Re
i
s
s
u
d
u
B
B
an
ta
IT Effectiveness Rating
Da
n = 3,063.
* BP = Business Partner.
Business Partners’ Effectiveness Rating
Source: CIO Executive Board IT–Business Alignment Diagnostic Database.
Order Relevant Published Research: Calibrating the Partnership (pp. 90–91)
IT Strategy Setting: Aligning with Business Goals and Prioritizing Needs
© 2005 Corporate Executive Board
41
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Guiding IT Architecture Principles
Before addressing enterprise goals through IT investments, new CIOs must first evaluate the organization’s IT architecture and architectural management
strategies. KeyCorp’s principles reflect a single overarching theme: the simplification of the technology environment as a means to an end—the creation
of a standard enterprise applications architecture and infrastructure. The net effect of these principles is to link simplicity with better, faster, cheaper IT
performance. Every resource allocation decision made by KeyCorp’s Key Technology Services group invokes the filter of these eight guiding architecture
principles.
Laying a Solid Foundation
KeyCorp elevates simplicity to a strategic goal
KeyCorp’s 2001 IT Architecture Framework
Representative Overview
Focus on Platform
Sigma
δ
1 Use of technology for
cycle-time reduction
5 Enterprise TCO
perspective
(particularly
with applications)
2 Embrace of open standards
and nonproprietary
approaches
6 Systems simplification,
code reduction,
and retirement
3 Proactive management,
high scalability, and security
Sales
B2B Infrastructure
N-Tier Middleware
eCRM Database
Business Logic
MRO
Warehouse
Web
Content
Marketplace
Legacy
Security
Messaging
Supplier
ERP
EDI/XML
Hub
Store
Fulfillment
Focus on Life Cycle
4 Standard applications
and infrastructure
*
7 Minimal package
customization
8 Culture of reuse
Campaign Management
Data Marts
Strategic Customer
Knowledge Management
Call Center
* The CIO Executive Board does not endorse or recommend technology vendors. The technologies listed here
are for illustrative purposes only and do not necessarily represent the technologies used by profiled companies.
Order Relevant Published Research: Case Studies in Enterprise Architecture Mitigation (pp. 90–91)
Source: KeyCorp; CIO Executive Board research.
42
Visualizing Project Portfolio Value
Diagnostic Questionnaire on p. 81
To ensure objective alignment of future IT spending with stated corporate and business unit objectives, new CIOs must establish a transparent
prioritization framework by which they evaluate project proposals. Schlumberger segments its IT projects into four “asset classes,” each with a unique
goal and target spending allocation, to guide the budgeting process. By quantifying both financial and strategic project benefits through project sponsor
questionnaires tailored to each of the four asset classes, Schlumberger creates a holistic view of each project’s impact on the organization.
Responsive IT Portfolio Prioritization
To enable portfolio prioritization, Schlumberger creates an
IT project portfolio with principled project categories…
…and estimates the strategic, nonfinancial value
of projects based around the following categories
Schlumberger “Asset Classes” and Target Allocations
Asset Class-Specific Value Drivers
Representative
Confer
Confercompetitive
competitive
advantage,
advantage,e.g.,
e.g.,incubating
incubating
new
newplatforms
platforms,ororresponses
responses
totocompetitors’
competitors’offerings.
offerings
Optimize
Optimizethe
theuse
use of
ofexisting
existingITITassets
assetsand
and
reduce
IT costs.
reduce
IT costs
Realize
Realizemeasurable
measurable
business
businessbenefi
benefitsts
(revenue
generation
(revenue generation
or
orcost
costsavings).
savings)
Innovation
25%
Business
Opportunity
25%
Infrastructure
40%
Mandatory
10%
Visit Portfolio Management Resource Center at www.cio.executiveboard.com
Ensure
Legal orlegal
or
regulatory
regulatory
compliance.
compliance
Innovation
Business Opportunity
•
•
•
•
Reusability across BUs
Speed of technology adoption
Competitive advantage potential
Enhancement of reputation as
technology leader
• Fit with long-term corporate
strategy
• ROI
• Potential increase in market share
• Potential to attract new customers
or facilitate new market entry
• Simplification of end-user workflow
• Improvement in speed and quality
of decision making
• Fit with short-term corporate
strategy
Infrastructure
Mandatory
Application
• ROI
• Reusability across BUs
• End-user satisfaction and urgency
• Functionality versus technology
life span
Network
• ROI
• Reusability across BUs
• Improvement to network
bandwidth, reliability, security, or
performance
•
•
•
•
•
Cost per user
Deployment velocity
Ease of use by end user
Ease of deployment
Impact on network bandwidth
and support resources
Source: Schlumberger Ltd.; CIO Executive Board research.
IT Strategy Setting: Aligning with Business Goals and Prioritizing Needs
© 2005 Corporate Executive Board
43
© 2005 Corporate Executive Board
The CIO’s First 100 Days
44
Ensuring Benefits Capture Across All Projects
Responsible for ensuring that all IT projects achieve full business case realization and maximum end-user adoption, new CIOs must institute a defined
approach for ongoing communication with all project stakeholders. Texas Instruments addresses this challenge by assigning a business readiness rating for
each project and accurately describing the engagement scope and communication level with sponsors, in addition to end-user training processes according
to the rating.
Increasing User Absorption
Level of business readiness support aligned to end-user impact
Business Readiness Life Cycle
Net Unrealized
Appreciation Scenario #2:
????? Sum Distribtution
Business
Readiness Rating
Business Readiness
Resources
High
Full-time business readiness
lead dedicated to project
Medium
1
2
Engagement Scope
3
Communications Plan
• Conduct a deep stakeholder
analysis cataloging all affected
staff
• Dedicate full-time resource
to project
• Conduct frequent in-person meetings
with steering teams to update them
on the progress and risk of the project
• Inform end users about project status
and related disruptions through targeted
e-mail updates and newsletters
• Train power users to conduct
adoption sessions for all
end users
• Develop and run training
classes for end users
• Identify project owners
and immediate end users
• Deliver routine progress reports
to steering committee
• Design an online training
module for all affected
end users
• Consult with business sponsors
and selected users on an
informal basis
• Deliver a detailed checklist to project
manager containing communications
guidelines for status and risk reporting
to stakeholders and selected users
• Deliver adoption instructions
to end users via e-mail
• Support and monitor training
Part-time involvement
in project
Low
Informal advisory role
Stakeholder
Segmentation Analysis
Rol
es
Plan
ning
Man
ager
Mar
ketin
gC
onta
Busin
ct
ess–
IT Li
aison
Des
ign
Engin
eerin
Pack
g
agin
g En
ginee
Proc
ring
ess
Engin
eerin
g
Business Unit Liaison Subject-Matter Experts
Sample Deliverables
Training Protocol
Tasks
Rolling Quarterly Forecast
S
Procure Subcontracting Capacity
A
C
R
Device Setup
I
Responsibility Assignment Key
I
R
I
R
A
R
Transition Support
S
Setup and Implementation
R
S
S
R
C
S
I
Responsible
Approver
Support
Consultant
Informed
Accountable in Status Reviews
Veto Power
Team Members
E-Mail Updates
To:
From:
Re:
All Staff
CIO
SAP Upgrade
End-User Training Modules
SAP
What You
Need to Know
Acknowledged Expert
Nonparticipant
R
Starts
Execution
R
I
I
Ship
R
C
A
S
S
S
Source: Texas Instruments; CIO Executive Board research.
Order Relevant Published Research: Achieving Responsive Scale (pp. 90–91)
IT Strategy Setting: Aligning with Business Goals and Prioritizing Needs
© 2005 Corporate Executive Board
45
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Accelerating the Transition
A road map for successful onboarding
Gaining Visibility into Current
Performance and Resources
Understanding Performance
Expectations
I.
Identifying Decision Makers’
Perceptions of the IT Value
Proposition
II.
Evaluating IT Effectiveness
and Optimizing
Organizational Design
Executing on
Transition Initiatives
III.
Aligning with
Business Goals and
Prioritizing Needs
IV.
Realizing
Operational Objectives
Legacy System Sunset Project Cards (p. 49)
Executive Partnering
Program (p. 16)
Expectations Profi ling Exercise (p. 17)
IT Competency
Diagnostic Tool (p. 26)
Aligning IT Strategy with
Corporate Goals (p. 39)
Organizational Design
Diagnostic (p. 28)
Revalidating Business Case
Assumptions Midcycle (p. 50)
Business Unit Alignment Diagnostic Tool
(p. 40)
Project Cycle Time
and Cost Reduction (p. 51)
1
Best-in-Class Learning (p. 19)
Defi ning Competencies
and Career Paths (p. 29)
Guiding IT Architecture Principles (p. 42)
2
Visualizing Project Portfolio Value (p. 43)
Core Competency
Rankings by Role (p. 30)
Personalized Development Plans (p. 35)
Scorecard Development and
Life-Cycle Management Compendium
(pp. 54–55)
Scorecard Rollout (p. 56)
Ensuring Benefits Capture
Across All Projects (p. 45)
Data Collection and Quality Assurance
(p. 57)
Additional Transitioning Support
IT Budget Benchmarks
(pp. 61–66)
1
2
Vendor Management and
Outsourcing (pp. 67–72)
Registered trademark of E.I. du Pont de Nemours and Company, Wilmington, Del.
Pseudonym.
Diagnostic Questionnaires
(pp. 73–89)
Scorecard Review and Revision (p. 58)
Facilitating Scorecard Adoption (p. 59)
Visit Resource Center @
www.cio.executiveboard.com
Relevant Published Research
(pp. 90–91)
46
IT Strategy Execution
Realizing Operational Objectives
Action Steps
Simplify Existing Systems Portfolio: Establish a set of methodologies to reduce duplicate/obsolete systems, thereby cutting maintenance
costs.
Legacy System Sunset Project Cards (p. 49)
Review Project Risks: Develop a detailed project-assessment framework to mitigate risks and prevent ROI degradation.
Revalidating Business Case Assumptions Midcycle (p. 50)
Decrease Project Cycle Time: Develop a set of disciplined implementation strategies to reduce costs and compress cycle time of large-scale IT
projects.
Ensure Continuity with Direct Reports: Engage directors of Infrastructure and Applications, diagnosing their current operational objectives.
Measure Strategy Execution: Establish performance metrics to gauge the performance of IT and track the progress of strategic initiatives.
Scorecard Rollout (p. 56)
Data Collection and Quality Assurance (p. 57)
Scorecard Review and Revision (p. 58)
Facilitating Scorecard Adoption (p. 59)
© 2005 Corporate Executive Board
47
© 2005 Corporate Executive Board
The CIO’s First 100 Days
48
Legacy System Sunset Project Cards
IT budgetary pressures coupled with complex systems architectures require new CIOs to reduce rising maintenance spending through systematic
rationalization of the existing legacy portfolios. IBM, for instance, developed a set of strategies that allowed it to reduce maintenance spending and divert
the funds to more strategic, value-added activities. As part of IBM’s annual strategic planning cycle, business process IT heads determine a sunset target
for each application and enforce timely retirement of all obsolete, redundant legacy systems.
Principled Rationalization
Cost–benefit analysis of applications produces sunsetting target and project plans…
Sunset Target-Setting Session
Sunset Project Plan
Illustrative
BU IT Strategic
Plan 2000
Corporate
CIO Staff
BU IT
Head
Sunset
Target
12%
BP IT
Head
BU and BP IT heads and corporate CIO representative review
application portfolio as part of strategic planning cycle
to identify applications for sunsetting
Sunset Project Plans
❏ Testing Application
#3
❏ Procurement
Application #4–10
❏ Intranet
Application #2
Review yields individual BU sunset targets and application
sunset project plans; assigned to project managers
…while a dedicated team monitors BU performance against commitments
Sunset Progress–Tracking Team
Monthly CIO Report Card on Sunset Progress
Illustrative
Sunset Results
BU 2
BU 1
Retired
4%
0%
Savings
$100,000
$0
BU 1 April
➤
Two CIO staff members track
compliance with application
sunset targets
Ahead of Schedule
Transparency of performance
against sunset targets incents
BU IT heads to retire systems
expeditiously
Source:
BU 2 April
➤
Below Schedule
IBM Corporation; CIO Executive Board research.
Order Relevant Published Research: Institutionalizing IT Cost Efficiency (pp. 90–91)
IT Strategy Execution: Realizing Operational Objectives
© 2005 Corporate Executive Board
49
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Revalidating Business Case Assumptions Midcyle
Diagnostic Questionnaire on p. 83
As IT’s credibility correlates directly with project success rates, many new CIOs are required to build their reputations by delivering on detailed midcycle
project—a potentially daunting task if initial business case assumptions lack support. New CIOs, therefore, can use risk as a means of continuously
revisiting those business case assumptions to ensure project success. Progressive organizations such as Merrill Lynch employ cross-functional governance
teams that oversee progress on large projects every quarter and provide an independent assessment of project risks.
Midcycle Project Risk Review
Projects over $2.5 M require reviews to determine ongoing funding…
Quarterly Project Review Process at Merrill Lynch
1a
Benefits Contract
Affirmation
1b
Risk Reassessment
2
Distressed Project
Review
3a
Recommitment
of Project Funds
Project Sponsor Contract
Costs
Costs
Initial Forecast
$1.2 M
FY 2004 Budget
Adjustment
Current Estimate
Signature
$3.5 M
$1.0 M
$3.7 M
Tom Kovack
Craig Reist
Sponsor
IT Project Manager
GO
Risk
S.C.O.R.E.
1–5
Benefits
($3.5 M)
Unused project
funds returned
to the business
FIX
3b Proactive Termination
• Revisit projects
highlighted as high risk
• Sponsor recommits to ROI
KILL
…relying on detailed risk-assessment criteria
Risk Ratings Scale Definitions
Very High Risk
1
High Risk
2
Moderate Risk
3
Low Risk
4
Very Low Risk
5
S
Scope
Management
Numerous scope changes (> 30%) Major increases in scope
impact project (functionality,
(10%–30%); major functionality
schedule, or cost)
changes
Scope changes with 5%–10%
impact on costs
Consistent history of small
changes to scope < 5% of costs
Minimal scope changes
C
Clarity of
Business
Benefits
Business benefits unquantified and Major areas of benefits quantified
not verifiable
but not verifiable
Most benefits quantified but little
confidence in benefits capture
Most benefits quantified; medium
confidence in benefits capture
Most benefits quantified;
high degree of confidence
in benefits capture
O
R
E
On-Time
Delivery
Delays > 40% of lead time for
major deliverables
Delays 20%–40% of lead time for
major deliverables
Delays 10%–20% of lead time for
major deliverables
Delays < 10% of lead time for
major deliverables
On-time delivery
Remaining on
Project Budget
Costs > 20% higher than planned
Costs 15%–20% higher than
planned
Costs 5%–15% higher than
planned
Costs up to 5% higher than
planned
On-budget delivery
Engagement
of Business
Leaders
Initiative not project owners’
primary responsibility; sporadic
business attendance at steering
committee meetings
(< 50%)
Initiative not project owners’
primary responsibility; leadership
team attends majority of steering
committee meetings
(50%–75%)
Initiative not project owners’
primary responsibility; steering
committee meeting attendance
high (75%–100%)
Initiative primary responsibility
of operations, IT, and business
owners; 75%–100% attendance
at steering committee meetings
Full-time business
operations and IT owners;
100% attendance at
steering committee
meetings
Visit IT Management Implementation Tools at www.cio.executiveboard.com
Source: Merrill Lynch; CIO Executive Board research.
50
Project Cycle Time and Cost Reduction
One of the challenges commonly cited by new CIOs is determining the tactical levers that they can use to improve cycle time and contain costs of ongoing
large IT projects, such as ERP implementation. Project-management exemplars increase project throughput by defining a set of execution strategies that
focus on priorities such as project-team efficiency, quality assurance, and business process change management across the stages of a project’s life cycle.
On Time and on Budget
Disciplined implementation strategies during the project life cycle provide improved cycle time
1
Invest in a business case around the value of unified business processes.
2
Physically relocate members of the core process team to have them work together.
3
Middle management backing is the hardest and most crucial support to get. Make this
a priority of local area teams.
5
4
5
3
Identify the ways business processes are interconnected, on an enterprise level, to manage
downstream effects of process change.
Test a day in the life of a system using production data.
7
Test integrated complete business cycles (semimonthly payroll, monthly reporting)
and transaction-based cycles (sales orders).
8
Move people around proactively, prior to go-live, to reflect the new workload distribution
from new processes.
9
Addressing the user’s grasp of new (and sophisticated) concepts should be the key change
management focus.
10 Build sustainable power user cohort with substantial influence over training and utilization
enhancement to “step up” in the go-live environment and mitigate any productivity
disruptions.
Cost Savings
7
4
Quantify the seven critical cost drivers: 1) number of customizations, 2) complexity of legacy
systems environment, 3) number of interfaces, 4) participation level of sponsors,
5) language and country versions, 6) number of users, and 7) forms and reports.
6
6
2
Cycle Compression
8
9
10
1
Planning and
Architecture
Installation
and Test
Launch and
Ongoing
Support
Stage of Life Cycle
Typical Life Cycle
Improved Life Cycle
Source: Applications Executive Council research.
Visit Project Execution Resource Center at www.cio.executiveboard.com
IT Strategy Execution: Realizing Operational Objectives
© 2005 Corporate Executive Board
51
© 2005 Corporate Executive Board
The CIO’s First 100 Days
As new CIOs move forward with IT project plans, they must take inventory of the infrastructure function’s current systems and project pipeline to ensure
the function’s resources and capabilities will fulfill the revised agenda. The Infrastructure Executive Council, a sister program to the CIO Executive
Board, provided the following checklist for the new CIO as a means of engaging the head of Infrastructure and uncovering infrastructure objectives and
effectiveness.
Competency Diagnostic:
Assessing Your Infrastructure Organization
1A
Business Linkage
Our efforts are highly
integrated into business
processes and activities,
making us a valued business
partner.
Performance (Circle below):
1
2
3
2
3
Applications Alignment
Our processes ensure transfer
of applications development
knowledge to optimize the
production environment and
vice versa.
Performance (Circle below):
4
5
Importance (Circle below):
1
1B
2
1
3
5
1
2
3
Global Coordination
We manage globally
distributed functional
infrastructure with common
goals and methodologies.
Performance (Circle below):
4
5
Importance (Circle below):
4
1C
1
2
3
5
1
2
3
Performance Reporting
We distribute concise,
actionable performance
reports to IT and business
audiences on a timely, periodic
basis.
2B
Performance (Circle below):
4
5
Importance (Circle below):
4
2A
1
2
3
5
1
2
3
2C
Performance (Circle below):
4
5
1
Importance (Circle below):
4
Business Focused
Reporting
We define performance
metrics in business terms that
serve as a shared decisionmaking platform between
infrastructure and the business.
2
3
5
1
2
3
2D
Performance (Circle below):
4
5
2
1
Importance (Circle below):
4
Resource Allocation
We actively use performance
reports to inform fact-based
decisions that optimize the
cost-performance trade-off.
3
Performance (Circle below):
4
5
1
Importance (Circle below):
4
5
1
2
3
Infrastructure
Systems Monitoring
Our automated performance
monitoring systems enable
us to quickly and effectively
identify potential problems.
2
3
5
1
2
3
3A
Performance Incentives
We motivate all levels
of infrastructure staff
through formal and informal
mechanisms to continuously
improve service delivery and
efficiency.
Performance (Circle below):
4
5
Importance (Circle below):
4
2E
1
2
3
Performance (Circle below):
4
5
1
Importance (Circle below):
4
5
1
2
3
Supplier Consolidation
Our supplier strategy is to
reduce the total number
of vendors with whom we
contract, minimizing the
number of relationships we
manage.
2
3
5
1
2
3
Vendor Segmentation
We segment vendors based on
defined criteria and allocate
vendor management resources
accordingly.
Performance (Circle below):
4
5
4
5
Importance (Circle below):
4
3B
1
1
3C
1. Cross-Functional Alignment
2. Performance Measurement and Management
3. Strategic Supplier Management
Using This Diagnostic Tool
For each objective select the values that best reflect your organization using the
two scales below. For the performance scale, rate the standard to which your
organization currently performs an activity. For importance, indicate your view of
the importance of an activity in overall infrastructure performance and in customer
value creation.
Prioritization
Our project prioritization
framework is based on
comprehensive, fact-based
criteria and anticipates
operational costs before
deploying capital.
Performance (Circle below):
1
2
3
4
5
4
5
Importance (Circle below):
1
2
3
6C
Security Architecture
We perform risk audits
across internal and external
constituencies to identify
gaps and prioritize security
investments.
Performance (Circle below):
1
2
3
Sourcing
We investigate and secure
opportunities to leverage
vendor efficiencies for
optimal scale and scope, both
internally and externally
Objective
6. Architectural Governance and Standards
6D
4
5
4
5
Performance (Circle below):
Performance
Importance
2
1
3
4
5
4
5
Importance (Circle below):
1
2
3
6B
2
3
Performance (Circle below):
2
3
2
3
4
5
4
5
Risk Monitoring
We actively monitor risks
in the supply base to avoid
potential interruption in
service delivery.
1
2
3
4
5
4
5
Importance (Circle below):
1
3D
2
3
Gain-Sharing
We align suppliers’ incentives
with our own long-term goals
through formal contract
mechanisms.
Performance (Circle below):
1
Grading Scale
Performance
5 = We are excellent at this
4 = We are good at this
3 = We are average at this
2 = We are poor at this
1 = We are terrible at this
2
3
4
5
4
5
Importance (Circle below):
1
Importance
5 = Critical
4 = High Priority
3 = Priority
2 = Low Priority
1 = My Eyes Glaze Over
4A
2
3
Cost Transparency
We maintain visibility into
unit-cost for infrastructure
services to understand
our cost drivers and
identify potential efficiency
improvements.
Performance (Circle below):
1
5. Infrastructure Operations and Service Delivery
6A
Architectural Strategy
Our architectural principles
provide flexibility while
promoting standardization to
minimize cost and complexity.
Performance (Circle below):
4
5
Importance (Circle below):
1
3
3
2
3
4
5
4
5
Importance (Circle below):
Emerging Technology
Strategy
We use a consistent decision
framework to continuously
and proactively evaluate
the adoption of emerging
technologies.
1
2
Performance (Circle below):
Importance (Circle below):
1
2
Importance (Circle below):
1
2
3
5
1
2
3
Continuity Management
We develop and regularly test
disaster recovery plans that
ensure continuous support of
core business processes.
Performance (Circle below):
4
5
1
2
3
4
5
1
2
3
5D
Availability Management
We set and manage the
availability requirements of
IT systems based on business
criticality.
Performance (Circle below):
4
5
Importance (Circle below):
Importance (Circle below):
4
5E
1
2
3
5
1
2
3
Change Management
Our institutionalized change
and configuration processes
minimize change-related
problems and business user
disruption.
Performance (Circle below):
4
5
Importance (Circle below):
4
5C
1
2
3
5
1
2
3
5A
Automation
We continuously explore
and exploit opportunities
to automate manual
infrastructure processes.
Performance (Circle below):
4
5
Importance (Circle below):
4
5B
4. Cost-Efficient Service Delivery
1
2
3
Performance (Circle below):
4
5
Importance (Circle below):
4
5
1
2
3
Order Relevant Published Research: Emerging Management Strategies for IT Infrastructure (pp. 90–91)
Process Discipline
We ensure enterprise-wide
use of repeatable, best-in-class
processes to promote high
quality service delivery.
1
2
3
5
1
2
3
Sourcing
We investigate and secure
opportunities to leverage
vendor efficiencies for
optimal scale and scope, both
internally and externally.
Performance (Circle below):
4
5
Importance (Circle below):
4
4D
1
2
3
5
1
2
3
4C
4B
Asset Management
We track and manage
hardware and software
assets deployed across the
enterprise.
5
1
2
3
4
5
4
5
5
1
2
3
3
Demand Management
We manage user demand
effectively to control total
consumption volume.
1
2
3
4
5
4
5
Importance (Circle below):
Importance (Circle below):
4
2
Performance (Circle below):
Performance (Circle below):
4
Importance (Circle below):
4
1
1
2
3
Source: Infrastructure Executive Council research.
52
In addition to diagnosing the infrastructure function, new CIOs must reach out to applications heads to uncover the function’s current objectives and
limitations and begin long-range planning. The Applications Executive Council, a sister program to the CIO Executive Board, has provided the following
diagnostic for the new CIO as a means for engaging applications executives early on in the CIO’s first 100 days.
Competency Diagnostic:
Assessing Your Applications Organization
1
Organizational
Responsiveness
We are organized to effectively
drive top-down mandates and
center-enabled standardization
while remaining agile and
responsive to business needs.
Performance (Circle below):
1
2
3
4
2
3
3
Business Case Discipline
We employ a standard business
case template for all Applications
investments that captures project
life-cycle costs, benefits, and risks
and hardwires benefits into the
budget of the business.
Portfolio Management
Our project prioritization
framework is based on
comprehensive, fact-based
criteria and revisited with enough
frequency to ensure optimal
deployment of capital.
Performance (Circle below):
Performance (Circle below):
5
Importance (Circle below):
1
2
1
2
3
4
1
5
5
1
2
3
3
Business Partnership
Our staff are highly integrated
into business processes, placing
us at the forefront of business
process redesign and making us a
valued business partner.
4
1
5
2
3
5
Stakeholder Involvement
We stress early stakeholder
involvement in the SDLC,
monitor business sponsor
commitment at every stage gate,
and have dedicated teams to
amplify business productivity and
utilization of applications.
Performance (Circle below):
4
5
1
Importance (Circle below):
Importance (Circle below):
4
2
4
2
3
5
1
2
3
Requirements
Prioritization
We evaluate and prioritize
software functionality through a
cascading analysis that quantifies
impact on business processes and
life-cycle costs.
Performance (Circle below):
4
5
1
Importance (Circle below):
4
6
2
3
5
1
2
3
Customer Satisfaction
We denominate customer
satisfaction in terms of senior
executive perceptions of value
created across the portfolio, not
just sponsor satisfaction with
individual projects.
Performance (Circle below):
4
5
2
1
Importance (Circle below):
4
7
3
5
1
2
Architectural Strategy
Our architectural principles
provide flexibility while promoting
simplification and reuse to
minimize cost and complexity.
Performance (Circle below):
4
5
1
Importance (Circle below):
4
8
2
3
4
5
1
2
3
Infrastructure Alignment
We closely coordinate with
Infrastructure colleagues to build
infrastructure compatibility into
applications and control change in
the production environment.
Performance (Circle below):
4
5
1
Importance (Circle below):
3
9
2
3
5
1
2
3
Emerging
Technology Strategy
We use a consistent decision
framework to continuously and
proactively evaluate adoption of
emerging technologies.
Performance (Circle below):
4
5
1
Importance (Circle below):
4
10
2
3
Performance (Circle below):
4
5
4
5
1
Importance (Circle below):
4
5
1
2
3
2
3
4
5
4
5
Importance (Circle below):
1
2
3
11
III. Technology
and Systems Strategy
II. Business Stewardship
I. Governance
and Prioritization
Project Effort Estimation
We make accurate and justifiable
project effort estimates, informed
by consistent applications sizing
criteria.
Performance (Circle below):
1
How to Use This Diagnostic
Staff Development
We have a career path
framework that provides our staff
with visibility into competency
requirements, opportunities
for technical and business skills
development, and mentoring to
advance their careers.
8
Competency
1
2
3
4
5
4
5
Importance (Circle below):
1
2
3
VII. Talent
Management
Performance
Management
We closely link compensation
of senior Applications staff
to desired outcomes such as
business value and customer
satisfaction.
Performance (Circle below):
2
3
4
5
4
5
2
3
4
5
4
5
2
3
2
3
Scope Volatility
We manage scope change
control via the embedding of
objective renegotiation triggers
in contracts and by transparent
visualizations of cost–functionality
trade-offs.
Performance (Circle below):
2
3
Performance
5 = We are excellent at this
4 = We are good at this
3 = We are average at this
2 = We are poor at this
1 = We are terrible at this
2
3
5
1
2
3
4
5
4
5
Importance (Circle below):
Importance
5 = Critical
4 = High Priority
3 = Moderate Priority
2 = Low Priority
1 = Not a Priority
1
2
3
13
Project Execution
We manage the SDLC using
actionable performance metrics
and project management
methodologies that enable us to
meet budget, scope, and schedule
goals.
V. Applications Development
and Maintenance
VI. Sourcing Strategy
Performance (Circle below):
1
1
22
Vendor
Competition
We engineer cost efficiency
by active competition across
multiple vendors to maximize
transparency regarding “market
pricing”.
Performance (Circle below):
4
5
Importance (Circle below):
1
5
4
2
3
4
5
4
5
Importance (Circle below):
23
1
4
Performance (Circle below):
Importance (Circle below):
1
3
IV. Project Management
Importance (Circle below):
1
3
Developer Productivity
We have an objective and
robust measure of developer
productivity.
Architectural Strategy
Our architectural principles
provide flexibility while
promoting simplification and
reuse to minimize cost and
complexity
1
2
12
Scoring Scale
24
1
1
Performance (Circle below):
Performance
Importance
Performance (Circle below):
2
Importance (Circle below):
Please select the value (1 to 5) that best describes your Applications organization
using the two grading scales provided. The top scale measures performance in each
competency, and the bottom scale measures the importance of each competency.
25
1
2
3
5
1
2
3
Resource Scalability
We are able to supplement our
internal staff by scaling skilled
external resources up or down
at will to meet dynamic business
demand.
Performance (Circle below):
4
5
Importance (Circle below):
4
21
1
2
3
5
1
2
3
Outsourcing Framework
We evaluate externalization
decisions based on a cohesive
enterprise skills map which ranks
role criticality and hedges against
dissipation of business knowledge.
Performance (Circle below):
4
5
Importance (Circle below):
4
20
1
2
3
5
1
2
3
Systems Retirement
We use a detailed road map for
systems retirement, which clearly
demarcates areas to invest in
and selectively eliminates legacy
systems over time.
Performance (Circle below):
4
5
Importance (Circle below):
4
19
1
2
3
5
1
2
3
Deployment
We have a configuration
management and release plan
with clearly assigned tasks,
responsibilities, and contingency
plans.
Performance (Circle below):
4
5
Importance (Circle below):
4
18
1
2
3
5
Order Relevant Published Research: Key Developments in the Applications Function (pp. 90–91)
1
2
3
16
Quality Assurance
We follow a documented
quality control process to
discover defects and limit their
occurrence.
Coding Standards
We establish coding standards
and enforce them to ensure that
our developers produce code
that is clear, structured, and easily
understood and maintained by
other developers.
Performance (Circle below):
4
5
Importance (Circle below):
4
17
1
2
3
Performance (Circle below):
4
5
Importance (Circle below):
4
5
1
2
3
1
2
3
5
1
2
3
Automation
We make full use of IDEs, version
control, code generation, and
integrated project management
tools to automate the applications
development and enhancement
process.
Performance (Circle below):
4
5
Importance (Circle below):
4
15
1
2
3
5
1
2
3
3
14
Risk Management
We have a comprehensive riskmanagement process that allows
us to audit and track project risks
(including risks to the business
case) throughout the SDLC.
Performance (Circle below):
4
5
4
5
Importance (Circle below):
4
2
1
2
3
4
5
4
5
Importance (Circle below):
1
2
3
Source: Applications Executive Council research.
IT Strategy Execution: Realizing Operational Objectives
© 2005 Corporate Executive Board
53
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Scorecard Development and Life-Cycle Management Compendium
Diagnostic Questionnaire on p. 85
In order to gauge IT’s performance and track the progress of operational objectives against strategic initiatives, new CIOs need to establish appropriate IT
performance metrics. The CIO Executive Board offers the following key differentiations between dashboards and scorecards. Although both dashboards
and balanced scorecards measure IT performance, the tools differ fundamentally across several key dimensions. As dashboards primarily monitor
operational indicators, scorecards reflect business priorities as dictated during IT strategy planning.
Differentiating Dashboards and Scorecards
Migrating from “in-the-moment” operational oversight to influencing strategic management decisions
IT Operational Dashboards
IT Balanced Scorecards
Purpose
Operational—Real-time performance
tracking and alerting
Analytical—Trend analysis and tracking
of strategy execution
Audience
Access generally limited to IT
management
Executive-level audience, both within
IT and the business
Metrics Tracked
Operational performance data about
a particular system or process
Performance against organizational goals
Data Collection
Process
Automated data collection, in many
cases integrated into monitored systems
Portions of required data collected,
aggregated manually
Frequency
of Data Update
Continuous
At set intervals (quarterly, annually, etc.), with
individual metrics updated at differing frequencies
Back
Forward
Stop
Refresh
Address:
Sample Metrics
• Web server uptime
• SAP availability
• Help-desk first-call
resolution rate
Order Relevant Published Research: IT Balanced Scorecards (pp. 90–91)
!
Sample Metrics
• Percentage of projects
delivering new business
functionality
• Global desktop availability
• Percentage of applications
meeting security standards
Source: CIO Executive Board research.
54
Scorecard Development and Life-Cycle Management Compendium (Continued)
Diagnostic Questionnaire on p. 86
To ensure utility and support user adoption, executives should select optimal metrics to reflect business priorities and tailor reports to the needs of the
specific audience. Based on the CIO Executive Board’s review of IT balanced scorecards collected from corporate exemplars, incoming CIOs should
consider the following six key attributes when designing an IT balanced scorecard.
Structural Attributes of the IT Balanced Scorecard Ideal
Six design principles of world-class IT balanced scorecards
1
Simplicity of Presentation
• Single page of key performance
categories and metrics
• Nontechnical language for easy
consumption by business sponsors
• Limited number of metrics (10 to 20)
2
Informed by Goals of Annual Plan
• Categories and metrics directly
linked to strategies articulated in
annual IT strategic plan
• Provides insight into ongoing
progress of strategy execution by
tracking performance against goals
3
Broad Senior-Level Ownership
• Representative cross-section
of senior IT and business leaders
involved in scorecard creation
and metrics selection
• Scorecard results are regularly
reviewed by CIO and IT and
business management
4
Clearly Defined Metrics
• Each metric has a clear definition,
agreed on by IT and the business
• Companion scorecard document
outlines metric definitions,
assumptions, and collection
methods
5
Drill-Down Capability and Metric Context
• Scorecard allows for drill down
into more granular data underlying
metrics
• Metrics annotated with source
information and contextual
explanation of variance or trends
6
Links to Individual Compensation
• Achievement of balanced scorecard
targets linked to individual
compensation of IT leadership team
$
Source: CIO Executive Board research.
IT Strategy Execution: Realizing Operational Objectives
© 2005 Corporate Executive Board
55
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Scorecard Rollout
Transitioning CIOs should view the use of IT balanced scorecards as an ongoing process rather than a discrete event. To ensure that the IT balanced
scorecard is a useful decision-making tool, exemplars regularly refresh the scorecard to 1) maintain its alignment with IT strategy, 2) take steps to help
ensure the timeliness and accuracy of scorecard data, and 3) facilitate scorecard adoption by codifying data collection roles and responsibilities and
creating template and incentives to encourage scorecard use. Bowne’s balanced scorecard implementation, part of a corporate-wide scorecard initiative,
involves seven key steps.
The IT Balanced Scorecard Life Cycle
Scorecard rollout: Bowne creates a “closed-loop” IT balanced scorecard process
1. Kick Off Training for IT Staff
• Balanced Scorecard 101 for divisional and
functional senior managers
• Initial strategy alignment and metrics
selection exercise
2. Ongoing Strategy Mapping
Bowne’s IT Balanced Scorecard Adoption Process
Illustrative
7. Scorecard Review and Revision
Process Costs
Initial consulting fees
$10,000 license fee for
software and $3,500 per year
maintenance and support costs
• CIO, CTO, and corporate officers review
scorecard every six months
• Metrics revisited annually by CTO-led group
6. Data Collection and Quality Assurance
120 person-days per year for
ongoing process management
• Data collection frequency varies by metric
based on cost of collection, the corporate
financial reporting cycle, and volatility of the
business climate
• Annual IT strategy devolved from corporate
strategy
3. Metrics Selection
4. Metrics Definition
5. Assigning Metric Ownership
Metric Brainstorming
Metric
¸
Brainstorming
¸
• Team of CTO and direct reports creates list
of metrics
• List refined by using analysis of each potential
metric’s strengths and weaknesses
• Final approval by CIO
• CTO-led team creates standard definitions
for all metrics, defines measurement
technique and data collection processes, and
outlines initiatives that must be completed to
allow tracking of metrics
• Owners assigned to each metric are
responsible for scorecard completion
• Owners report to CTO and their bonuses
are linked to their scorecard-related duties
Source: Bowne; CIO Executive Board research.
56
Data Collection and Quality Assurance
While establishing and continually updating categories and metrics are critical for the success of an IT balanced scorecard, those metrics are useless if the
underlying data are outdated or inaccurate. Exemplars define a clear collection process, designating an owner for each metric, and in some cases basing a
portion of the owner’s compensation on timely, accurate delivery of data. To help ensure scorecard data are aggregated in a timely, accurate fashion from
across its distributed operations, Cemex’s IT organization developed an eight-step process for scorecard data collection.
Routinizing Scorecard Data Aggregation
Cemex’s IT organization clearly defines roles and data collection process to ensure timely, accurate scorecard data
Cemex’s IT Balanced Scorecard Data Collection Process
Illustrative
1
Data Request
• Collection coordinator (a direct report to director
level) requests data from regional collection agents
8
2
• Four regional collection agents coordinate with local
metric experts to collect requested data
Where the Going Gets Tough
Quarterly Scorecard Presentation
“It is easy to defi ne a great model
on paper for a balanced scorecard.
However, a consistent and reliable
process for data collection and analysis
is key in order to make it work.”
• IT’s balanced scorecard is presented to CIO and IT
management quarterly by objective owners
• After presentation, scorecard is made available to IT
department
7
Scorecard Creation
• Collection coordinator aggregates data and populates
balanced scorecard template
Data Collection
Sergio J. Escobedo
IT Planning, Cemex
6
Data Analysis
• Objective owner receives and analyzes data for
assigned objective
3
Data Proofing
• Collection coordinator receives data from regional
collection agent and conducts initial accuracy check
• In case of data inaccuracies, data are sent back to
local metric experts for verification
4
Data Verification
• Local metric experts verify data and communicate
them back to collection coordinator
5
Data Finalization
• Collection coordinator receives final data and passes
them to objective owner
Source: Cemex; CIO Executive Board research.
IT Strategy Execution: Realizing Operational Objectives
© 2005 Corporate Executive Board
57
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Scorecard Review and Revision
While offering a snapshot of IT’s current performance, the IT balanced scorecard can also help CIOs and business decision makers track IT performance
over time. This requires a sustained commitment by IT management, including the review of the scorecard on an ongoing basis to align scorecard metrics
with changing business goals and strategies, and the creation of a process to help drive adoption of the scorecard to all levels of the IT organization. To
maintain the continued viability of its IT balanced scorecard, Corning adapts it to keep pace with shifting business and IT strategies through an annual
series of three senior IT leader meetings.
Ensuring Continued Scorecard
Comparability and Relevance
Corning adjusts its IT strategy and metrics to respond to the changing business environment…
Objectives and Metrics for Financial Performance Category of Corning’s IT Balanced Scorecard
2000–2003
As corporate business strategies change in
response to external economic factors…
2000
…metrics that are retained in the scorecard change
weighting based on changing business priorities…
2001
…and new metrics are added
to reflect new demands on IT.
2002
2003
Objective Maximize the value of dollars invested Complete, commit to, and communicate a
Today’s reality—conserve cash, return
in IT
comprehensive IT strategy for identified organization to profitability, protect the future
Support the company’s strategy at a
significantly lower cost
Metrics
• Meet commitments for worldwide
IT cost (150)
• Updated and integrate unit IT
strategies (100)
• Contribution to business cost
and revenue objectives (100)
• Percentage core service offerings
at benchmark (50)
• Percentage IT spend in application
development (50)
• Variance to global IT budget (50)
• Identified business/functional units have an IT
strategy (125)
• Contributions to business profit objectives
(75)
• Percentage IT planned spending in application
development (50)
• Performance to spending
targets (90)
• Strengthen IT strategies (160)
…while migrating from lagging to leading measures at the level of individual metrics
Operational Performance Metrics of Corning’s IT Balanced Scorecard
2000–2003
Metrics focus on performance of systems
that have already been deployed.
Forward-looking operational expectations
are added to existing metrics.
2000
Operational • Application availability (100)
Performance • Percentage core infrastructure
Metrics
offerings achieving commitments
(100)
2001
Measures of customer feedback are added
to proactively improve service offering.
Metrics focus on pre-deployment systems
planning to avoid potential future problems.
2002
2003
• Application availability (100)
• Percentage of service commitments
• Percentage core infrastructure offerings achieving
met (150)
commitments (75)
• Implement customer feedback
• IT expectations established for Corning employees (75) process and system (100)
• Strengthen and expand
processes to plan and
coordinate work (250)
Source: Corning; CIO Executive Board research.
58
Facilitating Scorecard Adoption
Corning ensures a sustainable IT balanced scorecard by creating a customizable template and linking scorecard use to individual compensation, thus
driving scorecard adoption throughout all levels of the IT organization. The corporate scorecard’s four categories are evenly weighted for purposes of
incentive compensation, and while each functional or business unit–based IT organization must use the corporate-standard balanced scorecard template,
they are free to alter the category weightings as they see fit to determine their functional or business unit–level incentive payouts.
Making the Scorecard Relevant to All of IT
To facilitate scorecard adoption, Corning creates
a tiered system of customizable scorecards
for each functional and business unit IT group…
Enterprise-Level IT
Balanced Scorecard
Financial Performance
25%
Project Performance
25%
Operational Performance
25%
Talent Management
25%
Infrastructure Services
Scorecard
Enterprise-level IT
scorecard is fed by
functional and business
unit IT scorecards.
2003 Scorecard Performance “Odometer” for Talent Management
Illustrative
Talent Management
Objective: Effectively transition the workforce to new model
Max. = 100 miles
By the end of February 2002, each unit CIO and the IT shared
services leader will have a transition plan for their employees.
The corporate
scorecard weights all
categories equally.
All units meet their plan, some late
60 miles
All unit meet their plan
80 miles
All units meet their plan, some early
Clearly defined
performance
targets are
linked with value
to individual.
100 miles
These measures will be confirmed by a random survey
of employees taken Q2, Q3, and Q4
Display Technologies
Scorecard
Financial Performance
30%
Financial Performance
25%
Project Performance
30%
Project Performance
35%
Operational Performance
20%
Operational Performance
15%
Talent Management
20%
Talent Management
25%
A set of core metrics
is required at business
unit/functional level,
but units/functions
can add supplemental
metrics.
…and makes a substantial portion of bonus compensation
contingent on achievement of scorecard goals
Business units
and functions use
corporate template
sbut can weight
each category as
they see fit.
Objective: Meet employees’ learning plans
Max. = 150 miles
Each unit CIO will count the total number of learning plan items
on 2003 Learning Plans and measure achievement of those
plans. All will use the following definitions of success:
a. 88% of learning plan items met
90 miles
b. 94% of learning plan items met
120 miles
c. 100% of learning plan items met
150 miles
Total Actual/Possible
230/250 miles
Bonus
compensation
of 200 IT
employees is
dependent to
varying degrees
on “odometer
mileage” of
corporate
balanced
scorecard.
Source: Corning; CIO Executive Board research.
IT Strategy Execution: Realizing Operational Objectives
© 2005 Corporate Executive Board
59
© 2005 Corporate Executive Board
The CIO’s First 100 Days
60
Appendix I
IT Budget Benchmarks
Recent IT Spending Trends (p. 63)
IT Spending by Industry (p. 64)
IT Budget Allocations (p. 65)
Cost-Containment Checklists (p. 66)
© 2005 Corporate Executive Board
61
© 2005 Corporate Executive Board
The CIO’s First 100 Days
62
CIOs in transition are charged with directly supporting the corporate growth strategy—aspirations to increase top-line revenue while driving down
operational costs. As CIOs increase control over IT spend and architecture, newly appointed senior IT executives must very quickly uncover the inner
workings of the typically complex IT budget to ensure responsible investment and cost-cutting decisions. By reviewing industry benchmarking data on IT
budgets, new CIOs can obtain a quick gauge on industry spending priorities.
Recent IT Spending Trends
Percentage of IT Spend Controlled Centrally by the Group CIO
2003–2005 Increase in IT Spending
Percentage of Growth from Previous Year
95%
88%
4.25%
3.00%
2.50%
50%
2002
2006(E)
2006
2004
2003
= 45 CIOs.
2004
2005
= 225 CIOs.
Innovative Technologies Driving Increases in 2005 IT spending
Percentage of Respondents Who Intend to Increase Spend on Each Technology
49%
38%
Wireless
Workforce
Collaboration Tools
32%
Storage
Virtualization
28%
Corporate
Performance/
Business Intelligence
27%
Blade
Servers
27%
Voice
Over
over IP
25%
22%
19%
RFID
Technologies
Unified
Messaging
Web Services/
Component
Architecture for
Applications
= 225 CIOs.
Source: Author unknown, “InformationWeek 500,” InformationWeek (20 September 2004); Togut, David
and Evan Bloomberg, “Morgan Stanley CIO Survey Series: Release 5.0,” Morgan Stanley Equity
Research (15 December 2004); CIO Executive Board survey, 2003.
Appendix I: IT Budget Benchmarks
© 2005 Corporate Executive Board
63
© 2005 Corporate Executive Board
The CIO’s First 100 Days
IT Spending by Industry
2004 IT Spending by Industry
As a Percentage of Revenue
2004 IT Spending per FTE by Industry
In Thousands of U.S. Dollars
9%
Banking & Financial Services
6%
Biotech & Pharmaceuticals
5%
Telecommunications
4%
4%
Information Technology
Consulting & Business Services
3%
3%
3%
3%
3%
Media & Entertainment
Logistics & Transportation
Insurance
Health Care & Medical
Electronics
2%
2%
2%
2%
2%
2%
2%
Retail: Speciality
Manufacturing
Hospitality & Travel
Energy & Utilities
Consumer Goods
Chemicals
Automotive
Retail: General
Metals & Natural Resources
Distribution
Construction & Energineering
Overall
= 500 companies.
$28.0
Insurance
Biotech & Pharmaceuticals
Energy & Utilities
Telecommunications
Chemical
Distribution
Automotive
Electronics
Information Technology
Health Care & Medical
Media & Entertainment
Retail: Speciality
Manufacturing
Consumer Goods
Logistics & Transportation
Construction & Energineering
1%
1%
1%
1%
$44.6
Banking & Financial Services
Retail: General
Metals & Natural Resources
Hospitality & Travel
Consulting & Business Services
3%
Overall
$21.6
$15.9
$13.6
$7.9
$7.5
$7.3
$6.3
$6.2
$5.8
$5.5
$4.8
$4.7
$4.6
$4.3
$4.0
$3.2
$2.7
$1.4
$1.0
$9.6
= 500 companies.
Source: Author unknown, “InformationWeek 500,” InformationWeek
(20 September 2004); CIO Executive Board research.
64
IT Budget Allocations
2003–2004 IT Budget Categories
As a Percentage of IT Budget
2004 IT Budget Allocations by Industry
As a Percentage of Total IT Budget
33%
Salaries
Benefits
Salaries
and& Benefi
ts
32%
20%
Applications
21%
16%
New
Product
& Technology
New
Product
and
Purchases, e.g
Purchases,
e.g.,Hadrware
Hardware
16%
15%
IT Consulting
and
IT Consulting
& Outsourcing
Outsourcing
14%
13%
Other
13%
3%
R&D
3%
2004
2003
Industry
Salaries Apps Hardware Services Other R&D
Automotive
32%
18%
16%
19%
12%
3%
Banking & Financial Services
30%
22%
18%
15%
13%
2%
Biotech & Pharmaceuticals
34%
10%
10%
24%
16%
6%
Chemicals
28%
17%
20%
18%
14%
3%
Construction & Engineering
34%
21%
18%
13%
9%
5%
Consulting & Business Services
31%
23%
15%
11%
17%
3%
Consumer Goods
37%
19%
14%
14%
14%
2%
Distribution
44%
15%
17%
7%
14%
3%
Electronics
35%
22%
14%
13%
13%
3%
Energy & Utilities
36%
17%
15%
18%
12%
2%
Health Care & Medical
31%
21%
19%
14%
11%
4%
Hospitality & Travel
36%
19%
15%
15%
11%
4%
Information Technology
33%
20%
19%
13%
11%
4%
Insurance
39%
20%
13%
12%
13%
3%
Logistics & Transportation
31%
22%
16%
13%
15%
3%
Manufacturing
36%
18%
17%
13%
13%
3%
Media & Entertainment
28%
21%
13%
15%
21%
2%
Metals & Natural Resources
36%
21%
16%
10%
15%
2%
Retail: General
27%
22%
21%
12%
11%
7%
Retail: Speciality
30%
23%
23%
11%
10%
3%
Telecommunications
27%
25%
13%
22%
11%
2%
= 500 companies.
Source: Author unknown, “InformationWeek 500,” InformationWeek
(20 September 2004); CIO Executive Board research.
Appendix I: IT Budget Benchmarks
© 2005 Corporate Executive Board
65
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Recognizing that the nature and magnitude of cost-savings opportunity will vary greatly depending on the circumstances and cost structure of each
organization, the Infrastructure Executive Council and the Applications Executive Council sought to provide the new CIO with a structured list of costsavings tactics that cover the primary expenditures in the infrastructure and applications functions. These checklists can be used by the CIO in his/her
first 100 days to engage direct reports in identifying cost-cutting opportunities.
Cost-Containment Checklist
Taxonomy of Infrastructure Cost-Containment Activities
Budget Item
Demand
Levers
Twenty percent
of overall
infrastructure
budget*
Supply Levers
Cost-Savings Lever
Capital Expenses
Operating Expenses
End-User Computing Data Centers Network and Telecom Internal Staff Leases and Licenses External Services Basic Services
Platform Standardization,
Commoditization, and Consolidation
Process Standardization
Technology-Driven Efficiencies
Vendor Management
Strategic Sourcing
Usage Visibility
Needs-Based Segmentation
Procurement Controls
Eighty percent
of overall
infrastructure
budget*
Taxonomy of Applications Cost-Containment Activities*
Nondiscretionary
Budget Item
Supply Levers
Cost-Savings Lever
Demand Levers
Sixty percent
of overall
applications
budget*
Administration/
Overhead
End-User
Support
Applications
Maintenance
Process Standardization
Strategic Sourcing
Systems Retirement
IT Asset Management
Chargebacks
Portfolio Prioritization
Demand Forecasting
Project/Resource Planning
Needs-Based Segmentation
* Using survey data collected by the Corporate Executive Board and other research organizations,
this checklist illustrates a prototypical IT budget. While substantial variations exist among IT budgets,
the IT budget breakdown provides a useful framework for baseline comparison and prioritization.
Mandatory
Compliance
Discretionary
New Development
Enhancement and
Vendor Management
Testing/QA
Forty percent
of overall
applications
budget*
Source: Infrastructure Executive Council research;
Application Executive Council research.
66
Appendix II
Vendor Management and Outsourcing
Coordinate Asset-Management and Vendor-Management Strategies: Practice asset management to control IT costs, maximize the use
of existing IT equipment, and improve the maintenance of IT assets.
End-to-End Asset Management (p. 69)
Establish Prioritized Vendor-Management Program: Define segmentation practices and vendor oversight processes to maximize negotiation
leverage and minimize ongoing coordination costs.
Value-Based Vendor Segmentation (p. 70)
Monitor Vendor Performance: Define objective performance metrics to ensure continuous vendor improvement.
Metrics-Based Performance Scorecards (p. 71)
Evaluate Sourcing Strategy: Determine the benefits and risks for externalizing work.
* Global Sourcing Feasibility Matrix (p. 72)
* Pseudonym.
© 2005 Corporate Executive Board
67
© 2005 Corporate Executive Board
The CIO’s First 100 Days
68
End-to-End Asset Management
Diagnostic Questionnaire on p. 88
As most large organizations find themselves with a legacy of decentralized purchasing, new CIOs grapple with identifying effective asset-management
practices to control IT costs, maximizing the use of existing IT equipment and improving the maintenance of IT assets. Wyeth addresses this issue
by maintaining an enterprise portal that provides a real-time view of the firm’s asset inventory, assisting with IT–asset procurement decisions.
A Real-Time View
Wyeth follows a comprehensive, cross-functional process to optimize asset life cycles
2
1
5
Redeployment
Tagging and Delivery
30420
9127
BU Request
Back
Forward
Stop
!
Refresh
Address:
Existing equipment is reassigned by IT
Operations
3
Desktop Standards
Deskpro EN 866
$810, Available
Item tagged, delivered, and databases
updated
Procurement
PO
Desktop Inventory
Warehoused
Purchase order issued for standard
items not in inventory
In Use
4a New Standard Development
4b
Enterprise Negotiation
Sales
MRO
B2B Infrastructure
N-Tier Middleware
eCRM Database
Web
Content
Security
Messaging
Supplier
ERP
EDI/XML
Hub
Business Logic
Marketplace
Legacy
BU manager reviews IT asset database
for item availability and standards
Store
Warehouse
Fulfillment
Campaign Management
Data Marts
Strategic Customer
Knowledge Management
Gaps in architecture prompts due
diligence for new standard
Order Relevant Published Research: Strategic Vendor Management and Outsourcing (pp. 90–91)
Call Center
New standard used as basis for enterprise
deal
Source: Wyeth; CIO Executive Board research.
Appendix II: Vendor Management and Outsourcing
© 2005 Corporate Executive Board
69
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Value-Based Vendor Segmentation
Increased reliance on externally provided IT products and services has led to a consequent rise in vendor-based dependency risks. New CIOs are therefore
responsible for overseeing a multisourcing environment, defining practices and processes to maximize the organization’s negotiation leverage and
minimizing ongoing coordination costs. Exemplars such as Corning have launched a strategic vendor-management program to segment vendors and
monitor their performance. Corning identifies a subset of suppliers for activist management based on contract size and availability of substitutes.
Maximize Your Leverage
Corning differentiates vendors by value and closely
monitors the performance of its largest contracts…
…managing vendor underperformance based
on difficulty of finding alternative suppliers
IT Vendor Segmentation Matrix
Illustrative
Decentralized Specialty Sourcing
Enterprise Specialty Sourcing
and Vendor Management
• Local contracting
High
Frank Wang
Education
Underperforming
Specialty Vendors
• Large-scale purchases
of customized goods
and services
• Example: PC support
for Beijing office
Experience
• Example: Systems
integration consultants
Difficulty
of Vendor
Replacement
Decentralized Commodity Sourcing
tive
Correc lan
P
Action
Enterprise Commodity Sourcing
• One-off purchases
• Example: Palm PDAs
Low
• Large-scale purchases
of undifferentiated
goods and services
Back
Forward
Stop
!
Refresh
Must propose performance
improvements
Address:
IT Vendor
Performance Review*
Qualysis
Superior
Infostat
Acceptable
Linnogy
Probationary
Underperforming
Commodity Vendors
• Example: PC hardware
and wireless services
I
TERM
High
Low
NATE
D
Replacements identified
and contracts terminated
Total Contract Value by Vendor
* All vendor names are fictional and for illustrative purposes only.
Source: Corning; CIO Executive Board research.
70
Metrics-Based Performance Scorecards
FedEx monitors the vendor performance using a semiannual scorecard of standard evaluation criteria. The scorecards facilitate clear performance
metrics, with both objective and subjective metrics. The IT Sourcing Group force-ranks vendors by category and publishes the rankings to the corporate
procurement intranet site. Results from the scorecards are also incorporated into future contract negotiations.
What Gets Measured Gets Done
FedEx uses a semiannual scorecard to evaluate vendors…
Strategic Sourcing Scorecard
…based on objective criteria
and documented incidents…
1 = Poor 4 = Excellent
Quality of Vendor Personnel
Rewards ability to
share cost-savings
ideas
Flexibility—Ability to react to changes
1 2 3 4
Training—Independence and thoroughness
1 2 3 4
Explanation Form
Post-Sales Support—Responsiveness to post-sales needs
1 2 3 4
Flexibility = 1, Poor
Innovation Contributions
Frequency of continuous improvement suggestions
On 10, 17, and 28
March, Vivient was
unable to make
requested changes
and still deliver
on time.
1 2 3 4
Resulting savings from continuous improvement suggestions 1 2 3 4
Share of savings given to FedEx
1 2 3 4
Price Competitiveness
Relative prices versus comparable vendors
1 2 3 4
Service Quality
Objective criteria
create indisputable
justification for
scores
Complaints per Product
< 1%
1–3%
4–6%
> 6%
Invoice Accuracy
100–99%
98–94%
93–88%
< 88%
On Time Delivery
100–90%
89–80%
79–70%
< 70%
Cycle Time Improvement
> 50%
30–49%
10–29%
< 10%
Operational Efficiency
Mean Time Before Failure
2 x planned rate
1 x planned rate
Met plan
Less than planned rate
Warranty Claims per Lot
0–2%
3–5%
6–10%
> 10%
* All vendor names are fictional and for illustrative purposes only.
…ranking their scores to identify underperformers
IT Vendor Performance Ranking
Illustrative
Back
Forward
Stop
!
Refresh
!
Address:
Web Site Designer’s Performance Report
Vendor*
Hyperient
DataCom
InfoQuest
Xilinex
Vivient
Score
450
400
350
300
250
Rank
Platinum
Gold
Silver
Bronze
Unacceptable
Requires
corrective
action plan
Source: FedEx; CIO Executive Board research.
Appendix II: Vendor Management and Outsourcing
© 2005 Corporate Executive Board
71
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Global Sourcing Feasibility Matrix
After building an enterprise competency model to identify needed skills, CIOs must determine the most cost-efficient and effective source for talent.
Iverson Financial’s* role-based sourcing strategy provides a powerful alternative to the traditional applications-focused decision criteria used at many
organizations. Iverson built the offshore program as a component of a new holistic skills master plan to ensure that offshore goals support overall business
and HR strategy.
Choosing a Sourcing Strategy
*
A global sourcing feasibility matrix aligns specific roles to business need
Externalization Suitability Framework
-ODE OF #OLLABORATION
#ONSTANT #OLLABORATION
3TRATEGIC )MPACT
ON THE "USINESS
&REQUENT #OLLABORATION
/CCASIONAL #OLLABORATION
0ROXIMITY #ONSTANT COLLABORATION WITH
BUSINESS REQUIRED FOR SERVICE DELIVERY
0ROXIMITY &REQUENT VIRTUAL COLLABORATION
SOME FACE TO FACE COLLABORATION WITH
BUSINESS REQUIRED FOR SERVICE DELIVERY
0ROXIMITY &REQUENT VIRTUAL COLLABORATION
VERY MINIMAL FACE TO FACE COLLABORATION
WITH BUSINESS REQUIRED FOR SERVICE DELIVERY
)MPLICATION 2OLE MUST BE COLOCATED OR
WITHIN COMMUTING DISTANCE OF BUSINESS
)MPLICATION 2OLE MAY BE OUTSIDE OF
COMMUTING DISTANCE OF BUSINESS MUST BE
WITHIN THREE TIME ZONES OR LESS
)MPLICATION 2OLE MAY BE SEVERAL TIME ZONES
AWAY FROM THE BUSINESS
%XTERNALIZATION
0OTENTIAL
$RIVES "USINESS /BJECTIVES
)NPUT TO "USINESS /BJECTIVES )NTEGRAL TO REALIZING
)4 STRATEGY POSSESSES SUBSTANTIAL INSTITUTIONAL
PROPRIETARY KNOWLEDGE
)MPLICATION 2OLE SHOULD REMAIN PRIMARILY INTERNAL
#4/
4ECHNOLOGY 0ROGRAM -ANAGER
!PPLICATION -ANAGER
"USINESS 4ECH -GR 2$
"USINESS !RCHITECT
0ROJECT -ANAGER
!PPLICATION !RCHITECT
2ELEASE -ANAGER
&INANCE -ANAGER
2ELATIONSHIP -ANAGER
)NFORMATION 2ISK -ANAGER
)NFORMATION !RCHITECT
$IFlCULT TO
/UTSOURCE
n )NSOURCE
#ONTINUITY -ANAGER
)NmUENCES "USINESS /BJECTIVES
)NPUT TO "USINESS /BJECTIVES #ONTRIBUTES TO REALIZING
)4 STRATEGY POSSESSES SUBSTANTIAL INSTITUTIONAL
PROPRIETARY KNOWLEDGE
"USINESS !NALYST
)MPLICATION 2OLE MAY BE EXTERNALIZED TO SOME DEGREE
)NFRASTRUCTURE $EMAND -GR
2ESOURCE -ANAGER
$"!
)NFRASTRUCTURE $EMAND !NALYST
#ONTINUITY !NALYST
2ELEASE !NALYST
$ATABASE $ESIGNER-ODELER
4ECHNICAL !RCHITECT
&INANCIAL !NALYST
)NFORMATION 2ISK !NALYST
-ETHODOLOGY !NALYST
"USINESS 4ECH !RCH 2$
0-/ !NALYST
5SABILITY %NGINEER
1! 4ESTER
+NOWLEDGE -ANAGER
1UALITY -ANAGER
4ESTING -ANAGER
,EADING %DGE 4ECH $EVELOPER
-AY "E !BLE
TO /UTSOURCE
n )NSOURCE
)MPLEMENTS "USINESS /BJECTIVES
)NPUT TO "USINESS /BJECTIVES %XECUTES ON )4 STRATEGY
POSSESSES LIMITED BUSINESS KNOWLEDGE
!PPLICATIONS $EVELOPER
3TRESS 4ESTER
4ECHNICAL !NALYST
)MPLICATION 2OLE MAY BE EXTERNALIZED TO A HIGH DEGREE
/FFSHORE 0OTENTIAL
* Pseudonym.
0OSSIBLE TO
/UTSOURCE
n )NSOURCE
#ANNOT /FFSHORE
-AY "E 0OSSIBLE TO /FFSHORE
0OSSIBLE TO /FFSHORE
Source: Iverson Financial; Applications Executive Council research.
72
Appendix III
Diagnostic Questionnaires
Balancing Flexibility with Efficiency (p. 75)
Benchmarking Organizational Preparedness for
IT Centralization (p. 76)
Strengthening the IT Leadership Bench (pp. 77–78)
Assessing Organizational Planning Capabilities (pp. 79–80)
Creating an Agile IT Organization (pp. 81–82)
© 2005 Corporate Executive Board
Disciplines for Enabling ROI Transparency
and Accountability (pp. 83–84)
Assessing the Need for an IT Balanced Scorecard (p. 85)
Designing and Maintaining a World-Class IT
Balanced Scorecard (pp. 86–87)
Enabling Strategic Management of External Suppliers (pp. 88–89)
73
© 2005 Corporate Executive Board
The CIO’s First 100 Days
74
Balancing Flexibility with Efficiency
The CIO Executive Board offers the following diagnostic questions to help its member CIOs improve central IT’s alignment with business
partners while maintaining operational efficiency across the IT value chain.
Needs Analysis
Yes
No
User Absorption
Yes
1. Does the IT organization play a role in “managing demand”
for IT investments by collaborating with business partners to
identify potential needs and project opportunities?
8. Does IT have formal methodologies to assess and mitigate
risks to user adoption in the earliest stages of the project life
cycle?
2. Does the CIO have credible senior IT “liaisons” who can
collaborate with business partners to develop solution
alternatives and maximize ROI for new projects?
9. Does IT have formal roles to determine necessary changemanagement investments needed for small and medium
projects (not simply large enterprise system rollouts)?
3. Is IT actively involved in the process of documenting and
optimizing business processes across the enterprise?
10. Does IT segment user populations and create targeted
communications and engagement strategies accordingly to
ensure absorption
of new functionality?
Implementation and Operations
4. Has the organization created cross-enterprise standards to
promote systems integration and development asset reusability
across business units?
5. Are there formal processes in the project management life cycle
to identify and facilitate opportunities for development asset
reuse?
6. Does IT employ virtual teams to encourage horizontal
collaboration across geographically dispersed IT staff?
No
Organizational Design
11. Are the structure and role of central IT designed
to capture scale efficiencies while maintaining an
acceptable level of responsiveness to local/business needs?
12. Are the structure and role of central IT aligned with core
business objectives, such as M&A growth, accelerated
product rollout, or end-to-end
process integration?
7. Has IT created local management positions
to maximize the effectiveness and professional development
of IT staff in remote locations?
Total “Yes”
Diagnostic Scores
Number of
Assessment
“Yes” Answers
9–12
IT Has Achieved a Balance of Scale and Responsiveness to the Business
5–8
Progress Is Needed to Balance Organizational Scale and Responsiveness
0–4
IT Should Revisit Its Organizational Structure to Improve Responsiveness
Appendix III: Diagnostic Questionnaires
© 2005 Corporate Executive Board
75
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Benchmarking Organizational Preparedness for IT Centralization
The CIO Executive Board offers the following diagnostic questionnaire to help its member CIOs design, win support, and manage migration
toward a more centralized IT organization.
Optimizing the Balance Between Central and Local
1. Does the company have a clear view of all existing business unit
IT spend and resources?
2. Does the company use objective criteria around skill and scale
requirements to determine which IT activities are best delivered
locally, centrally, and externally?
3. Are business unit managers involved in the design and role
definition of central IT?
Winning Business Support for Centralization
4. Does IT employ a dedicated communications professional
to help win support for IT consolidation?
Yes
No
Managing Stakeholder Transition
Yes
9. Has IT mapped clear transition steps designed
to build IT staff loyalty to the organization?
10. Has the CIO personally communicated the benefits and costs
of centralization to IT staff?
11. Does IT assign to each business unit a liaison who has sufficient
business context to support business unit technology strategy
and the seniority and credibility
to manage demand?
12. Has IT baselined performance and user satisfaction prior
to centralization to use as a benchmark for the centralized
organization?
Total “Yes”
5. Has IT identified and segmented potential champions
and resisters to centralization?
6. Has the CIO clearly communicated the costs, benefits,
and risks of centralization to business unit peers?
7. Has IT developed a campaign plan that maps key messages
to specific constituencies and events related to centralization?
8. Has IT clearly communicated its centralization agenda
to vendors?
Diagnostic Scores
Number of
Assessment
“Yes” Answers
10–12
IT Is Well Prepared for Transition
6–9
Significant Gaps in IT Preparedness for Transition
0–5
IT Is Ill Prepared for Transition, Serious Risk of Failure
No
76
Strengthening the IT Leadership Bench
The following questions are intended to facilitate discussion between senior IT, line IT, and HR decision makers about the IT organization’s
efforts to create a continuous pipeline of business-focused IT leaders.
Transparent Development Road Maps
Yes
No
Yes
1. Has the IT organization conducted a formal skills assessment
and forecasting exercise to identify the most critical staff
leadership characteristics?
8. Does the IT organization communicate competency
requirements and available career-management resources
to IT staff across multiple channels?
2. Has the IT organization identified the development activities
most effective at closing skills gaps?
9. Does the IT organization provide insight into the skills and
experience of existing IT leaders through face-to-face or
“virtual” mentoring?
3. Has the IT organization recalibrated the allocation
of resources toward activities with the highest yield
in leadership and skills development?
Personalized Leadership Development Planning
4. Has the IT organization formally defined a key set
of competencies that will be critical to employee and
organizational success?
5. Has the organization integrated the IT and corporate
competency models to provide staff with a comprehensive
set of required skills and behaviors?
6. Has the organization linked competencies and levels of
maturity to specific IT job titles to provide staff transparency
into the competencies that are required for each?
7. Has the organization linked competencies and job titles
to recommended development curricula that are best suited
to build required competencies?
No
10. Does the IT organization create personalized development
plans for at least a subset of all IT staff?
11. Does the IT organization provide staff with a suite of selfservice developmental planning tools to alleviate managers’
administrative burden and drive employee ownership of careerpathing activities?
12. Does the IT organization conduct regular employee
segmentation exercises to prescribe development strategy
at the individual level and gauge overall IT bench strength?
13. Does the IT organization help high-potential leaders strengthen
business relationships and build peer networks by assigning
them to cross-functional teams tasked with enterprise-level
assignments?
14. Does the IT organization instill organizational and company
process knowledge via rotational assignments through IT groups
serving various lines of business?
Subtotal “Yes”
Appendix III: Diagnostic Questionnaires
© 2005 Corporate Executive Board
77
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Strengthening the IT Leadership Bench (Continued)
Development Opportunity Brokering
Yes
15. Does the IT organization utilize flexible staffing protocols
to reduce the “lag time” between classroom-based training
and experiential work, driving on-the-job reinforcement
of key skills?
No
Yes
18. Does the IT organization maintain an employee skills inventory
to track individual and organizational skills gaps?
19. Does the IT organization maintain a project skills database
to provide a holistic view of experiential development
opportunities?
16. Does the IT organization task-specialize employee career
management to balance skills development with effective
project execution?
17. Does the organization employ customized training modules
with company-specific case studies to build a “common
vocabulary” around subjects such as IT architecture, project
and business case methodologies, and key business processes?
20. Does the IT organization identify “best fit” development
opportunities that remediate employee skills gaps while
ensuring successful project delivery?
Subtotal “Yes”
Total “Yes”
Diagnostic Scores
Number of
“Yes” Answers
15–20
8–14
0–7
Assessment
Leadership Development Exemplar
Progressive Leadership Development Practitioner
Baseline Leadership Development Capability
No
78
Assessing Organizational Planning Capabilities
The CIO Executive Board offers the following diagnostic questionnaires to help its member CIOs assess organizational planning capabilities.
Expanding Planning Inputs
Yes
No
Educating Business Decision Makers
Yes
1. Do we systematically require senior thinkers at strategic vendors
to critique our IT strategic planning assumptions?
5. Do we provide senior executives and business unit leaders with
experiential learning activities prior to funding discussions?
2. Do we have early-warning systems for line customers and
infrastructure managers of changes in vendor product strategy
that may affect existing technology services and capabilities?
6. Do we have a network of contacts at frontier academic and
commercial research organizations who can host off-site
learning experiences for senior executives?
3. Do we have ongoing staff resources and planning activities
devoted to exploring the impact of emerging technologies
on industry structure?
7. Is the CIO perceived internally as an “educator” rather than
a “salesperson” for emerging technology investments?
4. Do we systematically consult with organizations in the
company’s value chain web to identify opportunities for
collaborative IT strategic planning, standards-setting,
and infrastructure investments?
No
Subtotal “Yes” _______
Appendix III: Diagnostic Questionnaires
© 2005 Corporate Executive Board
79
© 2005 Corporate Executive Board
The CIO’s First 100 Days
Assessing Organizational Planning Capabilities (Continued)
Yes
Hardwiring Strategic Alignment
No
Multichannel Broadcasting
Yes
8. Do we set objective criteria for evaluating the importance
and effectiveness of individual IT projects?
17. Does the CIO make regular presentations of IT strategy
to line managers and end users?
9. Do we have an objective basis for reprioritizing projects based
on changes in external market conditions?
18. Are at least 75% of employees able to name the key
IT strategic initiatives going on in the corporation?
10. Have we separated reprioritization of internal or supply chain
IT projects from customer-facing projects?
11. Do we reprioritize internal projects at least quarterly and
customer-facing projects at least monthly?
12. Can we promise less than a one-week lag between
communication of changes in senior executive strategic
priorities, reprioritization of the IT queue, and reassignment
of IT staff and funding resources?
19. Does the IT department produce annual reports, newsletters,
and intranet banner ad campaigns recording the evolution
and accomplishments of its IT strategy?
20. Does the company maintain an IT strategy intranet site that
monitors strategic assumptions and provides useful information
to line customers regarding competitors’ IT capabilities and
changes in consumer use of IT?
13. Is the governing body responsible for project reprioritization
separate from the body responsible for resource allocation?
Subtotal “Yes” _______
Total “Yes”
14. Is at least 25–50% of the discretionary IT budget unassigned
to accommodate unanticipated additions to the IT queue?
15. Is the IT portfolio completely free from projects that do not
directly map to current strategic opportunities?
16. Is the focus of discretionary IT spending proportional
to the most current corporate strategic priorities?
Diagnostic Scores
15–20
10–14
5–9
0–4
No
Highly Aligned and Responsive IT Planning
Somewhat Aligned and Responsive Planning
Constrained to Resource Calendars
Inflexible, Unaligned Planning
_______
80
Creating an Agile IT Organization
The following questions are intended to facilitate discussion between senior IT, line IT, and corporate business decision makers about the corporation’s
progress toward creating an IT organization that is responsive to the business’s evolving needs.
Responsive IT Portfolio Prioritization
1. Has the IT organization developed an enterprise-standard
business case template, including a set of standard cost and
benefit assumptions, to facilitate comparison of projects across
all business units/regions/functions?
2. Does the business case require an estimation of total project costs,
moving beyond initial purchase and implementation expenses to
encompass future support, maintenance, and retirement costs?
3. Is the IT organization able to provide prioritization decision
makers with detailed IT budget information, including the
“keep-the-lights-on” costs of IT operations and the costs of
ongoing project work?
4. Has the IT organization created a dedicated project-management
office to oversee the implementation of a standard projectmanagement methodology and coordinate the collection and
consolidation of project data?
5. Does the project-management office manage the IT project
portfolio in addition to disseminating project-management
expertise?
6. Has the IT organization identified a subset of all projects, either
on the basis of project cost, project size, or project impact across
organizational silos, that will be subjected to greater project
and portfolio management scrutiny?
7. Has the IT organization created a set of weighted project criteria
to allow the objective comparison of projects with divergent
business cases?
Yes
No
Yes
No
8. Does the IT organization provide regular (monthly or more
frequent) reports on the status of critical project metrics, such
as project scope, schedule, and cost?
9. Has the IT organization segmented the IT project portfolio,
creating categories of projects with like business drivers and
differentiating the metrics used to assess the value of
projects in each?
10. Does the IT organization conduct a comprehensive project
risk assessment, including project interdependencies and
technological and organizational risks?
11. Does the IT organization supplement sponsor-generated
business cases for major projects with a portfolio category–
specific estimate of each project’s strategic value, including
alignment with short- and long-term business strategy,
reusability, and simplification of end-user workflow?
12. Does the company audit IT projects for business case
realization—comparing actual costs and business results
with the original estimates included in the project proposal—
to identify the root causes of variance and improve the accuracy
of future estimates?
13. Are prioritization decisions made by a steering committee
or board that includes senior-level representatives from IT
and all affected business constituencies?
14. Has the IT organization consciously calibrated the frequency
of prioritization activities to the pace of change in the
company’s business environment?
Subtotal “Yes” _______
Appendix III: Diagnostic Questionnaires
© 2005 Corporate Executive Board
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© 2005 Corporate Executive Board
The CIO’s First 100 Days
Creating an Agile IT Organization (Continued)
Rapid Resource Redeployment
Yes
No
Yes
15. Has the IT organization created an enterprise-wide IT skills
directory to facilitate rapid identification of staff
and skills in the event project priorities change?
19. Has the IT organization created a mechanism, e.g., a funding
pool, to fund off-cycle project demand in response to changing
business strategies?
16. Has the IT organization put into place a flexible staffing
mechanism, e.g., a staffing pool, to facilitate rapid redeployment
of staff toward new projects when priorities shift?
20. Has the IT organization developed a set of weighted, objective
criteria to facilitate the dispersal of funds from this pool?
No
21. Are projects that receive funding through this mechanism
subject to strict project-management discipline, including
time-boxed project deliverables, project accounting, and process
compliance audits?
17. Has the IT organization put into place a dedicated group of
resource managers to ensure the continued career development
of staff who reside in the staffing pool?
18. Does the IT organization maintain standing relationships
with a small set of strategic vendors in order to quickly source
necessary staff and skills if they are not available within the
company?
22. Has the IT function put into place a project life-cycle process,
included stage-gated funding for major projects and clear
criteria for project cancellation at each life-cycle stage?
Subtotal “Yes” _______
Total “Yes”
Diagnostic Scores
Number of
“Yes” Answers
16–22
11–15
7–10
1–6
Assessment
Agility Exemplar
Maturing IT Agility
Nascent IT Agility
Unresponsive IT Organization
_______
82
Disciplines for Enabling ROI Transparency and Accountability
The CIO Executive Board offers the following diagnostic questionnaires to help its member CIOs assess the disciplines for enabling ROI transparency
and accountability.
Perfecting Large Project Execution
Yes
No
“Rightsizing” Applications Maintenance Costs
Full Life-Cycle Cost Estimation
1. Do all IT projects above a given cost threshold follow a standard
business case justification process that includes estimates of all
project life-cycle costs and benefits?
Alternative Cost/Functionality Scenarios
10. Does the IT organization proactively provide the business
with IT project cost/functionality scenarios to help it choose
between project alternatives?
2. Does the company regularly revisit the business case
assumptions of large ongoing IT projects and require business
sponsors to attest to their continued validity across the project
development cycle?
Legacy Maintenance Cost-Reduction Campaigns
11. Has the IT organization conducted an applications inventory
to determine potential opportunities for retiring redundant
legacy systems?
Project Sponsor ROI Contracts
3. Do we incorporate business case assumptions of large IT
projects into the budgets, performance targets, and bonus
incentives of their business sponsors?
4. Are project business sponsors empowered and encouraged
to proactively terminate projects for which there no longer
remains a sound business case?
Ongoing Risk Scoring for Large Projects
5. Does the IT organization use objective criteria to periodically
assess risks facing large IT projects to provide early warning
for threats to benefits realization?
6. Do we have a mechanism for flagging the risks to IT projects
arising from low engagement of business sponsors?
7. Do we have a mechanism for identifying the risks to IT projects
arising from lack of clarity in the definition of business
requirements?
Yes
No
12. Do project budgets for new systems development take into
account the costs of replacing redundant systems slated for
retirement?
13. Are maintenance resources prioritized based on an application’s
business value, revenue impact, and geographic scope?
Objective Risk Segmentation for Applications Outsourcing
14. Has the organization explored opportunities to reduce
maintenance expenses by shifting labor-intensive commodity
maintenance work to lower-cost geographies?
15. Has the IT organization sequenced its outsourcing strategy to
focus its initial efforts on the lowest-risk applications while it
develops offshore management capabilities?
16. Has the company developed objective criteria to assess the risks
and feasibility of outsourcing candidates?
Continuous Improvement Through Postmortem Assessments
8. Does the IT organization conduct post-implementation reviews
measuring IT project execution success?
9. Are lessons from those IT project post-implementation reviews
codified in a central “lessons-learned” database to improve future
estimate accuracy and process execution?
Subtotal “Yes”
Appendix III: Diagnostic Questionnaires
© 2005 Corporate Executive Board
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The CIO’s First 100 Days
Disciplines for Enabling ROI Transparency
and Accountability (Continued)
Achieving Infrastructure Cost Transparency
Yes
No
Yes
Customer-Focused IT Product Catalogs
17. Are we able to calculate the unit costs of infrastructure
products delivered so as to determine how consumption
behaviors drive total costs?
Collaborative Consumption Reviews
20.Has the organization created dedicated infrastructure “product
managers” who help define and manage unit products to
optimize consumption and spending levels?
18. Does the IT organization conduct periodic benchmarking
of costs in order to determine competitive market prices for
its services?
21. Do IT representatives regularly meet with business unit
management to spotlight variances in IT consumption and cost
trends to identify potential avenues for optimization?
19. Do we have an IT product and service catalog that provides
end users with plain-English descriptions of specific IT services
and their cost drivers?
Subtotal “Yes”
Total “Yes”
Diagnostic Scores
Number of
“Yes” Answers
15–21
7–14
0–7
Assessment
Culture of Continuous Cost Improvement
Developing Ethic of Cost Efficiency
Uncoordinated Approach to Cost Efficiency
No
84
Assessing the Need for an IT Balanced Scorecard
The following questions are intended to assist CIOs in diagnosing whether an IT balanced scorecard would be a useful addition to their
current IT performance-management framework.
Yes
Yes
No
1. Can I clearly articulate the link between IT operational
and project activities and the organization’s stated strategic
business goals?
6. Can I easily compare the performance of my IT function
to that of industry competitors or companies with similar
geographic dispersion or scale?
2. Is there a process or mechanism in place to track the impact
on service levels and satisfaction of ongoing cost-efficiency
efforts?
7. Do IT performance-management meetings focus almost
solely on discussions of metric comparability and validity
rather than on making resource allocation decisions?
3. Can I describe the performance of the IT function in a
concise, nontechnical, business-friendly fashion?
8. Do I have a sufficient understanding of the progress and
status of ongoing IT project work to allow for corrective
action if major projects are at risk for scope creep, budget
overruns, or schedule delays?
4. Can I effectively communicate the value that IT creates for
the business?
No
5. Can I communicate a holistic perspective of IT performance
consistently across various geographies and business units?
Total “No” _______
Diagnostic Scores
If four or more “No” answers, then adoption of an IT balanced scorecard
may facilitate IT performance management at your organization.
Appendix III: Diagnostic Questionnaires
© 2005 Corporate Executive Board
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© 2005 Corporate Executive Board
The CIO’s First 100 Days
Designing and Maintaining a World-Class IT Balanced Scorecard
To assist member companies in the initial design and implementation of IT balanced scorecards, as well as the reevaluation of existing scorecards,
the CIO Executive Board has created the following diagnostic questionnaire.
Structuring the Scorecard
1. Does the IT balanced scorecard fit onto a single page
(or screen)?
2. Are the IT balanced scorecard’s metrics devolved from the goals
articulated in the IT strategic plan?
3. Are these metrics expressed in nontechnical language, allowing
business decision makers to easily understand IT performance?
Yes
No
Selecting Scorecard Metrics
Yes
No
8. Do financial metrics move beyond simple reporting of total IT
spend to help decision makers reallocate IT funding between
functional areas, business units, and portfolio categories?
9. Are operational metrics aggregated to provide decision makers
with a “user’s perspective” of IT performance?
10. Does the balanced scorecard’s project performance category
include an assessment of compliance with enterprise architecture
goals and contribution to corporate business strategies?
Selecting Scorecard Categories
4. Does the IT balanced scorecard supplement financial
and operational metrics with categories that track project
performance, user satisfaction, and talent management?
11. Do measures of customer satisfaction incorporate both end-user
and executive perspectives on IT performance?
5. Does the IT balanced scorecard also include categories
for information security?
12. Do talent-management metrics focus on gauging staff
satisfaction, external reputation of the IT organization,
and other organizational attributes likely to make the company
a destination for high-potential IT talent?
6. Does the scorecard outline target levels for each metric
that have been agreed upon by both senior IT and business
leadership?
13. Does the balanced scorecard build awareness of information
security issues by providing senior decision makers with an
assessment of the organization’s vulnerability?
7. Are scorecard categories, metrics, and weightings revisited
on an annual cycle to ensure continued relevance to changing
business needs?
14. Are metrics designed to track IT’s contribution to major
enterprise initiatives aggregated in a single scorecard category,
allowing business sponsors to quickly assess IT’s level of support?
Subtotal “Yes” _______
86
Designing and Maintaining a World-Class
IT Balanced Scorecard (Continued)
Ensuring Data Accuracy and Relevance
Yes
15. Do all metrics have clear, well-documented definitions,
agreed upon by senior IT and business leadership?
16. Does each IT balanced scorecard metric have a defined
collection frequency (e.g., monthly, quarterly, annually)
based on the volatility of the business strategy it helps enable?
No
Facilitating Management Decision Making
Yes
No
21. Have business decision makers, metrics owners, and IT leaders
received training on the basic concepts and uses of balanced
scorecards?
22.Is the IT balanced scorecard reviewed on a regular basis
by IT and business executives senior enough to make decisions
based on scorecard information?
17. Have all scorecard metrics been assigned to a metric owner
whose compensation is based on his or her timely delivery
of required data?
18. Is data accuracy verified by local metrics experts before data
are published to the scorecard?
19. Does the IT balanced scorecard provide readers with the ability
to drill down into the data underlying scorecard metrics?
20. Does the IT balanced scorecard provide readers with context
for changes in performance (for example, historical reference
data, external benchmarks, or metric owner comments)?
Subtotal “Yes” _______
Diagnostic Scores
Number of
“Yes” Answers
17–22
9–16
1–8
Total “Yes” _______
Assessment
Balanced Scorecard Exemplar
Developing IT Balanced Scorecard Competency
IT Balanced Scorecard Novice
Appendix III: Diagnostic Questionnaires
© 2005 Corporate Executive Board
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© 2005 Corporate Executive Board
The CIO’s First 100 Days
Enabling Strategic Management of External Suppliers
The CIO Executive Board offers the following diagnostic questionnaires to help its member CIOs assess the strategic management of external suppliers.
Part 1. Vendor Management
Centralized Strategic Sourcing
1. Does the company have a centralized procurement
and vendor-management team capable of creating enterprisewide contracts to take advantage of purchasing and volumebased discounts?
2. Does the centralized procurement utility handle at least 70%
of purchasing volume?
3. Has the company identified a subset of its largest vendors as
“preferred” providers that together represent at least 60%
of enterprise-wide procurement spending?
4. Does the company have an intranet to communicate
procurement information to internal buyers such
as contracting processes and approved technology standards?
Standardized Contracting Templates
5. Has the company created standardized contract templates
including a list of terms and risk-mitigation clauses that it
consistently tries to incorporate into all of its contracts?
6. Do at least 75% of deals rely on these standardized
templates?
End-to-End Asset Management
7. Has the company inventoried and incorporated all
of its existing IT assets into a central database (including
items such as servers, desktops, printers, cell phones,
software licenses, etc.)?
Yes
No
Yes
No
8. Does the company have processes in place to ensure that
the asset inventory remains current and reflects changes
for Install, Move, Add, or Change of systems?
9. Does the company use the asset inventory to track the
total cost of ownership of assets over their life cycle
(including maintenance and integration) to inform
decisions about retirement and replacement?
10. Does the company have the capability to identify and
redeploy existing assets when a purchase request could
be fulfi lled out of existing inventory?
Vendor Solvency Scanning
11. Are staff dedicated to performing ongoing due diligence (after
the RFP process is finished) on vendors’ continued solvency to
provide early-warning signs of potential financial distress?
12. Does the company use this information to engage in
“opportunistic renegotiation” with solvent vendors
facing short-term financial pressure?
13. Does the company have a process in place to “watchlist” at-risk
vendors and develop proactive contingency plans and identify
alternative providers?
Value-Based Vendor Segmentation
14. Has the company established objective criteria to determine
which vendors are “strategic” based on measures of contract
value or switching costs?
15. Does the company attempt to segment its vendor base
to focus ongoing relationship-management resources
on vendors that provide the most strategic value?
Subtotal “Yes” _______
88
Enabling Strategic Management of External Suppliers (Continued)
Yes
Metrics-Based Performance Scorecards
16. Has the company established predetermined metrics
and service levels against which supplier performance
will be assessed on a regular schedule?
No
Yes
No
Utility-Based Pricing Structures
23. Is the outsourcing contract denominated in terms of
unit-based prices that can be externally benchmarked,
allowing continued comparison with competitive market
prices?
17. Do business unit and field representatives provide
regular feedback on vendor performance against these
measures to ensure that service quality is consistent
and transparent across the organization?
24. Does the outsourcing contract stipulate that total fees will
fluctuate to directly reflect the unit volume of services
consumed?
18. Are the results of this “scorecard” communicated
internally to buyers and externally to vendors to create a
competitive internal market and direct future spending toward
the top performers?
Activist Oversight and Issue Resolution
25. Has the company created a dedicated team for vendor
governance and performance management?
Part 2. Outsourcing Relationships
26. Are these relationship managers’ incentives tied to maximizing
the outsourcer’s performance and minimizing relationship
disputes?
27. When outsourcers underperform, do predetermined escalation
procedures exist to correct that performance?
Reverse-Engineering Negotiation Targets
19. Has the company outlined clear cost-savings targets with
which to measure the success or failure of an outsourcing deal?
20. Has the company retained standards setting and capabilities
that provide competitive advantage?
Closed-Loop Performance Improvement
28. Has the company identified a subset of key service-level
agreements to monitor on a monthly basis?
21. Has the company achieved internal cost transparency
of its current IT cost structure and spending drivers prior
to consideration of an outsourcing partnership?
29. Does underperformance against one of these indicators launch
a corrective action plan to solve underlying problems?
30. Are recommended performance improvements hardwired
into the vendor’s de facto SLAs?
22. Does the company evaluate outsourcing bids based on
informed negotiation targets by reverse-engineering
actual supplier costs and comparing them with in-house
alternatives?
Subtotal “Yes” _______
Diagnostic Scores
Number of
“Yes” Answers
21–30
11–20
1–10
Total “Yes” _______
Assessment
Sourcing Management Exemplar
Sourcing Management Leader
Sourcing Management Laggard
Appendix III: Diagnostic Questionnaires
© 2005 Corporate Executive Board
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In-Person Research Presentations
An in-person research briefing is an interactive session that members can use to spark internal discussion and debate around strategic issues
the CIO Executive Board has researched. A senior research director will travel to a member’s location to present and discuss research findings
that are most relevant to member issues and challenges. This in-person research briefing service allows member CIOs to share CIO Executive
Board case studies, practices, and insights with their staff and larger audiences within their organization.
Frequently Requested Presentations
1. Structural IT Cost Efficiency: What tools and processes are CIOs
using to achieve structural IT cost efficiency?
2. Strategic Vendor Management: How are pioneering organizations
managing IT vendor performance to maximize value and flexibility?
3. Responsive IT Portfolio Prioritization: How are leading companies
structuring and reprioritizing IT portfolios to ensure continued
alignment with changing business strategies?
4. End-to-End Data Visibility: What technical and organizational
innovations are exemplars using to enable end-to-end data
visibility?
6. Aligning IT with Corporate Strategy—Case Studies in Enterprise
Architecture Migration: How are premier companies creating selffunding IT architectures that mirror and advance corporate strategy?
7. IT-Enabled Collaboration: What are the most effective uses of
IT-enabled collaboration? How are exemplars deploying these tools
to ensure efficiency and maximize collaboration?
8. Deploying Enterprise Portals: What are the functional capabilities and
IT requirements of “world-class” portals and enterprise information
systems?
9. IT Strategic Planning Excellence: What are the leading practices
for aligning corporate and IT priorities?
5. Rapid Resource Redeployment: How are CIOs enabling rapid
resource redeployment in response to changing priorities?
10. Customer Relationship Management: How are exemplars rescoping
CRM initiatives for high-impact management of internal and
external customers?
Common Formats
Formal Research
Presentation
Facilitated Research
Discussion
Interactive Working
Session
One-to-One
Briefing
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In-Person Research Presentations
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CIO Executive Board Project Support Desk
Custom research for strategic IT staff, available (free) for the asking
As a complement to our ongoing research, members are encouraged to take advantage of the Project Support Desk. A free resource to assist
senior IT staff with “work in the moment,” the Project Support Desk offers fast-turnaround research for business case preparation, strategic
planning exercises, and budgeting. Members describe their project goals and time constraints and then decide what combination of literature
search, fact retrieval, and networking contacts best suits their needs. In keeping with the CIO Executive Board’s charter, the Project Support
Desk does not conduct competitive research, benchmarking, or vendor assessments.
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contracting trends impacting
my peers?
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