The Role of the CIO QingJiang Qu Jennifer Page Kristen Smith Nora Teske Elizabeth Vadakkan Overview • • • • • • • • • What is a CIO? Why is a CIO Important? Demographics What Should a CIO Know? Top Ten Issues for CIOs Challenges of the CIO Case Studies Comparisons What We Have Learned 2 What is a CIO? • A chief architect who designs future opportunities for the business • A change leader who orchestrates resources to achieve optimal implementation • A product developer who helps define the company’s place in the emerging digital economy • A technology provocateur who embeds IT into the business strategy • A chief operating strategist who invents the future with senior management and brings innovation • A coach who trains people to implement and use new technolgoy Gottschalk,Peter. "IS/IT Leadership Roles," hicss, p. 7055, 33rd Hawaii International Conference on System Sciences-Volume 7, 2000 3 Why is a CIO Important? • Dual roles • Manage IT as a department • Manage IT as a partner with the organization’s business leaders Heather A, Smith, “IT in 2010:the next frontier” MIS, Sep 2006, volume 5, Issue 4 Salary Demographics •Most public CIOs (47%) earn $100,000 to $149,000 16% % of Annual compensation for CIOs •Average annual compensation of a CIO in 2008 was $237,400 15% 14% 12% 12% 12% 10% 10% 10% 9% 8% 7% 7% 6% 6% 5% 4% 4% 2% 0% less than $100K to 125,K to 150K to 175K to 200K to 225K to 250K to 300K to 350K to $100K $125K 150K 175K 200K 225K 250K 300K 350K 400K more than 400K Annual com pensation of CIOs CIO Magazine’s “State of the CIO Survey”, CXO Media Inc, 2008. http://www.cio.com/state/ , viewed March 20, 2008. (Sample Info: Survey was conducted between 7/9/07-7/31/07. 558 heads of IT from a broad range of industries including non-computer-related manufacturing (12 percent), healthcare/pharmaceuticals/medicalservices/biotech (10 percent), wholesale/retailer/distributor (9 percent), education/nonprofit (9 percent),finance/banking/accounting (9 percent) and government (9 percent). The margin of error on a sample sizeof 558 is +/- 4.1 percent. 64% of the respondents hold a CIO/CTO title, 21% hold VP/SVP/EVP of IT titles, 11% an EVP/SVP/VP, 4% list their title as “other.” 26% of the respondents are from companies with annual revenue of less than $100M, 39% are from companies with revenue between $101M and $999.9M, and 32% are from companies with over $1B (3% did not answer this question).) Survey sample details for this source will not be repeated on subsequent slides. 5 • In 2007 908,000 women worked in IT. 26.2% of all IT.(US). This was a 7.7% drop from 2000. BUT • According to Dice.com 2006 survey, Female CIOs earned $109,912 averaging 1.4% more than men! Gender Statistics, CIOs and IT CIOs % Male v. Female Blue-Male Red-Female 14% 86% 1. ITAA June 22, 2005 Press Release - Minorities - http://www.itaa.org/eweb/Dynamicpage.aspx?webcode=PRTemplate&wps_key=0bf6f8eb20ab-4906-957d-2ffa85ea205b 2. CIO Magazine’s “State of the CIO Survey”, CXO Media Inc, 2008. http://www.cio.com/state/ 3.The Dice Salary Survey viewed 3/31/08 http://career-resources.dice.com/tech_salary_survey_06.shtml administered online among 19,182 registered Dice.com job seekers and visitors between August 2 and November 30, 2006. Respondents participate in the survey through a notification on the Dice homepage, and registered job seekers. A cookie methodology was used to ensure that there was no duplication of responses between or within the various sample groups, and duplicate responses from a single e-mail address were removed. 6 CIO Tenure & Turnover Average Turnover Percentage Less 2 to 5 than 2 years years 5 to 10 years More than 10 years 2008 31% 34% 28% 7% 2007 27% 33% 29% 11% 2006 24% 35% 31% 9% Years 2003 2004 2006 2007 2008 Average tenure years 4.3 4.5 4.9 5.1 4.5 http://www.cio.com--© 2008 CXO Media Inc. 7 General Statistics on CIO Reporting Structure 45% 41% 40% 35% 30% 23% 25% 20% 16% 20% 15% 10% 5% 0% CEO/Equiv CFO COO Other Jerry Lufftman, “key issues for IT executives 2005”,MIS, June 2006, volume 5, Issue 8 2% 1% 1% 1% 2% Marketing Manufacturing Producation Other Operations 3% Sales 3% Finance/Accounting 4% Administartion 7% Engineering 77% Consulting 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% IT % of previous backgrounds for CIOs Previous Background CIO previous backgrounds CIO Magazine’s “State of the CIO Survey”, CXO Media Inc, 2008. http://www.cio.com/state/ 9 What Should a CIO Know? • The federal CIO council produced a set of "high-level competencies" that government CIOs need • As of March 2001, the list came to 549 learning objectives in 12 categories • The leadership/managerial category alone has 80 learning objectives • Other Skills • Communication and conflict management, behavioral principles, theories of motivation, infrastructure building expertise, performance assessment, IT retention, and knowledge management. www.cio.com/article/31426/Elements_of_a_CIO_Education 10 Top ten issues for CIOs 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. IT and business alignment Attracting, developing, and retaining IT professionals Security and privacy IT strategic planning Business process engineering Introducing rapid business solutions Measuring the value of IT investments True return on IT investment (What is true return?) Complexity reduction IT governance Jerry Lufftman, “key issues for IT executives 2005”,MIS, June 2006, volume 5, Issue 11 Challenges of the CIO • Bring vision and innovation to the company • Develop technology expertise and business acumen • Stay current with emerging technology • Attract and retain IT staff in a competitive market • Manage change 12 Challenges of the CIO Bring Vision and Innovation: CIO vs. Corporate Culture • CEOs report gap between business and technology; affects customer satisfaction, speed & flexibility…the CIO must close this gap. • 84% of CIOs surveyed by IBM believe technology is transforming industries and enabling competitive advantage • 16% of CIOs surveyed by IBM said their companies were taking full strategic advantage of IT • CIOs must bring new ideas, processes, and select projects that fit business needs while improving current processes 1. Huber, Bill. “The New Face of IT Leadership” Technology. Inc. Viewed 3/21/08. http://technology.inc.com/managing/articles/200702/huber.html 2. IBM Global Services. “The New CIO: Change Partner and Business Leader” May 2007. http://www935.ibm.com/services/us/cio/pdf/wp_cio_leadership_forum_g510-6605-00.pdf 3. “Expanding the Innovation Horizon,” The IBM Global CEO Study 2006 http://www-935.ibm.com/services/uk/bcs/pdf/g510-6259-01-the-global-ceo-study2006.pdf (The survey population included 765 CEOs and public sector leaders, spanning 20 different industries and 11 geographic regions (including representation both from mature markets and developing markets such as China, India, Eastern Europe and Latin America. Sample comprised leaders of companies both large and small, some public and some privately held Sample data will not be repeated on future slides). 4. “IBM Survey: CIO Role Is Changing; CEOs Need to Further Align IT and Business to Drive Innovation and Growth” Zane, Randy. Press Release Viewed 3/20.08. June 19,2007. (Surveyed 170 Global CIOs, Public and Private, at the 2006 Leadership Forum. Hosted By IBM.) 13 Challenges of the CIO Develop Technology Expertise and Business Acumen • Businesses are technologically lagging because CIOs can’t build good cases for IT investment, or gain organizational commitment. • 43% of CIOs now report they have responsibilities in departments other than IT. • Mentoring may be useful in making the tech-only CIOs more business savvy. • Non-technical CIOs should work closely with IT staff to stay informed of operational issues 1. “Generating Premium Returns on Your IT Investments,” P. Weill & S. Aral, MIT Sloan Management Review, Vol. 47 No. 2, Winter 2006. 2. Harvey Nash USA’s 2006/2007 CIO Survey Viewed 3/30/08. It was conducted online from September 22 to November 10, 2006. One hundred and seventy-two IT leaders completed a 56 question survey. Respondents included CIOs and senior IT business leaders from companies located primarily in or around the region of the 11 major markets served by Harvey Nash: Atlanta, GA; Boston, MA; Denver, CO; Chicago, IL; New York, NY; Parsippany, NJ; Phoenix, AZ; San Francisco, CA; Seattle, WA; Stamford, CT; and Tampa, FL. Survey respondents serve in a wide range of industries, including software and computing services (24%), financial services (14.6%), media/publishing (11%), healthcare/pharmaceuticals (10.4%) and retail/FMCG (6.7%). http://www.harveynash.com/usa/services/it_services/documents/USCIOsurvey_final.pdf 14 Challenges of the CIO Stay Current with Emerging Technology • • • • MIT’s technologyreview.com CIO social networks Seminars Technology fairs “Online delivery and taming disruptive technology key themes for 2008” McNevin, Ambrose. Viewed 3/20/08. CIO Magazine. December 7, 2007. http://www.cio.co.uk/concern/alignment/news/index.cfm?articleid=2367&pagtype=allchandate&pn= 2 15 Challenges of the CIO Attract and Retain IT Staff in a Competitive Market • 60% of CEOs, CIOs, and other C-level executives reported insufficient IT staff as a problem • Demand for IT workers is very high • Top 3 factors of IT staff retention • Career advancement • Financial rewards based on company advancement • Innovation and risk 1. “Not Enough IT Workers on Staff, Survey Finds” Dubie, Denise. Viewed 3/18/08. NetworkWorld December 13, 2008. http://www.networkworld.com/news/2008/021308-it-worker-shortage.html 2. “What Do Employees Really Want?” Finegold, David, PhD. Viewed 3/20/08. LiNE Zine http://www.linezine.com/7.2/articles/dfwderw.htm 16 Challenges of the CIO Manage Change • Resistance to change: one reason businesses do not take full strategic advantage of technology • CIOs must learn to manage people • CIOs must lead by example IBM Global Services. “The New CIO: Change Partner and Business Leader” May 2007. http://www-935.ibm.com/services/us/cio/pdf/wp_cio_leadership_forum_g510-6605-00.pdf 17 Our CIO Case Studies We interviewed four different CIOs in four different working environments to see how they stack up against the demographics and each other. 18 Dan Ross CIO of Missouri • Appointed in January 2005 with a mandate for IT consolidation and modernization • 37 • • • • years with the state Deputy Secretary of State Highway Department National Park Service No previous IT experience • B.A. Industrial Relations Lincoln University • Master’s of Public Policy Administration Univ. of MO Interview with Dan Ross: CIO of Missouri 19 Vinny Ferrari CIO of Edward Jones • • • • • • Joined Edward Jones in 2003 as Senior Director, Information Systems division after a 22-year career in technology on Wall Street. Named principal in the firm in 2004 Named to the firm’s Management Committee in 2006 Assumed the role of CIO in 2007 Education: Bachelor’s degree in economics from Ursinus College in Pennsylvania Started off at Wall Street as a “Quant” Interview with Vinny Ferrari: CIO, Edward Jones 20 Mark Counts Director of Internal Technology • Joined RubinBrown in December 2006 • Bachelors Degree in Business Administration, Minor in Accounting from UMSL • 14 years of Technology and Accounting experience Interview with Mark Counts: IT Director, RubinBrown LLP 21 Eric Gorham Director of Internal Technology • Began work at REJIS in 1983 • Associate’s in Applied Science Data Processing from STLCC-Meramec • Certifications – Computer Programming & Operations • Graduate of SIM RLF Interview with Eric Gorham: Director of IT, REJIS 22 Organizational Backgrounds • In 2007, there were an estimated 5,878,415 residents • The FY08 Budget is roughly $7.9 Billion • Budgetary Funds are Divided into 18 General Categories • Within these categories are the budget allowances for the 15 Major State Agencies • The Governor expects to have a $200 million dollar surplus by year-end Office of Social and Economic Analysis, University of Missouri Extension http://www.oseda.missouri.edu/ State Budget Summary, Fiscal Year 2008 http://www.oa.mo.gov/bp/budpress08/budpress08.pdf 24 • Founded in 1871 • US employees: 30,326 • Employees outside U.S: 2,037 • Services in 3 countries: US, UK & Canada • 2006 revenue: 3.5 Billion Edward Jones Investments. (2008, April 1). In Wikipedia, The Free Encyclopedia. April 3, 2008, from http://en.wikipedia.org/w/index.php?title=Edward_Jones_Investments&oldid=202624312 25 • The firm's 10,000-plus financial advisors work directly with more than 7 million clients to understand their personal goals - from college savings to retirement • Create long-term strategies for client’s investments • Embraces the importance of building long-term, face-to-face relationships with clients Edward Jones Investments. (2008, April 1). In Wikipedia, The Free Encyclopedia. April 3, 2008, from http://en.wikipedia.org/w/index.php?title=Edward_Jones_Investments&oldid=202624312 26 • Highest in investor satisfaction with full service brokerage firms, three years in a row. – J.D Power & Associates • For the eighth year, Edward Jones was named one of the “100 Best Companies to work for in America” by FORTUNE magazine in it’s annual listing • Edward Jones ranked #29 overall. The firm ranked #9 on the magazine’s Best Large-Sized Company List (FORTUNE January 22, 2007) • Ranked #1 among the nation’s top 7 brokerage firms for the 15th consecutive year (Registered Representative, December 2007) Edward Jones Investments. (2008, April 1). In Wikipedia, The Free Encyclopedia. April 3, 2008, from http://en.wikipedia.org/w/index.php?title=Edward_Jones_Investments&oldid=202624312 27 • What is the average yearly IT budget? None • Approval process for IT Projects • Approval from Business Owner needed for IT Projects • IS Working Group prioritizes the projects • The PMO (Program Management office) will obtain CIO's signature • CIO will obtain CFO's signature (if IT Project cost >$250,000) and Managing Partner's signature (if IT Project cost >$1,000,000) Interview with Vinny Ferrari: CIO, Edward Jones 28 RubinBrown is the 2nd largest public accounting firm in St. Louis. The firm provides accounting and business consulting services to closely held and publicly traded companies in specialized market sectors as well as non-profit and public sector organizations. 29 • Founded 1952 • 2 locations: St. Louis & Kansas City • 300+ Team Members, 51 Partners • Inside Public Accounting Report 2007 • RubinBrown is ranked #44 among America’s Largest Accounting/Consulting Firms (ranked by U.S. net revenue) • Business Journal Book of Lists 2007 • St. Louis: RubinBrown is ranked #2 (ranked by number of local CPAs) • Kansas City: RubinBrown is ranked #14 (ranked by number of local CPAs) Inside Public Accounting “IPA’s Top 100 Accounting Firms 2007” August 2007 Volume 21, Number 8 http://www.plattgroupllc.com/top100_2007.pdf St. Louis Business Journal “Book of Lists 2007” Accounting Firms, CPAs December 2007 Kansas City Business Journal “Book of Lists 2007” Accounting Firms: CPAs 2007 30 • Sells Computer Services to Government Agencies, Local Law Enforcement, and Municipalities • Annual Revenues $16,000,000 • Annual IT Budget of $10,000,000 Interview with Eric Gorham: Director of IT, REJIS 31 What is the Reporting Structure? 32 Governor Lt. Governor Commissioner. of Office of Admin. CIO State Legislature IT Staff 14 Agency Heads MODOT Conservation Committee Interview with Dan Ross: CIO of Missouri 33 Managing partner Jim Weddle COO Norm Eaker Human Resources IS Business Develop Software IS Business Infrastructure IS Chief Technology Office Information Systems CIO Vinny Ferrari IS Infrastructure Services IS Network Services IS Planning, Quality & Control IS Procurement Interview with Vinny Ferrari: CIO, Edward Jones 34 Compensation Committee RubinBrown Board Staffing Business Units Finance Committee Financial Management Chairman Risk Management Committee Human Resources Managing Partner Marketing Office Managing Partners Technology Support Industry Group Assurance Architects Automotive Contractors Health Care Home Builders Hospitality Law Firms Manufacturing Mortgage Bankers Not-For-Profit Public Sector Real Estate Interview with Mark Counts: IT Director, RubinBrown LLP Corporate Finance & Forensic Tax Mergers & Acquisitions Plan Audits SALT Litigation Services Wealth Mgmt Internal Audit Strategic Client Development Information Technology Valuation Investment Advisors SEC Benefits Small Business Family Office 35 General Manager Director of Administration Director of IT (CIO) Senior Manager Applications Senior Manager Network Services Applications Staff Director of Client Services Senior Manager Operations Network Staff Operations Staff Interview with Eric Gorham: Director of IT, REJIS 36 How Do They Get Along With the CEO? Dan Ross’ Relationship with the Governor • Frequently Speaks with the Governor and the Commissioner of the Office of Administration • Monthly reports • Has worked with the Governor for years • Handpicked as CIO Interview with Dan Ross: CIO of Missouri 38 Mark Counts’ Relationship with the Managing Partner • Informal meetings twice weekly • Monthly formal lunch meeting • Bi-annual formal evaluation sessions • Formal meetings with equity partners at the firm “Even with all that communication, it’s still not enough!” Interview with Mark Counts: IT Director, RubinBrown LLP 39 Eric Gorham’s Relationship with the Governor • Very open • Meet several times a week-both formal and informal • One-on-One and in group settings • Discuss client and business issues • Open door policy • GM takes an active interest in IT Interview with Eric Gorham: Director of IT, REJIS 40 What Keeps Them Up at Night? 41 • Dan Ross: Disaster Recovery! • Vinny Ferrari: Security Issues “The State’s IT facilities are not yet adequately capable of recovering data in the event of a widespread disaster.” • Mark Counts: Data loss or physical equipment loss; Protection from hackers • Eric Gorham: System Availability Interview with Dan Ross: CIO of Missouri Interview with Eric Gorham: Director of IT, REJIS Interview with Mark Counts: IT Director, RubinBrown LLP Interview with Vinny Ferrari: CIO, Edward Jones What They Do - How They Do It 43 Dan Ross • IT Staff 1200 • • • • Cost efficient IT solutions Large project management Change management Gets project approval from COA & governor • NASCIO member • Represent the State “There is one thing IT should never be and that is static. There is always a way to improve on what we are doing. It is definitely strategic.” – Dan Ross • Push for IT funding Interview with Dan Ross: CIO of Missouri 44 Mark Counts • Oversees the technology support department, ensuring all RubinBrown departments and groups are making the most effective use of available technology • Participates in the planning, design, implementation and support of cost-efficient technology solutions Interview with Mark Counts: IT Director, RubinBrown LLP 45 Vinny Ferrari • People: You need to know the people • Process: Based on the business need, you may need to break the process • Business and Technology: We are in the financial services business Interview with Vinny Ferrari: CIO, Edward Jones 46 Eric Gorman • Budgeting, Purchase approvals, proposals • Dealing with clients • Work with GM staff on marketing, development and other issues • Meeting with 1st and 2nd level management teams • Getting involved with staff and projects • Emails, paperwork, etc. Interview with Eric Gorham: Director of IT, REJIS 47 Successes and Challenges 48 Successes/Innovations • Consolidated 14 of 15 state IT departments under the Office of Administration • Saved $9,000,000 in software licensing fees • Software is now ordered in bulk • Eliminated 50 unnecessary IT positions without firing • Interoperable radio system to connect police, fire departments, hospitals, and child protective services • Currently working on comprehensive, cooperative patient healthcare file system for Public Health Clinics Interview with Dan Ross: CIO of Missouri 49 Challenges • Data security: 218 attempted attacks per day • IT budget cuts • 2007 Dept. of Homeland Security cut IT grants • Constant battle with state legislature for funds • Attracting and retaining staff Interview with Dan Ross: CIO of Missouri 50 Successes/Challenges • Being more flexible with the business group • Helping to change the mindsets of people Interview with Vinny Ferrari: CIO, Edward Jones 51 Successes/Challenges • FY ’07-’08 Plan: Revamping the infrastructure • FY ’08 – ’09 Plan: End-User Experience • Generational changes in business environment • Working to understand decisions made by IT predecessors Interview with Mark Counts: IT Director, RubinBrown LLP 52 Successes/Challenges • The Design, Construction, and Move-in to New Data Center Facility • Jail Management Services- Not troublesome from a development or management perspective, but initial acceptance and client/market growth • Better Marketing Materials • More Client Interaction Interview with Eric Gorham: Director of IT, REJIS 53 Comparison of Data 54 Comparison of Data Dan Ross IT Budget Mark Counts Vinny Ferrari Eric Gorman Statistics $218 mill. N/A Per Project $10,000,000 Varies State worker. No IT Accounting and IT IT IT IT Years as CIO 3 1.4 1 10 Tenure of 4.5 years # of IT Staff 1200 5 4000 140 Varies Strategic Tactical Strategic Strategic Tactical Prior Background Tactical / Strategic 55 Conclusion What We Have Learned • Regardless of the work environment, many CIOs face similar challenges. • The Role of the CIO is constantly changing. Today, CIO’s are faced with increasingly higher expectations and more responsibility. A CIO must be many things to many peopleBusiness strategist, technology innovator, change manager, project advocate, and budget watchdog. • The CIO has gone from a small departmental role, to a key force in shaping and improving business processes. 56 References 1. Dorothy E. Leidner “How incoming CIOs transition into their new jobs”MISQE,March 2007, volume 6,Issue1 2. Jerry Luftman, “ An update on business-IT alignment:”A Line” has been drawn”,MISQE, Sept 2007, volume6,ssue 3 3. Chris Curran, “CIO advisory board response to “IT in 2010:the next frontier” MIS, Dec 2006, volume5, Issue4 4. Heather A, Smith, “IT in 2010:the next frontier” MIS, Sep 2006, volume 5, Issue 5. Jerry Lufftman, “key issues for IT executives 2005”,MIS, June 2006, volume 5, Issue 6. Dorothy E. Leidner, “How CIO’s manage IT during economic decline:surviving and thriving amid uncertainty” MISQE, March 2003, volume2, Issue 1 7. Fortune, “100 Best Companies to Work for in America” January 22, 2007 http://money.cnn.com/magazines/fortune/bestcompanies/2007/snapshots/29.html 8. Inside Public Accounting “IPA’s Top 100 Accounting Firms 2007” August 2007 Volume 21, Number 8 http://www.plattgroupllc.com/top100_2007.pdf 9. St. Louis Business Journal “Book of Lists 2007” Accounting Firms, CPAs December 2007 10.Kansas City Business Journal “Book of Lists 2007” Accounting Firms: CPAs 2007 11. ITAA June 22, 2005 Press Release - Minorities http://www.itaa.org/eweb/Dynamicpage.aspx?webcode=PRTemplate&wps_key=0bf6f8eb-20ab-4906-957d2ffa85ea205b 12. J.D. Power and Associates, “Investor Satisfaction Among Brokerage Firms” July 24, 2007 13. Office of Social and Economic Analysis, University of Missouri Extension Viewed 3/20/08. http://www.oseda.missouri.edu/ 57 References (cont.) 14. State Budget Summary, Fiscal Year 2008 Viewed 3/20/08. http://www.oa.mo.gov/bp/budpress08/budpress08.pdf 15. “Not Enough IT Workers on Staff, Survey Finds” Dubie, Denise. Viewed 3/18/08. NetworkWorld December 13, 2008. http://www.networkworld.com/news/2008/021308-it-worker-shortage.html 16. “What Do Employees Really Want?” Finegold, David, PhD. Viewed 3/20/08. LiNE Zine http://www.linezine.com/7.2/articles/dfwderw.htm 17. “Online delivery and taming disruptive technology key themes for 2008” McNevin, Ambrose. Viewed 3/20/08. CIO Magazine. December 7, 2007. http://www.cio.co.uk/concern/alignment/news/index.cfm?articleid=2367&pagtype=allchandate&pn=21 18. Huber, Bill. “The New Face of IT Leadership” Technology. Inc. Viewed 3/21/08. http://technology.inc.com/managing/articles/200702/huber.html 19. IBM Global Services. “The New CIO: Change Partner and Business Leader” May 2007. http://www935.ibm.com/services/us/cio/pdf/wp_cio_leadership_forum_g510-6605-00.pdf 20.“Expanding the Innovation Horizon,” The IBM Global CEO Study 2006 http://www935.ibm.com/services/uk/bcs/pdf/g510-6259-01-the-global-ceo-study-2006.pdf 21.Gottschalk,Peter. "IS/IT Leadership Roles," hicss, p. 7055, 33rd Hawaii International Conference on System Sciences-Volume 7, 2000 22.“IBM Survey: CIO Role Is Changing; CEOs Need to Further Align IT and Business to Drive Innovation and Growth” Zane, Randy. Press Release Viewed 3/20.08. June 19,2007. 58