Date post: | 13-Jan-2015 |
Category: |
Education |
Upload: | ibm-new-zealand |
View: | 1,682 times |
Download: | 2 times |
© 2010 IBM Corporation
Implications for the CIOPoint of View Presentationof CIO Implications of the 2010 IBM CEO Study: Capitalizing on Complexity
20 & 21 July 2010
© 2010 IBM Corporation2
CIO Implications of the IBM Global CEO Study 2010
• IBM executed the 2010 CEO study called Capitalizing on Complexity, culling the insights from over 1,500 interviewed CEOs.
• This is part of a larger program of C-suite executives, which recently included the 2009 CIO study.
• Findings of the CEO study focused on complexity in the modern business arena, with CEO focus on creativity, customers, and operational dexterity.
• As CIOs are key collaborators and enablers of the CEO’s agenda, the results of this study have profound implications for the CIO’s own agendas and thought processes.
• Although having very different competencies, the CEOs & CIOs interviewed often had complementary views and priorities about business.
• The implications for CIOs provide additional insight into how they can better support the CEO while improving the effectiveness of his or her own responsibility.
Introduction and overview
A new IBM CEO study was conducted: Capitalizing on Complexity
The results have interesting and significant implications for CIOs
CEO
CIO
© 2010 IBM Corporation3
CIO Implications of the IBM Global CEO Study 2010
2005 study
2004 study 2008 study
2007 study
2008 study2005 study2003 studyTotal interviews: 450 Total interviews: 889 Total interviews: 1230
Total interviews: 1130
Total interviews: 404
Total interviews: 456
Total interviews: 320
2010 studyTotal interviews: 1917
CFO studies
CEO studies
2006 studyTotal interviews: 765
CHRO studies
2009 studyTotal interviews: 393
CSCO study
2009 CIO study (NEW)Total interviews: 2598
Face-to-face: 2598
Total interviews: 1564 Face-to-face: 1564
2010 CEO study
Recent studies of interest to the CIO
The IBM Global CIO and CFO studies are part of our C-suite series
© 2010 IBM Corporation4
CIO Implications of the IBM Global CEO Study 2010
Agenda
CFO and CIO studies CEOs view of the world Outperformers
CIO implications of: Embody Creative Leadership Reinvent Customer Relationships Build Operating Dexterity
Wrap Up & Questions
© 2010 IBM Corporation5
CIO Implications of the IBM Global CEO Study 2010
The study represents organizations in 60 countries and 33 industries
Note: The CEO response sample has been weighted based on 2008 Actual Regional GDP of the IMF World Economic Outlook, October 2009;* Growth Markets include Latin America, Asia Pacific (excluding Japan), Middle East and Africa
13%Communications
25%Distribution
18%Financial services
24%Industrial
20%Public
Sectors
25%Growth markets*
21%North America
42%Europe
12%Japan
In this largest known sample of face-to-face CEO interviews, we spoke with over 1,500 CEOs and public sector leaders
Regions
© 2010 IBM Corporation6
CIO Implications of the IBM Global CEO Study 2010
The study represents different-sized organizationsin 78 countries and 19 industries
In our first Global CIO Study 2009, we spoke face-to-face with over 2,500 CIOs to understand their goals and challenges
Sector
Public18%
Distribution24%
Financial Services
21%
Industrial24%
Others2%Communications
11%
Source: IBM Global CIO Study 2009
Organization Size
1,000-10,000 Employees
50%
>10,000 Employees
34%
<1,000 Employees
16%
Geography
North America
24%
Japan6%
Western Europe
38%
Rapidly Developing
Markets32%
© 2010 IBM Corporation7
CIO Implications of the IBM Global CEO Study 2010
Successful CIOs blend three pairs of roles that seem contradictory, but are actually complementary
By integrating these three pairs of roles, the CIO makes innovation real, raises the ROI of IT and expands business impact
Source: IBM Global CIO Study 2009
AblePragmatist
SavvyValue Creator
RelentlessCost Cutter
CollaborativeBusiness Leader
InspiringIT Manager
MakingInnovation real
Raising the ROI of IT
Expandingbusiness impact
InsightfulVisionary
AN
Z
ANZ
ANZ
© 2010 IBM Corporation8
CIO Implications of the IBM Global CEO Study 2010
The Global CFO Study 2010 is the largest known CFO-level study of its kind with over 1,900 participants
Organization Size
<=$500MM 25%
$501MM to $1B 15%
>$1B to $5B 28%
>$5B to $10B
11%
>$20B14%
>$10B to $20B
7%
Source: IBM Global CFO Study 2010
Sector
Public13%
Communications 13%
Industrial25% Distribution 28%
Financial Services
20%
Others1%
Geography
Asia Pacific
27%
EMEA 42%
Americas31%
© 2010 IBM Corporation9
CIO Implications of the IBM Global CEO Study 2010
Using Regression analysis, we developed a model that segmented participants into four profiles based on capabilities and maturity
Finance Profiles
Source: IBM Global CFO Study 2010
Finance Efficiency
Business InsightLow High
Low
High23%
12%
32%
33%
© 2010 IBM Corporation10
CIO Implications of the IBM Global CEO Study 2010
Comparing the agenda of each, we see remarkable alignment between the studies
CEO Themes CIO Priorities CFO PrioritiesEmbody creative leadership
Business intelligence and analytics
Risk management and compliance
Measuring and monitoring business performance
Supporting and managing enterprise risk
Reinvent customer relationships
Customer and partner collaboration
Aligning finance with the business
Build operating dexterity Business process management
Continuous process improvement and business improvement
Source: IBM Global CEO Study 2010IBM Global CIO Study 2009 IBM Global CFO Study 2010
A focus on these priorities turns Strategy into execution.
© 2010 IBM Corporation11
CIO Implications of the IBM Global CEO Study 2010
Expect high/very high level of complexity over 5 years
Currently experiencing high/very high level of complexity
32%
more
“Complexity is increasingly multi-faceted. It presents an opportunity and a threat at the same time.”
Yoichiro Ushioda, Chairman and CEO,JS Group Corp, Japan
Experienced and expected level of complexity
79%
60%
Expect high/very high level of complexity over 5 years
Feel prepared for expected complexity
30%
Complexity gap*
“The world is non-linear, so the ability to cut through complexity relies on processing a large amount of information quickly and extracting nuggets to make quick decisions. Building advantage will be an outcome of dealing with complexity better than our competitors”
Julian Segal, Director and CEO,Caltex Australia Limited, Australia
Expected level of complexity and preparedness to handle
49%
79%
Today’s complexity foreshadows an even more complex future
Source: 2010 CEO study
Source: IBM Global CEO Study 2010
© 2010 IBM Corporation12
CIO Implications of the IBM Global CEO Study 2010
Change Needed Past ChangeSuccess
In the 2008 CEO study a similar “capability” gap was identified regarding managing change
The Change Gap* Triples
* Difference or ‘gap’ between expected level of change needed and past success in managing change
“We have seen more change in the last ten years than in the previous 90.”Ad J. Scheepbouwer, CEO, KPN Telecom
Change Needed Past ChangeSuccess
2006 2008
Source: IBM Global CEO Study 2008
Change Needed
No/limited Change
Moderate Change
Substantial Change
No/limited Success
Moderate Success
Successful
Past Change Success
22%CHANGE GAP*8%
CHANGE GAP*
6%
11%
83%
19%
20%
61%
13%
22%
65%
12%
31%
57%
© 2010 IBM Corporation13
CIO Implications of the IBM Global CEO Study 2010
13
On average, only 41% of projects were considered successful. But the top 20%—the Change Masters—reported an 80% success rate.
44% of all projects failed to meet either time, budget or quality goals, while 15 % either stopped or failed to meet all objectives
Average Project Success Rates
The top* 20% of organizations reported an average project success rate of 80%, reflecting a 95% increase above the average share of successful projects
Change Masters vs. Change Novices
PROJECTS THAT EITHER MISSED ALL GOALS OR WERE STOPPED
15%
PROJECTS THAT DID NOT MEET EITHER TIME, BUDGET OR QUALITY GOALS
44%
PROJECTS THAT FULLY MET THEIR OBJECTIVES
41%
95%SUCCESS RATE INCREASE
BOTTOM 20% CHANGE NOVICES
8%
41%
80%
AVERAGE TOP 20% CHANGE MASTERS
Share of successful projects
A/NZ Average = 35%
Only 11% Change
Masters in A/NZ
A/NZ 49%
A/NZ 17%
© 2010 IBM Corporation14
CIO Implications of the IBM Global CEO Study 2010
Increasing CEOs recognize that Technology is driving much ofthis change….
Source: IBM Global CEO Study 2010
Three most important ‘external’ forces over the next three years
And that the impact of Technology will continue to increase in reshaping the competitive landscape
A/NZ 52%
A/NZ 36%
A/NZ 42%
A/NZ 42%
© 2010 IBM Corporation15
CIO Implications of the IBM Global CEO Study 2010
Complexity gap*
“Really, I am not afraid of complexity at all. On the contrary, this just motivates me.”
Jacques Pellas, Secrètaire Général, Dassault Aviation, France
* Complexity gap = Difference between expected complexity and the extent to which CEOs feel prepared to manage it
Lo
ng
-te
rm,
stea
dy-
sta
te
per
form
anc
e
Short-term,crisis performance
Top 50 percent
Standouts
22% Gap 6%
Gap
52% Gap 35%
Gap
Top
50
perc
ent
Standouts are also better prepared to manage the expected complexity
In the CEO Study we identified “Standout” organisations that delivered superior performance during both the long term and recent short term
© 2010 IBM Corporation16
CIO Implications of the IBM Global CEO Study 2010
“Outperformers” across recent studies show similarities
CEO Study 2010
“Standouts”
CFO Study 2010
“Value Integrators”
CIO Study 2009
“High Growth”
MCW Study 2008
“Change Masters”
Embody Creative Leadership
High focus on enterprise risk management
Work with business to co-create and champion innovation
Top management sponsorship and understanding of change challenge.
Reinvent Customer Relationships
Drive integration of information across the enterprise
Actively use collaboration and partnering technologies… Proactively craft data into actionable information
Build Operating Dexterity
Continuous process improvement
Closely involved in co-creating the business strategy
Consistent use of good, solid change management methodology
© 2010 IBM Corporation17
CIO Implications of the IBM Global CEO Study 2010
• Creativity is #1 leadership quality• Drive change in the organization to
stay ahead of market and use of wide range of communication styles and tools
• Break with status quo of industry, enterprise and revenue models
• Simplify operations and products to better manage complexity
• Use iterative strategies, make quick decisions and execute with speed
• Integrate globally, increase cost variability and exploit partnering to increase agility
• “Getting closer to customers” is the single most important theme
• Better understand customer needs through collaboration and info sharing
• Exploit the information explosion to deliver unprecedented customer service
Standouts capitalize on complexity in three ways
© 2010 IBM Corporation18
CIO Implications of the IBM Global CEO Study 2010
Decision making and its technological supporter, Business Intelligence and analytics, ranked high for both CEOs and CIOs
54%more
Thorough decisions Quick decisionsBoth
42%15% 43%
41%31% 28%
Standouts
Others
Ways in which to achieve rapid change over next five years: Decision Making
Source: IBM Global CEO study 2010
86%
80%
77%
76%
73%
70%
Business intelligence and analytics
Virtualization
Risk management and compliance
High growth Low growth
The most important visionary plan element for CIOs: Business Intelligence
Source: IBM Global CIO study 2009
A/NZ 100%
A/NZ 92%
A/NZ 100%
A/NZ 95%
A/NZ 89%
A/NZ 76%
© 2010 IBM Corporation19
CIO Implications of the IBM Global CEO Study 2010
Imperatives for CEOs Implications for the CIO
• Embrace ambiguity: Reach beyond silos, exemplify breakthrough thinking, act despite uncertainty.
• Take risks that disrupt legacy business models: Pilot radical innovations, continually tweak your models, borrow from other industries’ successes.
• Leapfrog beyond “tried-and-true” management styles: Strengthen your ability to persuade and influence, coach other leaders, use a wide range of communication approaches.
• Enable smarter decisions: Provide facts about the business through analytics, improve the decision-making process with technology, make ambiguity the realm of creativity
• Advocate the “art of the possible”: The CEO may not know what can be done with new technology -- the CIO can meet the CEO’s vision to what IT can help create
• Enable the collaborative enterprise through technology: CIOs have an important role in enabling new management styles across the organization. Technology is key to pursue more "viral communications" as a mode of communications, incorporate collaboration technology into daily interaction.
So what builds creative leadership?
“There is no innovation in my organization without the involvement of IT.”
Government CIO, Brazil
© 2010 IBM Corporation20
CIO Implications of the IBM Global CEO Study 2010
Standouts capitalize on complexity in three ways
• Creativity is #1 leadership quality• Drive change in the organization to
stay ahead of market and use of wide range of communication styles and tools
• Break with status quo of industry, enterprise and revenue models
• Simplify operations and products to better manage complexity
• Use iterative strategies, make quick decisions and execute with speed
• Integrate globally, increase cost variability and exploit partnering to increase agility
• “Getting closer to customers” is the single most important theme
• Better understand customer needs through collaboration and info sharing
• Exploit the information explosion to deliver unprecedented customer service
© 2010 IBM Corporation21
CIO Implications of the IBM Global CEO Study 2010
CEOs want to better understand customer needs and actively work with them
Better understanding of needs
New or different services
New or different products
New or different channels
82%
70%
69%
61%
51%
CEOs’ view of “How customer expectations will change over the next 5 years”
Respondents answered “very large extent”
Source: IBM Global CEO study 2010
44%
68%
54%
74%
36%
58%
... and anticipate much greater levels of integration and transparency with customers
In five years, CIOs expect end-customers to continuously explore new channels...
High-growth CIOs proactively craft data into actionable information
High growth
Low growth
+37%
+55%
+61%
CIOs’ view of changes in customer interaction
Source: IBM Global CIO study 2009
A/NZ 37%
A/NZ 42%
A/NZ 67%
A/NZ 34%
A/NZ 85%
A/NZ 46%
© 2010 IBM Corporation22
CIO Implications of the IBM Global CEO Study 2010
Impact on organization of information explosion
29%more
More focus on insight and intelligence to realize strategy
18%more
49%
OtherCEOs
63%
Customer focusedCEOs
66%
OtherCEOs
78%
Customer focusedCEOs
“Customer relations will require near-real time information and the ability to change ‘on the fly’ which will require innovation.”
Energy and Utility CIO
Customer-centric CEOs will need customer-centric CIOs to fulfill their agendas
Customer focused CEOs use data...
... to generate insight and intelligence
Source: IBM Global CEO study 2010 Source: IBM Global CEO study 2010
© 2010 IBM Corporation23
CIO Implications of the IBM Global CEO Study 2010
• Honor your customers above all else: Unprecedented level of focus, heightened customer exposure for every employee, measure what customers value.
• Use two-way collaboration to sync with customers: Make customers part of your team, solicit customer wants, co-innovate and interact with customers in new ways, deliver true process transparency.
• Profit from the information explosion: Tap the value of limitless data, use analytics to translate data into insight into action that creates business results, share information freely to build trust and improve customer relationships.
• Build a Customer-centric IT organization: The opportunity is to embed customer centricity in everything the IT organization does, be able to measure customer value, and provide insight to guide business decisions based on that
• Enable customer interaction and collaboration: The CIO will also need to design customer interaction/transaction/collaboration systems to enable collaboration with massive customer bases and to understand and use collaboration information.
• Embrace business analytics to embrace customer understanding: Develop strengths in collecting, aggregating, analyzing, and optimizing operations based on new analytics and predictive capabilities
So how do you reinvent customer relationships?
Imperatives for CEOs Implications for the CIO
The challenge is to change from a “push-model to a pull-model, where the customer expresses requirements and IT answers immediately.
Banking Industry CIO, France
© 2010 IBM Corporation24
CIO Implications of the IBM Global CEO Study 2010
Standouts capitalize on complexity in three ways
• Creativity is #1 leadership quality• Drive change in the organization to
stay ahead of market and use of wide range of communication styles and tools
• Break with status quo of industry, enterprise and revenue models
• Simplify operations and products to better manage complexity
• Use iterative strategies, make quick decisions and execute with speed
• Integrate globally, increase cost variability and exploit partnering to increase agility
• “Getting closer to customers” is the single most important theme
• Better understand customer needs through collaboration and info sharing
• Exploit the information explosion to deliver unprecedented customer service
© 2010 IBM Corporation25
CIO Implications of the IBM Global CEO Study 2010
Standouts simplify operations and products to better manage complexity
Others
Standouts
30%more
61%
47%
CEOs see changes to operating strategy: Simplify
Source: IBM Global CEO study 2010
Others
Standouts
16%more
45%
39%
The most crucial capability for execution success over the next 5 years is execution speed
Source: IBM Global CEO study 2010
“The aim is adaptability, the tool is execution speed.”Dr. Faruk Yarman, General Manager,
Havelsan, Turkey
High growth
Low growth 22%more
50%
61%
CIOs think business processes will be completely standardized and low cost
Source: IBM Global CIO study 2009
A/NZ 59%
A/NZ 46%
© 2010 IBM Corporation26
CIO Implications of the IBM Global CEO Study 2010
Execution speed and global integration provide Standouts with increased dexterity
60%more
10%
Others
16%
Standouts
Most crucial capabilities for execution success over the next 5 years
CEOs focus on global integration
Source: IBM Global CEO study 2010
Many CIOs foresee a strongly centralized infrastructure in five years
76% 76%
High growth
Low growth
Source: IBM Global CIO study 2009
A/NZ 78%
A/NZ 78%
© 2010 IBM Corporation27
CIO Implications of the IBM Global CEO Study 2010
• Simplify whenever possible: Simplify interactions with customers, simplify products and services by masking complexity, simplify for the organization and partners.
• Manage systemic complexity: Put complexity to work for your stakeholders, take advantage of the benefits of analytics.
• Promote a mindset of speed and flexibility: Act quickly, push execution speed, course-correct as needed.
• Be “glocal”: Leverage the world through partners, constantly tune your operating model – global where possible, local where necessary.
• Simplify IT whenever possible: IT can develop and deploy simplified, streamlined business processes to improve efficiency and simplify operations
• Manage systemic complexity: Proactively manage the complexity and efficiency of the IT environment, leverage analytics for management to better understand complexity
• Enable operational speed and flexibility: Enable the organization to act quickly through an adaptable, efficient, and flexible IT environment and through strategic service providers
• Embrace “glocal” IT operations: Leverage the world through partners, constantly tune your operating model to use the right skills in the right place at the right time.
So what are the steps to build operating dexterity?
CEO Imperatives Implications for the CIO
“Simplification and standardization are key strategies that we have been using for several years to reduce existing and future complexity.”
Brenda Barnes, Chairman and CEO,Sara Lee, United States
© 2010 IBM Corporation28
CIO Implications of the IBM Global CEO Study 2010
Imperatives for CEOs Implications for the CIO
Seizing the upside of complexity for CEOs and CIOs
Honor your customers above all else
Use two-way communications to sync with customersProfit from the information explosion
Embrace ambiguity
Take risks that disrupt legacy business modelsLeapfrog beyond “tried-and-true” management styles
Simplify whenever possible
Manage systemic complexity
Promote a mindset of being fast and flexibleBe “glocal”
Reinventcustomer
relationships
Buildoperatingdexterity
Embodycreative
leadership
Build a customer-centric IT organization
Enable customer interaction and collaborationEmbrace business analytics embrace customer relationships
Enable smarter decisions
Advocate the “art of the possible”
Enable the collaborative enterprise through technology
Simplify IT whenever possible
Manage systemic complexity
Enable operational speed and flexibility
Embrace “glocal” IT operations
© 2010 IBM Corporation29
CIO Implications of the IBM Global CEO Study 2010
Standouts capitalize on complexity in three ways
Do you understand what technology is on the horizon to empower your CEO and executive team to achieve their vision?
Is your IT environment designed to be flexible and adaptable to change, including its use of flexible operational models and service providers?
Is your IT environment capable of capturing, synthesizing, and analyzing diverse information sets for analytics purposes and ultimately for optimizing customer operations?
© 2010 IBM Corporation30
CIO Implications of the IBM Global CEO Study 2010