Chief Information Officer

The Role . . .

Greymark Inc. 2013

Over the last several years, I have read a number of reports, articles and surveys about issues facing Information Technology shops, and the role that the CIO plays in the organization. Most of those papers have dealt with the private sector. Having spent the last twenty-three years in Ottawa, I was interested in looking at the role of CIO with a focus on the Government of Canada. I recently met with a number of the CIOs within the Government of Canada and the private sector in Ottawa, and reviewed my notes from engagements and meetings over the last couple of years to develop this perspective on the role of CIO. Through our Centre of Innovation we have sought to provide tools and articles that might improve the IT industry. That is the intent of this article. The rain in the background was chosen because rain is a marvel that constantly renews, as IT provides change to our everyday lives. Thank you to all the CIOs who took the time to talk with me. Your opinions and insights provided useful perspectives into current challenges and forecasts for the future, and our conversations helped to sculpt these views on the role of the CIO, now and in the future.

Don Grey Managing Partner Greymark Inc. www.greymark.ca

Topics

Perspective ………………………… 3

Today’s View ………………………. 5

Personality …………………………. 7

Technology Leadership …………… 9

Team Management ……………….. 10

Project / Change Services ……….. 11

IT Practice Management …………. 13

The Future …………………………. 14

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Perspective

CIOs have been placed increasingly under the spotlight and assessed for their ability to provide value to the enterprise. The question has been asked repeatedly if IT is a value-added service or just a commodity. CIOs have had every aspect of their personalities scrutinized. Questions have been asked if they belong in the boardroom, whether they inter-relate well with other senior executives, if they understand the business they serve, whether they communicate effectively, and what other executives think of them. The scrutiny is to be expected. IT started out as Data Processing, employing huge machines to crunch numbers for accounting, insurance and banking applications. Those monoliths, although crude in today’s terms crunched the numbers and completed tasks that previously took hundreds of people to do. In half a century, a relatively short period of time in history, the IT industry has evolved to

the point that almost every aspect of business is now dependent on information technology. Corporations and Government cannot function without IT in today’s world. IT is so pervasive today that it plays as much of a role in our personal lives as in the business world, and the technology now overlaps the two. That is an amazing amount of change. In fifty years we would expect a couple of generations of change, but the industry has in fact experienced three eras in that time frame. IT started with the mainframe era, then moved to the distributed processing era in the 1980s and then on to the Internet era. Moving from the back room numbers role to a critical foreground business role, there are bound to be growing pains. And, because the role is performed by humans who are all unique, each one interrelates with his/her host organization in a unique way. Even though standards continue to play a leading role in the evolution of IT, each CIO can be perceived anywhere in the range of “geek” to “visionary leader”. And the CIO is not always given the choice of the role they play, for many executives have a preconceived expectation of the role and do not encourage deviation. Every role within the IT shop has evolved so dramatically that new roles are being 3

created every year to address new requirements. As these new roles are added, old roles are not necessarily removed, and the IT organization must constrain itself to the bounds of its budget, thus putting more strain on the IT shop to do more with the same or less resources. And yet, as the IT shop advances it must also ‘drag the bag of stones’ that is the past. For example, a large number of IT shops are still maintaining COBOL code that was written in the 70’s and 80’s and still serves the enterprise well. With such rapid progress in hardware and software it is almost impossible for any organization to maintain its legacy assets and continue to research and implement the latest modern technology. Just managing the interfaces between various systems and technologies is a huge undertaking in and of itself. As a career path, the CIO role is typically the apex of the IT career. After having worked hard to achieve this significant role within the enterprise, what does the CIO have to look forward to? Most CIOs don’t move on to other positions within the organization. Rather, for advancement, they move to larger and more complex enterprises that will further test their skills and provide suitable challenges. Beyond that many join the consultant ranks and possibly the speaking tour.

Most of what we read about the CIO role concerns those in the private sector. In those organizations, there is typically only one CIO per company and a limited amount of business lines. In government, there is one CIO for each Department of the government enterprise and many business programs from tax collection through national defence to immigration and food safety. The private sector also operates on a different business model than government, and thus the culture of business within Departments is different than in companies. Government leaders tend to be more risk adverse than their private sector equivalents and technological innovation tends to lag several years behind the private sector. IT may be similar in nature across all enterprises, but the environment in which it is applied is different between private sector and government. So, how does the CIO get along in the enterprise of the second decade of 21st century? In this article we look at the role of the CIO through some key aspects of the job.

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Today’s View

For several years the focus on IT and the CIO role was that IT is a service that can be treated as a commodity. With such a view there was a tendency to look at buying this commodity at the lowest price, as surely any reputable supplier could provide this service. Many articles talked about outsourcing of the IT function, and there was a sustained view that expenditures in IT should be reduced. There has recently been a change in focus from efficiencies in expenditures to innovation that will gain competitive advantage. Although executives still expect reliability and sustainability in IT operations, those in the boardroom are now more focused on the internet and “apps”. The emphasis is now on developing applications rather that the laborious process of building business cases. Executives see the proliferation of “apps” available on the internet and expect much of that flavour from their IT groups. They see that they can download a solution quickly and cheaply, use it to their advantage for a period of time and replace it with a more advanced app when one comes available. This view creates an opportunity and a problem for the CIO. The opportunity provided is the chance to develop applications without the impediment of

extensive cost-benefit and business cases. The introduction of more rapid development methodologies over the last several years has also aided development in this environment. There are also applications available through SaaS (Software as a Service) arrangements and as Cloud applications.

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Developing smaller applications quickly also enables the IT shop to deliver results with short turn around. This provides the opportunity to shed the image that was built up over years of dubious results from

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large-scale systems development projects. The problem is that development of business applications is much more complex than small single-focus personal apps that one downloads off the internet. Business applications have a great deal more business rules, or logic, that has to be programmed and interfaces to other applications, such as the financial system. The more complex the business logic, the more complex and costly the development. An important point that executives must hold in the forefront of their view of IT is that business applications are not developed to be tossed aside and replaced with a more advanced one every few years. Business applications are purchased or developed on a long-term basis with the viewpoint of continuous improvements that provide longevity. A risk associated with building a stable of small, less costly applications is the cost of maintaining the interfaces associated with these apps. For example, having one supply management system means one interface to the financial system and other functional systems such as manufacturing. For each transaction within the supply system, data must be transferred to other related systems through an interface sub-system. Should there be multiple supply management systems, there are costs associated with the maintenance of each of these interfaces, each and every time there

is change made to any of the suite of related systems. In today’s environment it is very important to have an Enterprise Architecture for the organization. The architecture provides the high level view of all the applications the corporation requires. That way each new development, or purchase can be planned as an incremental addition, or replacement within the systems portfolio. To build applications without the Enterprise Architecture is equivalent to building an office tower without blueprints.

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Security is also a critical aspect of the IT portfolio that must remain front and center as one of the largest risks to the corporation. Given that the United States and others are now using technology as part of their on-going war on terrorism, we can expect that the focus on security will continue to increase for many years to come. In today’s BYOD (Bring Your Own Device)

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technology environment the role of CIO has become even more important. The CIO role is transforming faster than any other role in the organization. Everyone else in the boardroom needs to remain attentive just to keep up with the aspects that affect their part of the business. The CIO must not only keep up with the changes, but must be a champion who can describe the newest technology to others around the boardroom table, and envision the pros and cons of each new technology as it may be adopted for business purposes. Many of the articles in the marketplace suggest that the CIO will become a strategic organizational resource. In this role, the CIO will evolve into a leading member of the executive team rather than aspiring just to have representation at the boardroom table.

“visionary leader”. It would appear that the ultimate CIO is someone who has sufficient “geek” characteristics to manage the technology aspects of the job, who gets the ‘big picture’ aspects of the business, and understands how to transform that knowledge into IT solutions that greatly benefit the organization.

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Alignment to the business is a critical priority and much of that alignment can be attributed to the personality of the CIO. If the IT shop is not aligned to the business, there will be problems that will affect both the business and the IT shop over time. The IT shop enables the business and to be effective these groups must do more than just cohabitate. They are not only dependent upon each other, they each thrive when they work together for mutual benefit. The CIO must develop relationships with all of the executive team and get to know how

Personality

Industry surveys rate business alignment as the characteristic that executives find most lacking in their CIOs. When executives expect IT operational stability and sustainability from their CIO, they admire the “geek” quality in that person who understands and makes all that infrastructure ’stuff’ work . However, when they expect business alignment, they respect the person who they see as a

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their perspective fits into the overall business model. The knowledge of what drives the business relates directly to how applications and technology are deployed by the enterprise. Each of the other executives has special skills and knowledge that the CIO must try to understand, especially in terms of how it affects the business, and how it relates to IT. The CEO knows best the business goals and results to be attained, while the Chief Financial Officer knows what can be invested and ways to use money to the advantage of the corporation. The CIO needs to develop an understanding of the big picture across all aspects of the enterprise, including how this business fits in the marketplace, the key business drivers, the financial environment, risks and opportunities. The Visionary Leader will have the expertise to gain the trust of the executive team, to understand the goals and workings of the organization, and to propose IT solutions that will benefit the corporation. The Geek, on the other hand may well have difficulty communicating with the executive team. This will require the Geek to find other means of building the relationship and gaining the trust of the executive team. Regardless of the personality of the CIO, executives need to ensure the integration of IT into the planning environment. When

executives have learned the role of IT, they understand that they need to have senior IT people in their business planning sessions working with their teams so that IT options may be explored as part of that conversation. Working together builds the relationship and enables the discussion of options as part of the initial direction and plan. That result can be significantly better than IT responding to a specification after the fact.

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This is why the CIO should have a seat at the boardroom table. As CIOs need to be aligned to the business, the executive team needs to recognize that IT should to be part of the decision process around the table. Relationships and communication are key to IT being an integrated function within the enterprise. The CIO who succeeds in creating this environment is a leader who provides immense value.

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Technology Leadership

Since electronic computing began there has been constant change. The amount of change has varied through the decades, but there has been change to technology products, to the software and to the businesses that adopt new things as part of the evolution. The present time is certainly an interesting one from a technology perspective. While we have the need for increased security to ward off cyber threats, the market is swamped with mobile devices that continue to evolve faster than policy, and the Cloud is bringing about major changes in the way we manage information, networks and infrastructure. IT is a profession of change. IT is the modern industrial revolution with no foreseeable end to the products and benefits that will flow from the ingenuity of man. We should expect to continue to see rapid change for many years to come.

One of the significant roles of the CIO and his team is to understand new technologies as they become available and then be able to present these new products and services to the executive team. Executives need to be taught about these new technologies and they need to understand the pros and cons, windows of opportunity and associated costs. The effective CIO is one who can teach and provide all the relevant information in a simplistic and easy to understand format that executives quickly comprehend. This role is also of critical importance because it is an aspect of the job that helps control chaos. Without good technology leadership, users will quickly adopt new technology without regard to IT fundamentals, such as security, and the entire IT environment will erode quickly and at high cost to the organization.

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Team Management

People are what make an IT shop tick. The more skilled they are, the more creative they are. The more creative they are, the better they contribute to the business enterprise. There are those who do not want to spend the money to have a first class employee base as they believe their people will be ‘stolen’ by others and they will spend large sums of money training people who will end up working elsewhere. Surveys of CIOs show that most believe in spending the money to train their people and have top end skills. The majority have the right attitude.

Many CIOs keep much of the HR need in their heads and work through regular management meetings to keep up with needs. That approach doesn’t provide a good solution for the CIO, or the employees. Employees need to know where they stand and what they need to accomplish to advance in their career. A good HR tool maintains an inventory of individual competencies and position competencies, and enables people to plot a career path. The goal is to have employees take an active role in planning and managing their career path, and for management to be able to plan with and prompt employees. I have yet to come across an IT group that has an effective HR planning environment for the entire group. I have seen pockets where a particular manager has an influence with their staff, and that is to be applauded. Today’s generation of IT workers do not have the loyalty of the previous generation, thus they require more attentiveness to their needs. CIOs need to pay more attention to this aspect of their business as the industry shifts to delivery concepts like shared services. Creating a top end IT group involves good communication, good planning and building a creative and fun environment to work in.

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IT shops should not experience “the shoemaker’s children” syndrome when it comes to team management. There is a need to have an HR strategy and plan that incorporates employees and contract staff.

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Project / Change Services

Projects are the change agent for any organization. Businesses utilize projects to adapt to new business needs and to introduce change that gains competitive advantage. Because IT is such an integral part of all business functions, most projects involve an IT component. Projects have been the Achilles heel of IT. They were too long saddled with the full responsibility for projects without proper participation from the business people who were the true benefactors and owners of the business results. This resulted in high rates of project failure and a black mark on the IT community at large. I have not spoken to a CIO in the private sector recently where this has not been corrected. Government, however is a different matter. In my experience there was almost no ownership of projects from business executives. This resulted in numerous problems with their projects. IT groups have invested heavily in new methodologies, project management training, and audits and reviews to improve the success rate of their projects. Over the last twenty years, the success rate for projects with an IT component has only risen by six percent according to the Standish Group Chaos Report. That means that there is now a success rate of 37%.

Rather than investing more in IT solutions, the best answer may be for the CIO to pull back from the brink. IT people have always been overly helpful. This has led to them leading projects that should be led by business people. If that is still the case, the CIO should withdraw the troops from the front line and wait for the business people to ante up and lead their own projects. IT people should only lead the IT sub-project. Projects bring about change. Change is often difficult for people to adjust to. It is important for the CIO to help the business adjust to changes brought about by projects they are involved in. Change management is not just the training of users on new computer systems, but the bigger picture of what change will be forthcoming and how it will affect the individual. When IT people work with their business counterparts to introduce change far in advance, resistance 11

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and anxiousness is turned into anticipation well before implementation time. Transformation management is another critical aspect of projects that business executives need to champion and CIOs need to actively support. A big part of any business project is the implementation of change, such as new policies and procedures. The business transformation plan must integrate the IT changes that will be part of the project. These include the review and cleansing of current data, data conversion and all the associated implementation activities.

project reviews and houses the enterprise project management office.

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If the Government of Canada is serious about realizing improvements in the success rate of its projects, it’s time to start measuring success. Maybe it’s time for an annual report on projects that demonstrates the strategy, the plans and quantitative improvements. Given the billions of dollars spent annually on projects, this type of approach should have been in place several years ago.

In the boardroom, all members of the executive team have to work as a team to ensure that projects are successful. There is sufficient industry experience now to enable companies to address issues in advance of starting a project and ensure that risks do no become reality. Companies that are serious about achieving project success should have a Project Improvement Office that sets the standards for projects, helps with project preparations, provides leadership in project training, leads ongoing

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IT Practice Management

Many of the IT shops I have worked with have experienced the “shoemaker’s children” syndrome, and I have observed than they are not adept at applying good IT principles to understanding their own needs and developing, or implementing solutions. A good example is the management of “service requests” that come through the door. Although most IT groups have a front-line process and software for managing and reporting on user problems, they often lack when managing the portfolio of new projects and change requests. It’s time that each IT shop has an IT Management Architecture so they understand their own business and can foresee what tools and applications they need to run it. It’s also time for the CIO to have an annual Report Card that shows the state of the IT environment in respect to the annual and multi-year budget. Executives have a right to understand what the money is being spent on, and what results are expected. That report card should be linked to a maturity model for IT across the enterprise. Speaking of architecture, an excellent tool for developing a formal understanding of the business is the Enterprise Architecture. Very few organizations have one, but they all need one. This should be a mandatory asset for all enterprises. The architecture

captures the business functions, the information used to perform them, who within the organization does what, what technology is used to perform what functions, etc. An Enterprise Architecture will define the systems that are needed to support the business and depict the gaps between what is needed versus what exists at the current time.

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I recently spoke with a CIO about the importance of Enterprise Architecture and although he admitted he had never seen one, he thought the concept was out of date in today’s rapidly changing world. I assured him that the opposite was in fact the reality. It is more important than ever to understand the big picture of total IT requirements for an organization, and how the pieces fit together. CIOs need to continue to invest in the fundamental tools of the IT trade,

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including SDLC methodologies, software development methods, project management methodologies, standards, best practices, governance, risk management, etc. And, they need to invest in training their staff in these fundamental skills. As IT budgets have been reduced over the years, training dollars have dwindled. Many of the training budgets I have seen are so low they are less than adequate. That needs to change or there will be long-term repercussions.

In the Government of Canada, one has to ask “what will be the future role of the CIO?” The shared services initiative has removed more than half the function and budget from most IT groups. There is an initiative underway to consolidate the “back room” applications (SAP and PeopleSoft), which will further reduce the workload of each IT group. If the function is reduced by 70% to 80%, what role does the future CIO play in government?

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Industry experts see the need for the CIO to have a more integrated presence in the boardroom, but how is such a senior level position justified if the budget and functional area of responsibility is so greatly reduced? Although the Government of Canada is in cost-cutting mode, now may be the time to exploit the excess capacity in the CIO realm with a view to the future. There are a number of large-scale issues that need to be

There have been all variety of predictions as to the future of IT. As we have experienced waves of centralization followed by a more distributed IT function and back again, it seems probable that this trend will be part of the future of IT. The nature of the business of IT will continue to evolve. Information management and analytics will continue to grow as we continue to devote more attention to these areas over the next several years. Cloud computing and Software as a Service (SaaS) will have an impact on the core, or “back room” application portfolio. More vendors with simpler solutions will enter this market and challenge applications that are cumbersome and expensive to maintain.

The Future

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addressed in the government “enterprise” over the next few years, and a number of issues that have needed addressing for some time. One need only review the Auditor General’s reports of the last few years to get a sense of some of these issues. Now would be a good time to form CIO task forces to address the major issues facing government. Harnessing the synergy of the CIO population is rarely done. With over forty CIOs in a position to participate, several task forces could strategically change the landscape of government computing for the foreseeable future.

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“The DNA of the CIO: Opening the Door to the C-suite.” Ernst & Young, September 2012. “CIO 20/20” HP, November 2012. “The Evolving Role of the CIO in Today’s Businesses.” Modis, February 2012. “The Essential CIO: Insights from the Global Chief Information Officer Study.” IBM, July 2011. “The Future CIO: Critical Skills and Competencies.” Debra Hurst Allison, Miami University, May 2010. “The Evolution of the CIO: An EDUCAUSE Issues Brief.” EDUCAUSE, October 2009. “The New CIO Leader: Setting the Agenda and Delivering Results” By Marianne Broadbent, Associate Dean, Melbourne Business School & Gartner Fellow and Ellen Kitzis, Group Vice President, Gartner Executive Programs, Harvard Business School Press, 2004. “The Evolving Role of the CIO.” Jeanne W. Ross and David F. Feeny, May 2000.

Reference Sources