The Role of the Chief Information Officer

The Role of the The Role of the Chief Information OfficerChief Information Officer

Presentation byPresentation byEliot Lee and Mark GuthrieEliot Lee and Mark Guthrie

November 12, 2005November 12, 2005

http://www.umsl.edu/

What Do These People What Do These People Have in Common?Have in Common?

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Presentation OverviewPresentation Overview

Chief Information Officer profileChief Information Officer profile- Demographics- Demographics- Salary data- Salary data- Employment information- Employment information- Topic relevance- Topic relevanceIn-depth case studies of 3 CIOsIn-depth case studies of 3 CIOsBest practices: Role of the CIOBest practices: Role of the CIO

Role of the CIO Is EvolvingRole of the CIO Is Evolving

Quotable quote:Quotable quote:““It is no longer useful or meaningful to talk It is no longer useful or meaningful to talk about the ‘role of the CIO.’ ”about the ‘role of the CIO.’ ” – – Barb Gomolski, senior research director, Gartner, Nov. 27, 2000 Barb Gomolski, senior research director, Gartner, Nov. 27, 2000 11

RationaleRationale No single “one-size-fits-all” position descriptionNo single “one-size-fits-all” position description CIOs wear many hats; work in various rolesCIOs wear many hats; work in various roles Different types of CIOs Different types of CIOs CIOs are driven by background and interestsCIOs are driven by background and interests Industry and organizational differences affect roleIndustry and organizational differences affect role

Definition: Definition: Chief Information OfficerChief Information Officer

Job title is commonly given to the senior executive in charge of Job title is commonly given to the senior executive in charge of information technology and computer systems that support an information technology and computer systems that support an organization’s business goals.organization’s business goals.

As IT has become increasingly important, the CIO is typically As IT has become increasingly important, the CIO is typically viewed as a key strategist within the organization.viewed as a key strategist within the organization.

In many companies, the CIO reports directly to the Chief Executive In many companies, the CIO reports directly to the Chief Executive Officer (CEO). In some companies, the CIO sits on the Executive Officer (CEO). In some companies, the CIO sits on the Executive Board. Board.

Usually, a CIO proposes IT strategies to achieve business goals Usually, a CIO proposes IT strategies to achieve business goals and works within an established budget.and works within an established budget.

- SearchCIO.com Definitions - SearchCIO.com Definitions 22

CIO DemographicsCIO Demographics

87% are male87% are male70% moved up through the IT ranks70% moved up through the IT ranks5 years, 9 months is average time as CIO5 years, 9 months is average time as CIO4 years, 6 months is average time in current job4 years, 6 months is average time in current job40% report to CEO40% report to CEO85% are responsible for enterprise-wide IT85% are responsible for enterprise-wide IT76% do not plan to outsource outside of U.S.76% do not plan to outsource outside of U.S.

- Source: - Source: CIO MagazineCIO Magazine 33

CIO Regional CIO Regional Salary ComparisonSalary Comparison

PercentilePercentileSource Source 44

Midwest: Midwest: ChicagoChicago

East Coast:East Coast:New YorkNew York

West Coast:West Coast:Los Los

AngelesAngeles

Southeast:Southeast:MiamiMiami

2525thth PercentilePercentile

$173,434$173,434 $186,163$186,163 $179,640$179,640 $157,841$157,841


$214,922$214,922 $230,696$230,696 $222,611$222,611 $195,598$195,598


$272,348$272,348 $292,337$292,337 $282,093$282,093 $247,862$247,862

CIO in the GovernmentCIO in the Government

In 1996, President Clinton In 1996, President Clinton signed what has become signed what has become known as the known as the Clinger-Clinger-Cohen Act.Cohen Act.

This act required major This act required major Federal Agencies to Federal Agencies to establish the position establish the position of of CIOCIO. .

- CSA High Technology Research Database - CSA High Technology Research Database with Aerospace 2001 with Aerospace 2001 55

CIO Employment Turnover CIO Employment Turnover

5 Years:5 Years: Average tenure of a CIO in a single Average tenure of a CIO in a single position – examples:position – examples: Joseph Eckroth, former CIO of Mattel (Toys), left Joseph Eckroth, former CIO of Mattel (Toys), left

position after 5 years. Joined New Century Financial position after 5 years. Joined New Century Financial (Real Estate Investment Trust)(Real Estate Investment Trust)

Patricia Morrison, former CIO of Office Depot, left Patricia Morrison, former CIO of Office Depot, left after 3.5 years to join Motorolaafter 3.5 years to join Motorola

Frank Hood, former CIO Krispy Kreme Doughnuts, Frank Hood, former CIO Krispy Kreme Doughnuts, left shortly to join Quiznos left shortly to join Quiznos 66

Some CIOs seek resume-building experiences Some CIOs seek resume-building experiences rather than a long-term career with a single rather than a long-term career with a single employer. employer. 77

CIO Turnover CIO Turnover Rate ComparisonRate Comparison

77 business executives surveyed – majority 77 business executives surveyed – majority believe CIO turnover is equal to other senior believe CIO turnover is equal to other senior positions positions 88**

8% 8% – “CIO turnover higher than other senior – “CIO turnover higher than other senior positions in the company”positions in the company”

62%62% – “CIO turnover is the same” – “CIO turnover is the same”

31%31% – “CIO turnover is lower than other senior – “CIO turnover is lower than other senior executive positions”executive positions”

* Darwinmagazine.com* Darwinmagazine.com

CIO Employment OutlookCIO Employment OutlookCIO job search during downturn could last as CIO job search during downturn could last as long as 12 to 18 monthslong as 12 to 18 monthsRecruiting for CIOs increased in 2005Recruiting for CIOs increased in 2005NationwideNationwide CIO job listings increased 30% from 2004CIO job listings increased 30% from 2004 Overall IT sector hiring increased 37% from 2004 Overall IT sector hiring increased 37% from 2004 99

LocallyLocally,, CIOs are increasing hiring of IT CIOs are increasing hiring of IT professionals, according to Robert Half professionals, according to Robert Half Technology Technology 11% of CIOs surveyed in St. Louis planned to add to 11% of CIOs surveyed in St. Louis planned to add to

staff; 10% surveyed planned to reduce staffstaff; 10% surveyed planned to reduce staff Net 1% of CIOs planned to hire in the third quarter of Net 1% of CIOs planned to hire in the third quarter of

2005 – increase of 2 percentage points from second 2005 – increase of 2 percentage points from second quarter quarter 1010

Chief Information OfficerChief Information OfficerCorporate Case StudiesCorporate Case Studies

Three different companies.

Three unique CIOs.

Three insightful perspectives.

CIO Profile: Centene CorporationCIO Profile: Centene Corporation

Glendon Schuster Glendon Schuster 1111

Chief Information OfficerChief Information OfficerCentene CorporationCentene CorporationJoined company in company Joined company in company June 2005 on an interim basis. June 2005 on an interim basis. Became permanent in October Became permanent in October 2005.2005.Senior Management Team Senior Management Team MemberMemberB.S., Electrical EngineeringB.S., Electrical Engineering

TitleTitle CompanyCompany DescriptionDescriptionPartnerPartner Accenture ConsultingAccenture Consulting Provider of programming Provider of programming

consultantsconsultants

Head of Information Head of Information TechnologyTechnology

Gamut InteractiveGamut Interactive A start-up company A start-up company focusing on electronic focusing on electronic couponing interacting couponing interacting with TV/Print Mediawith TV/Print Media

Development LeadDevelopment Lead Deluxe CheckDeluxe Check Check productionCheck production

Various roles (designer, Various roles (designer, application architect, application architect, development lead, etc)development lead, etc)

WalgreensWalgreens PharmacyPharmacy

CIO Profile: Glendon Schuster CIO Profile: Glendon Schuster Professional IT BackgroundProfessional IT Background

Centene Centene Organizational ChartOrganizational Chart

Michael NierdorfPresident and

Chief Executive Officer (CEO)

Glendon SchusterChief Information Officer (CIO)

CIO reports to the CEO

Centene Corporate Centene Corporate OverviewOverview

Managed care provider for MedicaidManaged care provider for MedicaidServices:Services: claims processing and client reporting claims processing and client reportingOperates healthcare plans in Indiana, Kansas, Missouri, New Operates healthcare plans in Indiana, Kansas, Missouri, New Jersey, Ohio, Texas and WisconsinJersey, Ohio, Texas and WisconsinContracts with other companies to provider special services Contracts with other companies to provider special services including behavioral health and disease managementincluding behavioral health and disease management288 IT employees – 159 full-time corporate; 79 contractors288 IT employees – 159 full-time corporate; 79 contractors

YearYear Total Company Total Company RevenueRevenue

Annual Annual IT BudgetIT Budget

20042004 $1 Billion $1 Billion ProprietaryProprietary

20052005 $1.5 Billion $1.5 Billion ProprietaryProprietary

IT Culture IT Culture at Centeneat Centene

159 Full-Time Employees159 Full-Time Employees79 Consultants79 ConsultantsDynamicDynamicExpandingExpandingReorganizingReorganizingVery structuredVery structured

Creating more customer-based reportingCreating more customer-based reportingIncreasing disease managementIncreasing disease managementDevelopment of “trending” systemsDevelopment of “trending” systemsRegional Health Information OrganizationsRegional Health Information OrganizationsAbility to bring fast reliable information to Ability to bring fast reliable information to patients, doctors and hospitalspatients, doctors and hospitals

The Biggest IT Challenges The Biggest IT Challenges at Centeneat Centene

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

What Keeps the Centene What Keeps the Centene CIO Awake at Night?CIO Awake at Night?

CIO Relationship with CEOCIO Relationship with CEO

Reports directly to the CEOReports directly to the CEOWeekly senior management meetingsWeekly senior management meetingsAverage CIO communication with CEO Average CIO communication with CEO occurs five times per week – “IT rules” at occurs five times per week – “IT rules” at Centene.Centene.Redefining the role of the Redefining the role of the IT departmentIT departmentMajor emphasis on teamworkMajor emphasis on teamwork

CIO’s Biggest IT Success CIO’s Biggest IT Success at Centeneat Centene

Major reorganization of the IT Major reorganization of the IT department.department.Aligned the IT groups within Aligned the IT groups within functional areas.functional areas.

Quotable quote:Quotable quote:““Change by evolution, not revolution.”Change by evolution, not revolution.”

– – Glen Schuster, CIOGlen Schuster, CIO

How does IT drive business How does IT drive business at Centene?at Centene?

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

Trends Impacting Centene in the Trends Impacting Centene in the Next Five YearsNext Five Years

Disease managementDisease management Design systems that do trending analysis Design systems that do trending analysis

based on the amount and types of claims based on the amount and types of claims received received

Develop software that can help predicate a Develop software that can help predicate a patient’s predisposition to a disease patient’s predisposition to a disease

Customer-based reportingCustomer-based reportingRegional health information systemsRegional health information systems

The ‘Untold’ Story The ‘Untold’ Story from the CIO Perspectivefrom the CIO Perspective

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

CIO Profile: Express Scripts Inc.CIO Profile: Express Scripts Inc.Patrick McNamee Patrick McNamee 1212

Chief Information OfficerChief Information OfficerExpress Scripts Inc.Express Scripts Inc.Joined company in February Joined company in February 20052005Senior Management Team Senior Management Team MemberMemberCorporate Resource Council Corporate Resource Council MemberMemberM.S., Electrical and Computer M.S., Electrical and Computer Engineering and B.S., Engineering and B.S., Biomedical Engineering – Biomedical Engineering – Marquette UniversityMarquette University

CIO Profile: Patrick McNamee CIO Profile: Patrick McNamee Professional IT BackgroundProfessional IT Background

TitleTitle CompanyCompany DescriptionDescription

President and General President and General ManagerManager

MISYS Physician MISYS Physician SystemsSystems

Provider of information Provider of information management software management software for physician practicesfor physician practices

President and General President and General ManagerManager

Orthopedic Equipment Orthopedic Equipment Corp. (General Electric)Corp. (General Electric)

Surgery X-ray Surgery X-ray manufacturing business manufacturing business (GE Medical Systems)(GE Medical Systems)

Chief Information and Chief Information and Quality OfficerQuality Officer

NBC (GE)NBC (GE) Television NetworkTelevision Network

Chief Information Officer Chief Information Officer and General Managerand General Manager

GE Transportation GE Transportation SystemsSystems

eBusiness eBusiness TransportationTransportation

Chief Information OfficerChief Information Officer GE PowerGE Power Global Power PlantsGlobal Power Plants

Express Scripts Express Scripts Corporate OverviewCorporate Overview

Leading pharmacy benefits management (PBM) companyLeading pharmacy benefits management (PBM) companyServices:Services: claims processing, mail pharmacy, specialty prescription claims processing, mail pharmacy, specialty prescription fulfillment, benefit design consultation, drug utilization review, formulary fulfillment, benefit design consultation, drug utilization review, formulary management, and drug researchmanagement, and drug researchWide range of corporate and organizational clients including Dell Computer, Wide range of corporate and organizational clients including Dell Computer, United States Department of Defense (DoD), CitigroupUnited States Department of Defense (DoD), CitigroupRecognized in Recognized in Information Week’sInformation Week’s “500 Most Technologically Progressive “500 Most Technologically Progressive Companies”Companies”1,030 IT employees – 772 full-time corporate; 258 contract1,030 IT employees – 772 full-time corporate; 258 contract



20042004 $15.1 Billion$15.1 Billion $190.4 Million$190.4 Million

20052005 $17.1 Billion$17.1 BillionProjectedProjected

$223.8 Million$223.8 Million

Express Scripts Express Scripts Organizational ChartOrganizational Chart

George PazPresident and


David LowenbergChief Operating Officer (COO)

Patrick McNameeChief Information Officer (CIO)

CIO reports to the COO

A ‘Typical’ Day for the A ‘Typical’ Day for the Express Scripts CIOExpress Scripts CIO

4 a.m. – Blackberry buzzes on night stand to alert about 4 a.m. – Blackberry buzzes on night stand to alert about a Severity One “Sev 1” critical systems issuea Severity One “Sev 1” critical systems issueJoins conference call to discuss troubleshooting and Joins conference call to discuss troubleshooting and assess impact on systems and usersassess impact on systems and usersHalf-hour to get ready for work at the officeHalf-hour to get ready for work at the officeTime allocation during the day:Time allocation during the day:1. Leadership and staff meetings1. Leadership and staff meetings2. Specific topical meetings (Corporate Resource 2. Specific topical meetings (Corporate Resource Council, Medicare Part D, Strategy/Planning)Council, Medicare Part D, Strategy/Planning)3. Dealing directly with employees (on-on-one meetings)3. Dealing directly with employees (on-on-one meetings)4. External boards: St. Louis CIO Forum, Community 4. External boards: St. Louis CIO Forum, Community Health and Patient Services (CHPS)Health and Patient Services (CHPS)

What Keeps the Express Scripts What Keeps the Express Scripts CIO Awake at Night?CIO Awake at Night?

Performance and reliability issues – No. 1 Performance and reliability issues – No. 1 priority of any IT organizationpriority of any IT organizationHuman resources, staffing – responsibility for Human resources, staffing – responsibility for nine direct reports; managing turnover; nine direct reports; managing turnover; developing leadershipdeveloping leadershipManaging changeManaging changeCommunication – ongoing at all levelsCommunication – ongoing at all levels

Quotable quote: “It’s all about communication Quotable quote: “It’s all about communication and sharing information.”and sharing information.” – Pat McNamee, CIO – Pat McNamee, CIO

CIO Perspective: Business, People, CIO Perspective: Business, People, and Technical Skillsand Technical Skills

PeoplePeople – Behaviors and values around – Behaviors and values around leadership and teamwork are paramount.leadership and teamwork are paramount.

BusinessBusiness – Express Scripts is in a complicated – Express Scripts is in a complicated business; expertise in healthcare is important.business; expertise in healthcare is important. TechnologyTechnology – Technical skills are very – Technical skills are very

important; however, technology is a important; however, technology is a “commodity.” (Nicholas Carr said this too!)“commodity.” (Nicholas Carr said this too!)

Quotable quote:Quotable quote: ““We have accountability and the creation We have accountability and the creation of teams that are of teams that are empoweredempowered … … non-bureaucratical.” non-bureaucratical.” – Pat McNamee, CIO– Pat McNamee, CIO


Weekly senior management meetingsWeekly senior management meetingsWeekly meeting with Chief Operating Weekly meeting with Chief Operating Officer (COO) – direct reporting lineOfficer (COO) – direct reporting lineAverage CIO communication with CEO Average CIO communication with CEO occurs five times per week – “IT matters” occurs five times per week – “IT matters” at Express Scripts.at Express Scripts.Single, dedicated operations teamSingle, dedicated operations teamTeamwork underscores everythingTeamwork underscores everything

CIO’s Biggest IT Success CIO’s Biggest IT Success at Express Scriptsat Express Scripts

In nine months on the job, reduced…In nine months on the job, reduced… Severity One “Sev 1” systems alerts – Severity One “Sev 1” systems alerts – 74%74% Outage minutes – Outage minutes – 60%60%How success was achieved:How success was achieved:1.1. Dedicated Sr. Director position created to focus Dedicated Sr. Director position created to focus

on supporting systems performance and reliabilityon supporting systems performance and reliability2.2. Changed responsibility of applications team byChanged responsibility of applications team by

reallocating infrastructure ownership/accountability to new reallocating infrastructure ownership/accountability to new teamteam

2.2. Heavy investment in performance monitoring – “robots” provide Heavy investment in performance monitoring – “robots” provide early alertsearly alerts

Lessons learned:Lessons learned:Goals from IT strategic plan can be achieved with proper Goals from IT strategic plan can be achieved with proper planning, hard work, appropriate allocation of resources and planning, hard work, appropriate allocation of resources and team effort. IT teams team effort. IT teams cancan cross the “finish line,” although there cross the “finish line,” although there are always new goals to attain in IT.are always new goals to attain in IT.

The Biggest IT Challenges The Biggest IT Challenges at Express Scriptsat Express Scripts

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

How Does IT Drive Business How Does IT Drive Business at Express Scripts?at Express Scripts?

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

Trends Impacting Express Scripts Trends Impacting Express Scripts in the Next Five Yearsin the Next Five Years

Price pressurePrice pressure Develop lower-cost solution (impacts IT spend)Develop lower-cost solution (impacts IT spend) Differentiate service (innovation, performance)Differentiate service (innovation, performance) Client and patient service group focuses on Client and patient service group focuses on

technology component (number of calls, technology component (number of calls, cost-per-call, etc.)cost-per-call, etc.)

Industry initiativesIndustry initiatives Carve-In Healthcare ProgramsCarve-In Healthcare Programs Consumer-Driven HealthcareConsumer-Driven HealthcareTransparencyTransparency Requires Express Scripts to develop tools that allow Requires Express Scripts to develop tools that allow

customers to understand the company’s programscustomers to understand the company’s programs Evolve Web portals to let customers truly see the Evolve Web portals to let customers truly see the

businessbusiness

CIO’s Most-Important CIO’s Most-Important Lesson LearnedLesson Learned

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


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

CIO Profile: Spartech Corp.CIO Profile: Spartech Corp.

Michael Lane Michael Lane 1313

Chief Information OfficerChief Information OfficerSpartech CorporationSpartech CorporationJoined the company in February 2001Joined the company in February 2001General management/auditing career General management/auditing career backgroundbackground

Quotable quote: “I never touch the keyboard, I am surrounded by good people.”Quotable quote: “I never touch the keyboard, I am surrounded by good people.” – – Michael Lane, CIOMichael Lane, CIO

Spartech Corp. Spartech Corp. Organizational ChartOrganizational Chart

George AbdPresident and


Randy MartinChief Operating Officer (CFO)

Michael LaneChief Information Officer (CIO)

CIO reports to the CFO

Spartech Corporate Spartech Corporate OverviewOverview

Largest plastic-sheet supplier in the U.S.Largest plastic-sheet supplier in the U.S.45 manufacturing plants worldwide 45 manufacturing plants worldwide Corporate headquarters in ClaytonCorporate headquarters in Clayton25 IT employees25 IT employees



20042004 $1.1 Billion$1.1 Billion N/AN/A

20052005 $1.4 Billion$1.4 Billion $9 Million$9 Million

““Best in St. Louis”Best in St. Louis”RelaxedRelaxedConsultant-like atmosphereConsultant-like atmosphere25 full-time employees – small staff 25 full-time employees – small staff supports large IT programsupports large IT program

IT Culture at IT Culture at Spartech CorporationSpartech Corporation

CIO’s Biggest IT Success CIO’s Biggest IT Success at Spartechat Spartech

Had upper management recognize IT as Had upper management recognize IT as an important department in the an important department in the organizationorganizationImplementation of VOIP network Implementation of VOIP network through out the companythrough out the companyImplementation of Oracle financial Implementation of Oracle financial systemssystemsProvide maximum support with minimum Provide maximum support with minimum staffstaff

Proving IT can deliver on it’s promisesProving IT can deliver on it’s promises

Smooth implementation of the ERP projectSmooth implementation of the ERP project

Keeping up on cutting-edge technologyKeeping up on cutting-edge technology

The Biggest IT Challenges The Biggest IT Challenges at Spartech Corporationat Spartech Corporation

How Does IT Drive How Does IT Drive Business at Spartech?Business at Spartech?

IT is “almost” a partner at Spartech.IT is “almost” a partner at Spartech.

4 years ago, IT was a “necessary evil.”4 years ago, IT was a “necessary evil.”


Reports to the CFOReports to the CFOWeekly senior management meetingsWeekly senior management meetingsAverage CIO communication with CEO Average CIO communication with CEO occurs 2 to 3 times per weekoccurs 2 to 3 times per week““IT is almost a partner” at Spartech.IT is almost a partner” at Spartech.

Trends Impacting Spartech Trends Impacting Spartech in the Next Five Yearsin the Next Five Years

Oil PricesOil Prices - Largest supplier of plastic sheets in America- Largest supplier of plastic sheets in America

Healthcare CostsHealthcare Costs - Healthcare costs are rising- Healthcare costs are rising

ChinaChina - China becoming a “major player” in the market- China becoming a “major player” in the market

CIO’s Most-Important CIO’s Most-Important Lesson LearnedLesson Learned

Don’t over promise.Don’t over promise.

Don’t jump the gun on technology.Don’t jump the gun on technology.

Under promise, over deliver.Under promise, over deliver.

Develop an efficient team.Develop an efficient team.


The leadership the position requires CIO to have The leadership the position requires CIO to have

CIO is salesmanCIO is salesman

CIO has to hire good peopleCIO has to hire good people

Loyalty is a “two-way street”Loyalty is a “two-way street”

CIO Best Practices:CIO Best Practices:People SkillsPeople Skills

IT executives fight image of being too technical, IT executives fight image of being too technical, introverted and tacticalintroverted and tactical Santa Clara University study notes that stereotyping Santa Clara University study notes that stereotyping

creates “missed organizational opportunities”creates “missed organizational opportunities” Study proposes that IT work “provides the best Study proposes that IT work “provides the best

possible training ground for senior managers.” possible training ground for senior managers.” 1414

Technical skills AND people skills are equally Technical skills AND people skills are equally importantimportant University of Dayton study found no differences University of Dayton study found no differences

between CIOs with technical backgrounds and those between CIOs with technical backgrounds and those with general management backgrounds with general management backgrounds 1515

CIO Best Practices:CIO Best Practices:InnovationInnovation

IT innovation is important for leading companiesIT innovation is important for leading companies CIO MagazineCIO Magazine study found 71% of CIOs stated that innovation study found 71% of CIOs stated that innovation

was a key element of their company’s business strategywas a key element of their company’s business strategy 80% of respondents stated that the CIO is responsible for 80% of respondents stated that the CIO is responsible for

corporate innovation corporate innovation 1616

More than half of 83 CIOs in the study said innovative IT ideas More than half of 83 CIOs in the study said innovative IT ideas have increased in the past two years have increased in the past two years 1717

65% of CIOs in the study said developing innovative IT ideas is 65% of CIOs in the study said developing innovative IT ideas is a “significant or dominant aspect of their roles.” a “significant or dominant aspect of their roles.” 1717

CIO should be committed to lead innovation; CEO should CIO should be committed to lead innovation; CEO should support optimistically for success support optimistically for success 1818

CIO should help business units identify IT new solutions CIO should help business units identify IT new solutions 1919

Smart companies partner with CIO to develop innovative e-Smart companies partner with CIO to develop innovative e-business initiatives business initiatives 2020

CIO role defined as “teacher” or “prophet” vs. “technologist” CIO role defined as “teacher” or “prophet” vs. “technologist” 2121

CIO Best Practices:CIO Best Practices:CommunicationCommunication

Clear communication is key. CIO should avoid Clear communication is key. CIO should avoid “techno-speak” and jargon “techno-speak” and jargon 2222

Organizational communication has a significant Organizational communication has a significant impact on:impact on: Employee attitudesEmployee attitudes Employee behaviorEmployee behavior Employee perceptions about managing Employee perceptions about managing

change change 2323

Quotable quote worth quoting again:Quotable quote worth quoting again: ““It’s all about communication and sharing information.”It’s all about communication and sharing information.” – – Pat McNamee, CIO, Express ScriptsPat McNamee, CIO, Express Scripts

IT project delaysIT project delaysStaffing and user demandsStaffing and user demandsCompetitionCompetitionManagement changesManagement changesVendorsVendors

Quotable quote:Quotable quote:"IT is like the CIA. Nobody knows our "IT is like the CIA. Nobody knows our successes, but the failures are public successes, but the failures are public knowledge."knowledge." – – Shawn Schwegman, CIO, Overstock.com Shawn Schwegman, CIO, Overstock.com 2424

Lessons Learned: Lessons Learned: Typical CIO Awake at NightTypical CIO Awake at Night

Lessons Learned:Lessons Learned:Status Impacts CIO RoleStatus Impacts CIO Role

CIOs in many organizations are CIOs in many organizations are challenged by internal perceptionschallenged by internal perceptionsIT is often perceived as having a lower IT is often perceived as having a lower status than other business functions status than other business functions 2525

Status can be defined as “recognition from Status can be defined as “recognition from the organization of the IT function’s the organization of the IT function’s capabilities and value.” capabilities and value.” 2525

Status does matter for CIOs Status does matter for CIOs Corporate culture affects statusCorporate culture affects status

Lessons Learned:Lessons Learned:OutsourcingOutsourcing

Room for outsourcing in non-mission Room for outsourcing in non-mission critical IT functionscritical IT functionsOutsourcing should only be done on call Outsourcing should only be done on call center functionscenter functionsCognizant Technology Solutions is the Cognizant Technology Solutions is the latest offshore services firm to report latest offshore services firm to report blockbuster year-over-year growth. blockbuster year-over-year growth.

- Information Weekly 11/1/2005 - Information Weekly 11/1/2005 2626

Lessons Learned:Lessons Learned:IT EffectivenessIT Effectiveness

Slow economic recovery created lean IT Slow economic recovery created lean IT organizationsorganizationsOpportunity to determine IT effectivenessOpportunity to determine IT effectivenessCIOs should have metrics for determining CIOs should have metrics for determining IT effectivenessIT effectivenessConsequence of not measuring IT Consequence of not measuring IT effectiveness is corporate ambiguity and effectiveness is corporate ambiguity and perception of the CIO “flying blind” perception of the CIO “flying blind” 2727

Role of CIO SummaryRole of CIO SummaryCIO role is still relevantCIO role is still relevantImportant for general managers to understand this Important for general managers to understand this pivotal senior positionpivotal senior positionCommunication, leadership, and people skills – essential Communication, leadership, and people skills – essential to CIO successto CIO success

Closing quote for discussion:Closing quote for discussion:““The role of the CIO could disappear within 10 years… The role of the CIO could disappear within 10 years… it’s only a matter of time until every ‘C’ level officer needs it’s only a matter of time until every ‘C’ level officer needs to have the same level of information as the CIO.”to have the same level of information as the CIO.”-- J.P. Rangaswami, CIO, Dresdner Kleinwort -- J.P. Rangaswami, CIO, Dresdner Kleinwort Wasserstein, at the 2005 Triple i Convention Wasserstein, at the 2005 Triple i Convention 2828

Reference SourcesReference Sources1 1 Gomolski, Barb, “CIOs Face Identity Crisis as the ‘One-Size-Fits-All’ Job Description No Longer Fits” Gomolski, Barb, “CIOs Face Identity Crisis as the ‘One-Size-Fits-All’ Job Description No Longer Fits” www.infoworld.comwww.infoworld.com, November, 27, 2000. (, November, 27, 2000. 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October 1, 2005., October 1, 2005.77 Strassmann, Paul A., “The Cost of Short-Term CIOs” Strassmann, Paul A., “The Cost of Short-Term CIOs” ComputerworldComputerworld, May 5, 2004, article reprint., May 5, 2004, article reprint.8 8 Darwinmagazine.com, http://64.28.79.73/learn/research/surveyreport.cfm?id=44 Viewed November 7, 2005.Darwinmagazine.com, http://64.28.79.73/learn/research/surveyreport.cfm?id=44 Viewed November 7, 2005.99 Kolbasuk McGee, Marianne, “Help Wanted: CIOs” InformationWeek, October 24, 2005, p. 92. 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Reference SourcesReference Sources1212 Patrick McNamee, CIO of Express Scripts Inc., interviewed in person by Mark Guthrie, October 31, 2005. Patrick McNamee, CIO of Express Scripts Inc., interviewed in person by Mark Guthrie, October 31, 2005.13 13 Michael Lane, CIO Spartech Corporation, interviewed in person by Eliot Lee, November 4, 2005.Michael Lane, CIO Spartech Corporation, interviewed in person by Eliot Lee, November 4, 2005.1414 DeLisi, Peter S. and Danielson, Ron, “Thinking Styles of IT Executives and Professionals” DeLisi, Peter S. and Danielson, Ron, “Thinking Styles of IT Executives and Professionals” MIT Sloan Management MIT Sloan Management ReviewReview, Summer 2002, Vol. 43, No. 4, p. 11., Summer 2002, Vol. 43, No. 4, p. 11.1515 Kwak, Mary, “Technical Skills, People Skills: It’s Not Either/Or” Kwak, Mary, “Technical Skills, People Skills: It’s Not Either/Or” MIT Sloan Management ReviewMIT Sloan Management Review, Spring 2001, Vol. , Spring 2001, Vol. 42, No. 3, p. 16.42, No. 3, p. 16.16 16 CIO Research Reports, “IT Enabled Innovation” CIO Research Reports, “IT Enabled Innovation” CIO.comCIO.com, April 1, 2005. (www2.cio.com/research/surveyreport.cfm?, April 1, 2005. (www2.cio.com/research/surveyreport.cfm?id=86, viewed November 3, 2005).id=86, viewed November 3, 2005).1717 Varon, Elana, “State of the CIO: Reality Check” Varon, Elana, “State of the CIO: Reality Check” CIO MagazineCIO Magazine, April 1, 2005. , April 1, 2005. 1818 Kuczmarski, Thomas D., “What Is Innovation? And Why Aren’t Companies Doing More of It?” Kuczmarski, Thomas D., “What Is Innovation? And Why Aren’t Companies Doing More of It?” Journal of Consumer Journal of Consumer MarketingMarketing, Vol., 20, 6, 2003, pp. 536-541., Vol., 20, 6, 2003, pp. 536-541.1919 Leidner, Dorothy E.; Beatty, Robert C.; and Mackay, Jane M., “How CIOs Manage IT During Economic Decline: Leidner, Dorothy E.; Beatty, Robert C.; and Mackay, Jane M., “How CIOs Manage IT During Economic Decline: Surviving and Thriving Amid Uncertainty” Surviving and Thriving Amid Uncertainty” MIS Quarterly ExecutiveMIS Quarterly Executive, Vol 2, No. 1, March, 2003, pp. 1-14., Vol 2, No. 1, March, 2003, pp. 1-14.20 20 Rifkin, Glenn, and Kurtzman, Joel, “Is Your E-Business Plan Radical Enough?” Rifkin, Glenn, and Kurtzman, Joel, “Is Your E-Business Plan Radical Enough?” MIT Sloan Management ReviewMIT Sloan Management Review, , Spring 2002, Vol 43, No. 3, pp. 91-95.Spring 2002, Vol 43, No. 3, pp. 91-95.2121 Nolan Norton Institute, “Say Goodbye to the CIO, Welcome to the Business Prophet” Nolan Norton Institute, “Say Goodbye to the CIO, Welcome to the Business Prophet” Information Management & Information Management & Computer SecurityComputer Security, , MCB University PressMCB University Press, 9, 2001, pp. 123-125., 9, 2001, pp. 123-125.2222 May, Thornton A., “Chief Information Officer ABCs” May, Thornton A., “Chief Information Officer ABCs” Information Management & Computer Security, MCB University Information Management & Computer Security, MCB University PressPress, Vol. 3, 5, 1995, pp. 23-24., Vol. 3, 5, 1995, pp. 23-24.23 23 Schraeder, Mike, “Organizational Assessment in the Midst of Tumultuous Change” Schraeder, Mike, “Organizational Assessment in the Midst of Tumultuous Change” The Leadership & Organization The Leadership & Organization Development JournalDevelopment Journal, Vol. 25, 4, 2004, pp. 332-348., Vol. 25, 4, 2004, pp. 332-348.24 24 cioupdate.com, cioupdate.com, http://www.cioupdate.com/insights/article.php/3561866, viewed November 2005http://www.cioupdate.com/insights/article.php/3561866, viewed November 2005 ..2525 Kaarst-Brown, Michelle L. “Understanding an Organization’s View of the CIO: The Role of Assumptions About IT” Kaarst-Brown, Michelle L. “Understanding an Organization’s View of the CIO: The Role of Assumptions About IT” MIS Quarterly ExecutiveMIS Quarterly Executive, Vol. 4, No. 2, June 2005, pp. 287-301., Vol. 4, No. 2, June 2005, pp. 287-301.2626 Information Weekly Information Weekly http://www.informationweek.com/showArticle.jhtml?articleID=171200304http://www.informationweek.com/showArticle.jhtml?articleID=171200304 11/1/2005, viewed 11/1/2005, viewed November 2005.November 2005.2727 Kurien, Priya; Rhaman, Was; and Purushottam, V.S. “The Case for Re-Examining IT Effectiveness” Kurien, Priya; Rhaman, Was; and Purushottam, V.S. “The Case for Re-Examining IT Effectiveness” Journal of Journal of Business Strategy,Business Strategy, Vol. 25, 2, 2004, pp. 29-36. Vol. 25, 2, 2004, pp. 29-36.2828 Riley, John, “Chief Information Officer’s Role Could Disappear ‘Within a Decade’” Riley, John, “Chief Information Officer’s Role Could Disappear ‘Within a Decade’” Computer WeeklyComputer Weekly, 9, 2005, p. 10., 9, 2005, p. 10.

http://www.cioupdate.com/insights/article.php/3561866,%20viewed%20November%202005

http://www.informationweek.com/showArticle.jhtml?articleID=171200304

Photo CreditsPhoto CreditsSlide 2:Slide 2:1.1. Sylvia Steinmann, CIO, Swiss Re Sylvia Steinmann, CIO, Swiss Re 2.2. Aaron Gibbs, CIO, St. Augustine’s CollegeAaron Gibbs, CIO, St. Augustine’s College3.3. Dennis Thiebeault, CIO, Curry CollegeDennis Thiebeault, CIO, Curry College4.4. Cindy Stoddard, CIO, Neptune Orient LinesCindy Stoddard, CIO, Neptune Orient Lines5.5. Jane Aboyoun, CIO, Reed Business InformationJane Aboyoun, CIO, Reed Business Information6.6. Craig Berry, CIO, UGSCraig Berry, CIO, UGS7.7. Beth Brigdon, CIO, Medical College of GeorgiaBeth Brigdon, CIO, Medical College of Georgia8.8. Beth Roose, CIO, Pennsylvania Dept. of TransportationBeth Roose, CIO, Pennsylvania Dept. of Transportation9.9. Sam Segran, CIO, Texas Tech UniversitySam Segran, CIO, Texas Tech University10.10. Terri Morgan, CIO, Railroad Retirement BoardTerri Morgan, CIO, Railroad Retirement Board11.11. Eric Jackson, CIO, Morehouse School of MedicineEric Jackson, CIO, Morehouse School of Medicine12.12. Lee Colaw, CIO, Pacific UniversityLee Colaw, CIO, Pacific University

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The Role of the Chief Information Officer

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