The Essential CIO 2011

8/4/2019 The Essential CIO 2011

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The

EssentialCIOInsights rom the

Global Chie Inormation

Ocer Study


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The illustration on the cover o this report represents

the more than 3,000 Chie Inormation Ocers

who spoke with IBM as part o this study. Each point

represents approximately 20 participants, and the

colors represent the our CIO Mandates identied

in our analysis: Leverage, Expand, Transorm and

Pioneer. For more detail, please turn to page 8.


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This study is based on ace-to-ace conversations with more than 3,000 chie inormation ocers worldwide.


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Jeanette A. HoranVice President and Chie Inormation OcerIBM Corporation


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A note to ellow CIOs

Welcome to the biennial IBM Global Chie Inormation Ocer Study,

refecting ace-to-ace conversations with over 3,000 CIOs rom

organizations o every size, sector and region. Through these conversations,

we have gained a stronger sense o the primary issues impacting CIOs

in the two years since our inaugural study.

One o the most compelling ndings in the study is that CIOs are now

increasingly in step with CEOs top priorities. One priority they agree

on is how critical it is or todays public and private sector organizations

to derive insight rom the huge volumes o data being amassed across

the enterprise, and turn those insights into competitive advantage with

tangible business benets.

And yes, some long-held assumptions remain true. Every CIO still has

to deliver excellence in the undamentals: the secure and reliable delivery

o inormation technology is one example. But it turns out that certaindistinctions among organizations are important in understanding how

CIOs can succeed in delivering against their businesses particular

strategic priorities.

At IBM, this means ocusing on IT solutionssolutions that enable

growth, accelerate enterprise perormance and transorm how people

work. To achieve these goals, our mandate includes:

Innovating through cloud computing, business analytics, acquisitions

and other strategic initiatives.

Automating and integrating business processes across the enterprise.

Executing an IT strategy to support the workplace o the uture,

including a fexible system to support both mobility and the

consumerization o IT.

Letter rom the Chie Inormation Ocer 3


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4 The Essential CIO

Another strategic goal is to radically simpliy IBM. So there is a continual

ocus on eliminating, simpliying, standardizing and automating work

that prohibits integration or adds complexity. By 2015, we plan to cut

in hal our number o enterprise applications. Other key objectives are

to dramatically improve cycle times and reduce transaction costs across

the company with leaner, more agile processes. And to manage it all,

we use dashboards to manage or business outcomes by providing

a real-time view o the status o the business, rom nance to inrastructure.

CIOs are lucky enough to have a unique end-to-end view o their

businesses, and are the driving orces behind much o what it takes or

companies to work smarter. They also look or ways to innovate in a

complex global environment that promises even more change ahead.

This latest study shares the collective experience and wisdom about how

best to do that.

Thank you to all who invited us into your oces. Your candid responses

and insightul conversations enabled us to articulate how todays CIOscan make essential dierences in any organizational setting through both

business and technical leadership.

Jeanette A. Horan

Vice President and Chie Inormation OcerIBM Corporation


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Contents

Executive summary 6

Introduction Who needs a CIO? 11

Chapter One Leverage 21

Chapter Two Expand 31

Chapter Three Transorm 41

Chapter Four Pioneer 53

The CIO AgendaExcelling in your mandate

63

How our research was conducted 66

For urther inormation 72

Table o contents 5


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6 The Essential CIO

Executive summary

How are technology leaders helping their organizations adapt to the

accelerating change and complexity that mark todays competitive and

economic landscape? To nd out, we spoke in person with 3,018 CIOs,

spanning 71 countries and 18 industries.

This CIO Study is part o our ongoing C-suite Study Series, encompassing

interviews with more than 13,000 C-suite executives over the past sixyears. Public and private sector CIOs described both the challenges and

opportunities rom increasing complexity. They shared how they are

innovating with technology or organizational success. These in-person

conversations, along with our statistical analyses o responses, under-

score the ever-more vital role o the CIO. Importantly, we ound that CIOs

thinking today is more like that o CEOs than when we spoke with CIOs

two years ago.

In our last CEO Study, leaders told us that creative leadership, newcustomer relationships and operating dexterity are the keys to twenty-rst

century success.1 Here, CIOs shed new light on how they ocus their

eorts and their teams on these and other critical business objectives.

CIOs increasingly help their public and private sector organizations cope

with complexity by simpliying operations, business processes, products

and services. To increase competitiveness, 83 percent o CIOs have

visionary plans that includebusiness intelligence and analytics, ollowed

by mobility solutions (74 percent) and virtualization (68 percent). Sinceour 2009 Global CIO Study, cloud computing shot up in priority, selected

by 45 percent more CIOs than beore and leaping into a tie or ourth

place withbusiness process management (60 percent each).2

To align business and IT priorities,

its dicult to choose which is more

important: business presence in

IT projects or IT presence in business

projects. The art is to create true

hybrid, co-led teams.

Sabine Everaet, CIO, Europe Group,The Coca-Cola Company


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Executive summary 7

Both cloud computing and outsourcing are critical tools or CIOs to

reallocate internal resources rom routine system maintenance toward

tasks that are most valuable to their organizations. Master data manage-

ment, customer analytics, data warehousing and visual inormation

dashboards are CIOs top priorities or turning data into insights that

lead to better and aster business decisions.

The CIO Mandate

While these priorities span the breadth o our global CIO sample, our

study uncovered discernable dierences among CIOs. Using state-o-

the-art statistical and textual analysis o responses, we saw patterns that

identied distinct approaches to IT leadership based on the specic

needs and objectives o an organization.

Though virtually all CIOs are responsible or delivery o essential services

managing digital inrastructure and enorcing security, data integrity and

system availabilityour research identied our distinct CIO Mandatesthat are basedprimarilyon how each organization views the role o IT.

Leverage

Streamlineoperationsand increaseorganizationaleectiveness

Expand

Rene businessprocesses andenhance collaboration

Pioneer

Radically innovateproducts, markets,business models

Transorm

Change theindustry value chainthrough improvedrelationships


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8 The Essential CIO

Leverage

These organizations view IT as a provider o undamental technology

services. Their CIOs are asked to leverage IT to streamline operations

or greater organizational eectiveness.

Expand

This widespread mandate includes organizations that expect CIOs

to manage a balanced set o responsibilities that range rom undamentalto visionary. Their CIOs lead IT operations that help expand organizational

capabilities by rening business processes and enhancing enterprise-

wide collaboration.

Transorm

Organizations with this mandate see IT primarily as providers o industry-

specic solutions to change the business. These CIOs are called upon

to help transorm the industry value chain by enhancing relationships

with customers, citizens, partners and internal clients.

Pioneer

Here, organizations view IT predominantly as a critical enabler o the

business/organizational vision. This group o CIOs is invited to help

pioneer or radically re-engineer products, markets and business models.


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Executive summary 9

The road ahead or CIOs

To be successul, CIOs must understand the needs and goals o their

organizations, agencies, divisions or business units, and deliver on

their unique mandates. Communicating eectively with colleagues in

the C-suite to reach explicit agreement on how IT can best support

business objectives is vital. So is disseminating that understanding so

that C-suite executives and other stakeholders acknowledge and

support ITs primary ocus.

Yet these mandates represent a snapshot in time. They can change

with shits in the economic, competitive or technological landscapes.

When the objectives o the organization change, so too may the CIO

Mandate. CIOs are uniquely positioned to help their organizations

cope with the volatility and complexity o the twenty-rst century

by generating valuable insight rom data and serving as catalysts

or innovation.


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10 The Essential CIO

The most value will come rombeing able to provide the rightdata to the right people in a secure

way, and to deliver eective andstable operations.

Birgitte Drewes, CIO, Lgemiddelstyrelsen,

Danish Medicines Agency


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Introduction 11

Who needs

a CIO?Major technological advances arereshaping business, government

and society. Technology hasbecome ubiquitous and data isexpanding exponentially. In turn,the role o the CIO is growing morecritical to organizations across

the globe.


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Managing the inescapable prolieration o data

We live in a world deeply inused with data. Vast quantities are being

generated and captured as the worlds economic and societal systems

become more instrumented and interconnected. And those same

systems are becoming ever-more connected and complex. All the

while, the pace o change is unabated.

There are now more than a billion transistors per human, and they are

not only ound in servers, PCs, smartphones, tablets and MP3 players,but also in appliances and automobiles, power grids, roadways, railways

and waterways. RFID tags and sensors are tracking products in supply

chains or everything rom pharmaceuticals to livestock. Global digital

content created will increase some 30 times over the next ten yearsto

35 zettabytes (thats a trillion gigabytes, or a 1 ollowed by 21 zeroes). 3

This data bountyand burdenimpacts every unction o enterprises

and institutions. But the heaviest responsibility and the most promising

opportunities o a new, hyper-inormation age all where you wouldexpecton the desk o the Chie Inormation Ocer. More than ever, CIOs

are essential to capitalizing on complexity and managing the impact o

external orces. As the generation, collection and analysis o data rises

in importance to organizations o all stripes, so does the role o the CIO.

Global integration brings

complexity to the tune o several

Rubiks cubes attached together

and this complexity needs to

be managed to achieve success.

Rupinder Goel, CIO, Airtel Arica


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Introduction 13

Figure 1

Seeing eye-to-eye with the CEO CIOs view

o the most signicant external orces impacting

their organizations now aligns more closely

to that o CEOs.

The shared executive agenda

As the ability to extract insights rom structured and unstructured data

increases in value, CIOs are moving closer to the locus o power in their

organizations. Thereore, it should not come as a surprise that there is a

stronger alignment in the thinking o CEOs and CIOs. When asked to rank

the impact o external orces on their organizations, the newest ranking by

CIOs more closely matched the list that CEOs identied in our 2010 study. 4

In 2010, CEOs ranked technological actors as the second most importantexternal orceater the perennial top answer,market actorsthat

will impact their organization over the next three to ve years. Those same

executives told us they operate in a world that is substantially more

volatile, uncertain and complex.

CIO

2009

CIO

2011

CEO

2010

6

5

4

3

2

1

6

5

4

3

2

1 Market actors

Technological actors

Macroeconomic actors

People skills

Regulatory concerns

Globalization


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CIOs now demonstrate a strong alignment with this line o thinking and

are highly ocused on insight, clients and people skills to manage that

complexity. Asked where they will ocus IT to help their organizations

strategy over the next three to ve years, the vast majority o CIOs

identiedinsight and intelligence, client intimacyandpeople skills as

their top three priorities, as did CEOs.

Figure 2

Priorities in sync CIOs and CEOs both aim to

ocus on insight and intelligence, client intimacy

and people skills over the oreseeable uture.

Expediting intelligence

Our research suggests that this new alignment comes as CEOs better

understand the importance o technology. They increasingly rely on CIOs

to turn data into usable inormation, inormation into intelligence and

intelligence into better decisions.

CEO ocus over

the next 5 years

4

8

5

3

2

1

6

3

4

5

1

2 Client intimacy

People skills

Insight and intelligence

Enterprise model changes

Risk management

Industry model changes

Revenue model changes

Internal collaboration and communications

6

7 7

8

CIO ocus over the

next 3 to 5 years


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Introduction 15

As a result, CIOs are assessing multiple means to make better use o

burgeoning data stores. Business intelligence and analytics is o utmost

importance as CIOs top visionary plan to increase competitiveness

over the next three to ve years. Although it was on the 2009 list, cloud

computing took a giant leap. Now it has come o age, rising more than any

other CIO priority. When asked how they will translate data into intelligence,

CIOs namedmaster data management, customer analytics, data ware-

housing and visual inormation dashboards. Each initiative was cited by

roughly two-thirds o our sample or more.

We will provide the appropriate

technology or the continuously

changing business environment

and more accurate inormation

to the business.

Zsolt Rasztovits, CIO, MKB Bank Zrt.

Figure 3

CIOs are recalibrating their toolsets While the top

three priorities remain the same, mobility and

cloud computing made the biggest leaps among

their visionary plans.

2009

2011

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57%

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83%83%

71%

58%


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Across our entire sample, CIOs voicedremarkable consensus on what

it takes to successully implement their IT strategy. CIOs identied the top

three success actors or IT initiatives as putting in place the correct IT/

business talent,managing beyond line responsibilities and creating the

right conditions beore starting .

Where the paths diverge

Perhaps the most useul insight to emerge rom this study, however, is not

what makes CIOs the same, but what makes them dierent. The primary

dierences among the CIOs we spoke with lie in their organizations

business needs and goals, and how CIOs can achieve those goals by

leveraging business and inormation technology.

CIOs everywhere spend at least a portion o their time on IT undamentals

like managing their organizations digital inrastructure (setting standards,

determining architectures, selecting vendors, and enorcing security, data

integrity and system availability). Beyond managing these prerequisites,

our research identied our distinct CIO Mandates, based on how each

organization views the role o IT: Leverage, Expand, Transorm and Pioneer.

These mandates were derived rom iterative cluster analysis, including

state-o-the-art statistical and textual analysis o the thousands o CIO

responses. It revealed typical response patterns associated with each

mandate. Each pattern indicated a distinct approach to IT leadership

derived rom specic organizational needs.

We will create value through the

ability to manage beyond line

responsibilities and building

constituency across the company.

Cezary Kosewski, CIO, Sklepy Komort S.A.


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Introduction 17

Figure 4

The CIO Mandate Eective CIOs know

and deliver on a mandate that is dened by

the predominant goals o the enterprise.

Leveragemandate

Streamlineoperationsand increaseorganizationaleectiveness

Expandmandate

Rene businessprocesses andenhance collaboration

Pioneermandate

Radically innovateproducts, markets,business models

Transormmandate

Change theindustry value chainthrough improvedrelationships


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O course, virtually all CIOs have some responsibilities in each o the

areas that dene the individual mandates. For example, even in the most

innovative organizations, CIOs are still expected to manage the essentials

o leveraging technology to boost eciency; and CIOs operating with a

Leverage mandate spend some o their time on initiatives that expand the

value chain and help re-engineer the enterprise.

Which mandate a CIO operates within is determined by the needs and

expectations o the business unit, agency or corporation.Individualorganizations have a variety o technology needs and objectives based

on an array o variables. These variables include industry segment,

geography, competitive positioning, size, maturity and others. The CIO

Mandate identied in our analysis establishes theprimaryocus o the

CIO, as well as the core competencies required o the IT organization.

That is why it is vitally impor tant that each CIO has a clear understanding

o his or her mandate. And, the entire organization must recognize it.

The success o the IT unction, and by extension the enterprise itsel, truly

depends on it.

These mandates represent a snapshot in time. Any mandate can change

due to shits in the economic and competitive landscape or other actors

that result in new organizational objectives. Our analysis shows that the our

mandates exist across industries and geographies. But every organization

has a dominant view o IT that empowers the CIO to achieve its goals.

Prots are thin and hence, using

technology or increasing eciency

in people and processes becomes

ever-more important.

Vimal Goel, Chie Manager,IT, HPCLMittal Energy Ltd


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Introduction 19

Each mandate delivers value

Interestingly, we observed little correlation between nancial perormance

and any particular CIO Mandate. CIOs can deliver real business value

with every type o mandate. However, within each mandate, we did see

some notable dierences between top-perorming organizations and

underperorming organizations.

We asked respondents to assess their organizations competitive position.

Those who selected substantially outperorm industry peers wereidentied as top perormers, while those who selected somewhat or

substantially underperorming industry peers were grouped as lower

perormers. In the chapters that ollow, we highlight those areas where

outperormers described substantially dierent plans compared to

underperormers.

These mandates are not a progression or continuum o responsibilities

or CIOs. With any mandate, savvy CIOs should be alert or opportunities

to drive business value.


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We have to enhance the horizontalcommunication and integrate

data to remove the barriers acrosssilos in my company.

Masahiko Kon, Director o F inance/IT/GA, Sumitomo 3M Limited

Our unction is moving rom IT

services provider to an essential

part o the main business.

Bulychev Stanislav Yurievich, CIO, Glavstroy


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21Chapter one

LeverageOrganizations that demand high-perormance IT need CIOs to ocus

on managing essential IT activitiesand getting inormation to decisionmakers aster and more accurately.

The business expects CIOs operating with theLeverage mandate to concentrate about hal

o their eorts on the undamentals o deliveringIT services. Such organizations emphasizestreamlining and simpliying technologyto enhance organizational eectiveness.

Business view o IT

52% Provider oundamentaltechnology services

28%Facilitator oorganizationalprocess eiciency

14%Provider o industry-speciic solutionsto support business

6%Critical enablero business/organization vision


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Engineering the well-oiled operation

Many industries across the globe are undergoing rapid, proound changes.

Yet a small-but-solid oundation o the economy consists o relatively

mature sectors. In these industries, ecient operations are more important

to growth than attaining the utmost agility. Aerospace and Deense,

Chemicals and Petroleum, and Industrial Products, or example, require

large capital investments. Compared to their counterparts in other

industries, such CIOs have less reedom to take on the risks associated

with adopting new technology.

Figure 5

Mature industries seek the essentials

Mature industries that may be more risk-

averse have the highest concentration

o Leverage mandate organizations.

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unicatio

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80%

70%

60%

50%

40%

30%

20%

10%

31%28%

23% 23%21% 21%

19%16% 16%

14% 12%9%

8% 7% 7% 7%5%

4%


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Leverage 23

And or the public sector, technological advances, most notably Internet

pervasiveness, have enabled e-government and vast improvements in

how governments deliver services. Yet those servicespublic health and

saety, construction and maintenance o critical inrastructure, social

programs and the likeare relatively stable in the short term. The biggest

challenge remains delivering more services to citizens at a lower cost.

Enhance organizational eiciency and eectiveness

Fourteen percent o CIOs we interviewed operate with a Leverage

mandate. CIOs with this mandate drive improvements in governance

and controls, procedures, internal collaboration and transparency

between IT and the business.

CIOs whose responses correlate with a Leverage mandate are continually

reviewing their legacy environment, with an eye toward cost control. To

keep costs in check, their top tools are aimed at rationalizing, renewing and

consolidating application portolios and hardware environments over the

next three to ten years.

Internal collaboration and client interaction are among the principal

goals o Leverage mandate CIOs. Nearly three out o our expect changes

to their internal collaboration processes to have high transormative

potential or their organizations. And almost as many view changes

in client interaction processes as high-impact initiatives. We need to

cope with change by re-engaging with our internal customers in a more

intimate way, said one Government CIO in Australia. The solution is

part structural and part cultural.

The ROI o many projects is

very dicult to quantiy. How do

you measure the ROI o a cloud

computing or SOA implementation

and the increasing fexibility they

provide the organization?

Kalman Tiboldi, CIO, TVHGroup Thermote & Vanhalst


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Learning rom the plans o top perormers

CIOs in top-perorming Leverage mandate organizations approach

several things quite dierently than their lower perorming peers. Nearly

two-thirds more o these CIOs identiedsharing more inormation

with clients as a key customer relationship initiative. To do this, CIOs

are providing tools that enhance internal communications, such

as real-time message exchange, company blogs and other types

o electronic and mobile collaboration.

Another success actor important to more CIOs rom outper orming

Leverage mandate companies was having the correct IT/business talent.

Combining the right technology with employees that have the right

skills is a goal o many. We need our IT sta to be more business-centric

to build trusted relationships with business units, one Education CIO

in Australia told us.

One o our main challenges is to nd

the technical resources required to

meet the demands o our customers.

Tito Otero, CIO, Ferreyros S.A.A.

Figure 6

Collaboration and communication are key These

IT leaders look to new technologies to improve

how they work with clients.

Low transormative potential

Average transormative potential

High transormative potential

Change internal collaboration processes

Change client interaction processes

8% 18% 74%

10% 21% 69%


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Leverage 25

30%Leverageunderperormers

42%Leverageoutperormers

29%Leverageunderperormers

49%Leverageoutperormers

Having the right IT andbusiness talent team

to carry out the project

Share more inormation

with internal clients

63%more

45%more

Figure 7

Outperormers share more Top

perormers prioritize sharing inormation

internally and tapping the right

people more than underperormers.


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Recommendations

Deliver on the Leverage mandate

Open new communication channels Make it a high priority

to improve communication and collaboration throughout the

organization, especially between the business and IT. Engage

internal customers more ully in key IT planning and decision

making processes.

Tap the right team Careully match the IT and business talents

o your team to the tasks at hand. Implement rotational programs

to expose IT personnel to the ull range o enterprise operations,

including customer-acing positions.

Standardize and consolidate Standardize the IT inrastructure

and related processes organization-wide. Evaluate andconsolidate IT to address gaps and overlaps in the existing

architecture. Improve IT governance. Implement basic

business process management.

Update and renew Think ahead to develop practical plans to

gradually renew legacy systems and hardware. Introduce and

test new technologies conservatively to align with organizational

needs and priorities, and control legacy costs.

Discover the dashboard Establish dashboards that leverage

data collected to measure key business and IT metrics, including:

ROI and revenue; customer satisaction levels and other

customer inormation; response time/time to market; system

availability/downtime; and employee satisaction.


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Leverage 27

AkzoNobel

Balancing IT eciency with commercial agility

AkzoNobel is the worlds largest paints and coatings company, and

a major producer o specialty chemicals, with a presence in over 80

countries.5 But its got even bigger plans. It wants to boost its revenues

rom 14.6 billion to 20 billion (US$20.4 billion to US$28 billion) in the

next ew years.6 The IT team has a key part to play in ullling that goal.

When Pieter Schoehuijs took over as CIO in 2009, he was tasked with

strengthening the management and governance o IT, and aligning

AkzoNobels IT with its business drivers. The question was how to

optimize the use o IT resources without compromising the fexibility

o the business units. The paints, specialty chemicals and coatings

business areas operate autonomously, which makes them very agile

but precludes a completely shared inrastructure.

The IT depar tment has ocused on consolidating where possible to

do so without restricting the business units. It created a shared telecom-

munications environment, data centers and business applications,

supported by an electronic data interchange hub, intranet platorm and

corporate procurement system. It is also establishing shared standards

and support desks, and integrating the back-oce unctions within the

business units.

The number o ERP systems AkzoNobel uses has already been cut

by over 30 percent. The paint businesses have shared management

inormation systems, making it much easier to compare costs and

revenues. And internal customer satisaction has soared. But the IT

department is not stopping there. It is, or example, implementing a tool

to get real-time nancial inormation via mobile devices, developing

a set o best purchasing practices and actively making suggestions to

the business units about how to use standard solutions and processes

to save time and money.

27

over

30%reduction in the numbero ERP systems

Case study


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The Essential CIO28

In our market,

regulatoryimpactis signicant, precluding various orms

o competition that are commonplace

in most industries. Innovative IT is cr itical

to achieve a competitive advantage

through excellent B2B customer service.

Brian Margolies, CIO,Allied Beverage Group

Case study Allied Beverage GroupBuilding a consolidated architecture

Allied Beverage Group is New Jerseys biggest wholesale distributor

o wines and spirits. Formed rom a three-way merger in the late

1990s, the group is now among the ten largest such distributors

in the United States.7

In a marketplace where superb customer service dierentiates,

Allied needed stronger technology with which to compete. As Allieds

predecessor rms each brought its own technologies, this served

to ragment and disintegrate IT systems and the organization.

So, when Brian Margolies was brought in as the organizations rst

CIO in 2009, he immediately launched a 90-day review to nd out what

worked and what didnt. This resulted in a three-year, ully aligned,

strategic IT plan. With Board support, hes realized nearly all his goals

on time and under budget in only two years.

He consolidated most IT resources and applications in a shared services

center, overhauled the network inrastructure and instilled much more

discipline in the IT unction, reducing system downtime rom up to one

hour per week to greater than 99 percent availability. A new sel-service

e-commerce portal is designed to transition the sales sta toward

consultative selling and increased revenue, and even won an award

or technical innovation.8

Whats next on the list? Margolies wants to enhance the e-commerce

engine with Web 2.0 capabilities and integrated content useul to supply

chain partners, move to electronic proo o delivery and use predictive

analysis to manage Allieds inventory.


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Expand

Pioneer

Transform

Leverage

Leverage 29

Excel at Leveraging

Are you essential?

In what ways will you enhance relationships and improve

communication throughout the organization?

What is your plan to get, keep and grow people with

the IT and business skills that your team needs most?

How many disparate architectures does your organization

currently have, and why?

Are you aggressive enough in rationalizing hardware

and the application portolio as part o controlling costs?

How do your dashboards measure the value o IT in terms

o business benets?



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More speed is necessary in simpliying

business processes or both outside business

partners and main internal processes.

Hiroyuki Yoshimoto, Executive Vice President and CIO,Calsonic Kansei Corporation

Data warehouse solutions andportals are becoming common-

place. We are building ourback-oce systems to be more

open and partner-ready.

John Glanville, IT Director, Ideal Stelrad Group

31Chapter two


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31Chapter two

ExpandCIOs ocused on cross-enterprisegrowth continuously tune business

processes and internal collaborationto gain tighter integration.

Like all CIOs, those working with an Expandmandate are responsible or the undamentalsa well-run digital inrastructure that oers datasecurity, integrity and system availability. Yet, they

must also continually rene operations to optimizeeciency and seek substantial competitiveadvantage with the help o IT. They are expected tocreate enterprise-wide eciencies by streamliningbusiness processes, improving collaboration acrossthe enterprise and enabling aster, more eective

decision making.

Business view o IT

27%Provider oundamentaltechnology services


27%Provider o industry-speciic solutionsto support business




34/76


Facilitating the optimal enterprise

CIOs associated with an Expand mandate are asked to help re-engineer

their organizations, making them aster, more fexible and better equipped

to turn data into insights. Hal the CIOs we spoke with oered responses

that correlate with an Expand mandate. They were more than double the

size o any other group identied in our analysis. Simply put, it is what

organizations today are asking or most oten rom their CIOs.

CIOs operating in this type o organization have the most balanced mix

o responsibilities, allocating their energy relatively evenly across the ull

spectrum rom undamental to visionary. The dominant view o IT in such

organizations is asa acilitator o organizational process efciency. Yet

CIOs associated with this mandate estimated they spend, on average,

only slightly less timeproviding undamental IT services andproviding

industry-specifc solutions. Their role asa critical enabler o the

organizations vision is less demanding, though ar rom insignicant.

Figure 8

The dominant CIO Mandate Expand

is the most common mandate within

all industry segments except Financial

Markets organizations, which employ

more Pioneer mandates.

Reduce the cost o business as usual

and redirect expenditure to high-

volume business improvement

activities.

Cheryle Jenkinson, CIO, Ipswich City Council, Australia

Ind

ustria

lPro

ducts

Travela

ndTr

ansp

ortat

ion

LifeS

cienc

esand

Pha

rmac

eutic

alsRe

tail

Ene

rgya

ndUtili

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Insur

ance

Con

sume

rPro

ducts

Bank

ing

Aerospa

cean

dDefe

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Educ

ation

Electr

onics

Health

care

(Pro

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Chemic

alsan

dPetr

oleum

Media

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nterta

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Autom

otive

Telec

omm

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Gove

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ent

Finan

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arke

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80%

70%

60%

50%

40%

30%

20%

10%

62%60%

58% 58%55% 53% 53% 52%

51% 51% 50%

46% 45% 45% 45% 44% 43%

29%

Expand 33


35/76

p

Partnering or proitability

Good things such as tighter integration o business and technology

are high priorities or CIOs associated with the Expand mandate.

Better integration allows CIOs to ocus IT resources on the most critical

needs o the business. CIOs are reeing sta and resources to meet

these critical objectives by updating legacy systems with an eye toward

modernization and outsourcing non-critical IT unctions. They are

deploying new interactive communication tools to spur collaboration

and transparency, enhance the visibility o supply chain data andimprove business process management.

Figure 9

Finding trusted partners is vital Many Expand

mandate CIOs look to partners as a resh source

o new skills and expertise.

Maintain the current mix

BothDeeply change the mix

Do everything in-house

Both

Partner extensivelyIn keeping with their interest in outsourcing, CIOs at organizations that

demonstrate an Expand mandate are orsaking the do-everything-in-

house approach that once characterized many IT shops and instead plan

topartner extensively. Nearly our times as many said they plan topartner

as those who will continue to usein-house-only resources . A similar

two-thirds majority said they will deeply change the mixo capabilities,knowledge and assets within their organizations, compared to ewer than

one in ve who will stick with thestatus quo .

The alignment o strategy, structure,

and process is critical and IT plays

a surprisingly large and important

role in that. When these three are in

perect clarity, the business model is

simplied and an enormous number

o good things will happen.

John McDermott, CIO, Xerox Corporation

Changing the mix o capabilities, knowledge and assets within the organization

Doing everything in-house versus partnering

14% 20% 66%

17% 18% 65%



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Simpliy, analyze and automate

Possibly the most critical requirement o organizations that demonstrate

the Expand mandate is to enable better decision making. They look to

IT to get the most timely, relevant and accurate inormation in the hands

o business leaders when they need it. Thats why process and product

simplication and analytics to drive better real-time decision making are

top priorities or Expand mandate CIOs. Advanced business process

management tools can be critical in identiying ineciencies and mapping

internal processes to customer needs.

Figure 10

Simpliy and conquer CIOs with an

Expand mandate streamline business

processes and enable better decisions

by leading in the use o analytics.

No involvement

Support

Lead

Make it possible to provide the

inormation to departments that

promotes business improvement,

and measure by the departments

business improvement target,

such as inventory reduction.

Masahiko Takenaka, General Manager,

Inormation Systems, Furukawa-Sky Aluminum Corp.

Simpliy internal key processes

Drive better real-time decisions

Take advantage o analy tics

2% 16% 82%

5%

5%

23%

25%

72%

71%

Expand 35


37/76

An overwhelming 98 percent o those CIOs said they would lead or

support eorts tosimpliy internal key processes. A ull 95 percent said

they would lead or support eorts to drive better real-time decisions

and take advantage o analytics. We ask What is the specic business

outcome to achieve? and What are the required processes and

capabilities? said an Electronics CIO in Australia. Then we simpliy

and automate.

Outperormers collaborate and integrate

For CIOs in top-perormingExpand mandate organizations, collaboration

and integration are especially important. More than two-thirds o those

CIOs said they would ocus more on internal collaboration and communi-

cation, compared to less than hal in underperorming organizations

with an Expand mandate. Advanced collaboration suites with an array

o unctionswikis, blogs, le repositories, event calendars, discussion

boards, image and video galleries, collaboration spaces and others

are critical enablers or these CIOs.

Their ocus on integration also separates the outperormers rom the

underperormers with an Expand mandate. More than twice the number

o CIOs at top-perorming organizations said they haveintegrated

business and technology or innovation to a large extent than did CIOs

at underperorming organizations. Internal collaboration is a must,

cultural issues have to be addressed, and knowledge has to be shared

and used, a Banking CIO in India said.

Make sure that as we get bigger,

we dont get more complex, but

scale eciently.

John Murray, CIO, EMTSEtisalat Nigeria



38/76

Figure 11

Outperormers team with business More CIOs

in outperorming Expand organizations cited

integration and collaboration with the businessas keys to innovation than did underperormers.

One important goal is continuous cultivation o the IT culture,a Banking CIO in Malaysia told us, and being a partner to the

business to create value or customers, the organization, employees

and business par tners.

49%Expandunderperormers

61%Expandoutperormers

29%Expandunderperormers

71%Expandoutperormers

Integration obusiness and technology

or innovation

Internal collaboration

and communication

45%more

110%more

Expand 37


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Recommendations

Deliver on the Expand mandate

Enable state-o-the-art collaboration Evaluate and adopt new

tools to strengthen enterprise-wide collaboration and real-time

exchange o data. Explore and introduce unied messaging,

mobile data solutions, anytime/anywhere models and desktop

virtualization.

Tighten business and technology integration Increase two-

way transparency by involving internal clients in IT planning

and decision making. Help IT sta ocus on winning external

customers and growing revenues, while encouraging business

leaders to target innovation.

Focus on the core Rely on trusted partners to handle non-strategic IT unctions. Evaluate the benets o outsourcing

and cloud computing. Reallocate internal resources to perorm

tasks that are most valuable to the organization.

Simpliy, automate and integrate Implement advanced business

process management. Align business processes with customer

requirements.

Advance the metrics Provide sophisticated dashboards through

more advanced types o analytics, including: ROI and revenue;

IT cost savings; advanced customer analytics; response time/

time to market; end-user satisaction; and dierentiating IT

perormance actors.



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Case study

KeepingIT costs to

9%o total operating

expenditure

YES BANK

Cashing in on clever outsourcing

YES BANK is one o Indias astest growing private sector banks. Founded

in 2004, it has become a ull-service commercial bank, with two national

operating centers and 185 branches in 149 cities in just seven years.9 The

decision to outsource non-core IT tasks and concentrate on its primarybanking business has uelled much o this expansion.

The management o YES BANK realized at its inception that i the bank

was to compete in a crowded sector, it would have to oer a distinctive

value proposition and that technology could provide the dierentiating

actor. But rather than try to do everything itsel, and incur huge capital

costs in the process, the bank chose to outsource many o its technology

requirements, Senior President and CIO Umesh Jain told us.

YES BANK retains control over all decisions about its IT strategy, gover-

nance and architecture, but relies on careully selected external providers

or commoditized assets and services like inrastructure management,

application development and maintenance. It classies these vendors

as strategic or tactical, depending on the type o products or services

they provide and their level o impact on the business. It monitors strategic

vendors intensively, with regular reviews o their perormance.

The bank also buys o-the-shel products and services wherever

possible, using a best-o-need rather than best-o breed purchasing

philosophy. And it partners extensively with other organizations to

co-create value, Jain explained.

YES BANKs smart approach to outsourcing has served it well. It

has succeeded in keeping its IT costs to 9 percent o total operating

expenditure, compared with the industry average o 15 to 22 percent.

Its fexible IT inrastructure remains capable o supporting uture growth.

Expand 39


41/76

Pioneer

Transform

Leverage

Excel at Expanding

Are you essential?

What leading-edge collaboration tools have you implemented

across the enterprise to help integrate technology with business?

How deeply are your internal customers involved in your key

planning and decision making processes?

What is your plan to engage partners to outsource inormation

technology unctions?

Which persistently inecient processes can you eliminate

or improve to increase customer satisaction?

How do you work with internal customers to ensure that dash-

boards measure enterprise-wide key perormance indicators?



42/76

Our ocus is on how to organizealliances and partnerships

to stay ahead o competition.

Jappe Blaauw, CIO, Air France-KLM

We want to know as much as possible

about the customer beore he or she calls

us, to simpliy our customer interactions.

Mike Benson, Executive Vice President and CIO, DIRECTV

41Chapter three


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TransormCIOs look beyond the boundarieso the enterprise to simpliy business

processes and generate real-timeinsights up and down the value chain.

Organizations that operate with a Transormmandate expect IT, more than anything else, to bea provider o industry-wide solutions to supportbusiness. On average, Transorm mandate CIOs

are expected to spend more than one-third otheir time or budget ullling that role. Somewhatless o their energy is devoted to either visionaryresponsibilities or business process improvements.CIOs with this mandate are typically seen to havethe essentials well in hand and spend much lesstime on such activities.

Business view o IT

14%

Provider o

undamentaltechnology services


34% Provider o industry-speciic solutionsto support business




44/76

Simpliying the borderless business

The ragile global economy and increasingly erce competition put

new pressure on the value chains o many organizations. Those that

must look beyond the our walls o the enterprise or an edge employ

what weve identied as a Transorm mandate. They call on their CIOs

to help them challenge thestatus quo.

Nearly one-quarter o the CIOs we spoke to support organizations that

operate with a Transorm mandate, which is most common in Financial

Servicesincluding Insurance, Banking and Financial Markets. TheTransorm mandate is also more concentrated than average in Telecom-

munications, Healthcare and Retail, relatively dynamic industries that

are eeling pressure to create new and stronger connections with

end customers and other key stakeholders in their value chains to

remain competitive.

Figure 12

A pervasive mandate Though not thedominant mandate in any one sector,

Transorm has a signicant presence across

a wide range o industries in our sample.

Telec

ommu

nicati

ons

Ener

gyan

dUtili

ties

Bank

ing

Cons

umer

Pro

duct

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Insur

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Chem

icals

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Autom

otive

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Gove

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Retai

l

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Media

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t

Educ

ation

Trave

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Tran

spor

tation

LifeS

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sand

Pha

rmac

eutic

als

Elect

ronic

s

Indus

trial

Prod

ucts

80%

70%

60%

50%

40%

30%

20%

10%

32% 32% 32%30% 29% 28%

23% 22%20% 19%

18% 17% 17% 17% 14% 14% 13% 13%

Transorm 43


45/76

Reaching outside the organization

Beyond the delivery o basic IT services and business process improve-

ments, Transorm mandate CIOs are helping their public and private

sector organizations undamentally rethink the way they understand

and interact with customers and partners alike. One key to extending

the enterprises reach is the use o Big Datathe vast volumes

captured, or example, rom instruments like sensors or RFID tags or

data gleaned in real-time rom millions o Web-based transactions.

And its not just the volume o data thats exploding, but the velocityas well. Analyzing todays staggering volumes is beyond that o most

traditional database management tools. To deal with them, real-time data

collection and advanced analytics are a primary ocus o organizations

that have a Transorm mandate. To have real-time data eedback or the

business improves visibility or better business management, said an

Electronics CIO based in Taiwan.

Capturing the insightsSo just how will CIOs unlock the insights their organizations are clamoring

or? Analytics and data management hold the key to extracting greater

value rom data. Over the next three to ve years, the majority o Transorm

mandate CIOs across our sample will ocus on customer analytics,

product/service proftability analysis andmaster data management .

This means moving beyond traditional relational database management

systems into the next generation o integrated data warehouses and

analytical tools. A Consumer Products CIO in Australia said, A masterdata management initiative will cleanse corporate data, acilitating

our ability to deliver rich customer analytics or the business.

We will be able to create value

because we already have the

content and the vision to make

it useable in multiple devices.

Our goal is to take that data , scrub

it, and make it ubiquitous to the

device.

Kevin Dabney, Executive Vice President and CIO,Wells FargoWholesale Division



46/76

Asked where they will ocus IT to help their organizations strategy in

three to ve years, the vast majority o CIOs we identied with a Transorm

mandate citedleveraging better data with strong analytics to create

insight and take actions. To create value, we will provide high-quality and

accurate inormation to support business decisions, noted a Consumer

Products CIO in Italy.

Figure 14

Enabling the intelligence enterprise Most

Transorm mandate CIOs will ocus on a range

o tools to drive better decision making over

the next ve years.

Figure 13

Gleaning greater insights Turning data

into inormation and inormation into business

intelligence is a top priority or Transorm

mandate CIOs.

Customeranalytics

70%

Product/serviceprotability analysis

68%

Master datamanagement

65%

Drive betterreal-time decisions

75%

Product/serviceutilization analysis

56%

Provide betterbusiness insights

73%

Leverage data tocreate insight

80%

Take advantageo analytics

69%

Transorm 45


47/76

Making things easier or clients and partners

According to the 2010 IBM CEO Study, better perormers manage

complexity on behal o their organizations, customers and par tners.10

Not surprisingly, organizations that operate with the Transorm mandate

place substantial emphasis on simplication o both internal processes

and interactions with citizens, clients and external par tners.

An overwhelming 99 percent o Transorm mandate CIOs identied

initiatives tosimpliy internal key processes as among those they

would lead or support, while 97 percent said they would lead or supporteorts tosimpliy or clients. More than hal also plan to lead initiatives

tosimpliy or external partners, while a substantial portion will support

such eorts.

Figure 15

Simpliy, simpliy, simpliy Most Transorm

mandate CIOs are leading eorts to simpliy

both internal and external processes or

clients and partners alike.

No involvement

Support

Lead

The challenges are increasingly

dicult when opening a store in a

new country. It requires us to adapt

our partnering model and technology,

and we must be extremely dynamic

to avoid blocking the evolution o

the business.

Eduardo Risso, CIO, MANGO

Simpliy or clients

Simpliy or external partners

Simpliy internal key processes

1% 15% 84%

4% 22% 75%

10% 39% 51%



48/76

Outperormers place a premium on helping the business act

Among CIOs whose responses correlated with this mandate, over

20 percent more o those rom outperorming organizations expect

to lead or support simplication initiatives.

To have real-time data eedbackor the business improves visibility

or better business management.

Kenny Tsai, CIO, Inventec Appliances Corp.

Figure 16

Top perormers ocus on partners

Nearly one-quarter more outperorming

Transorm mandate organizations ocuson simpliying or partners in the value chain

than do underperormers.

Enabling better decisions is a primary success actor or these CIOs.

One-third more Transorm mandate CIOs rom top-perorming organiza-

tions plan to support or lead initiatives to drive better decision making,

compared to signicantly ewer underperormers who cited this goal.

58%Transormoutperormers

47%Transormunderperormers

Simplifcation or

external partners

23%more

Transorm 47


49/76

Another success actor is the use o visual dashboards. Fewer thanhal o CIOs at underperorming organizations plan to implement visual

dashboards to support inormed decision making, compared to nearly

two-thirds o CIOs at top-perorming organizations.

A Healthcare CIO in the United States said, We constantly measure

against our starting objectives which are easily quantiable, such as ROI.

We then display these results to the entire organization to make sure we

are completely transparent.

Figure 17

Outperormers visualize success More

top-perorming Transorm mandate

CIOs are prioritizing dashboards to

oster better decision making than those

at underperorming organizations.

64%Transormoutperormers

47%Transormunderperormers

Use o visual dashboardsto support inormed

decision making

36%more



50/76

RecommendationsDeliver on the Transorm mandate

Simpliy, simpliy, simpliy Make your organization easier

to do business with. Remove unnecessary complexity.

Take on necessary complexity on behal o your customers.

Make it real Design dashboards that use real-time data collection.

Collect, analyze and act on data about value chain-wide business

and IT metrics, including: customer satisaction levels; value-chain

system speed; ROI and revenue; IT cost savings; end-user time

savings; and talent retention.

Extend the value chain Enhance and expand infuence through-

out the value chain. Increase transparency and collaboration

to improve communications among customers and partners.

Harness more real-time data Generate insights through eed-

back collection, sentiment analysis and connecting CRM to

social networks. Use the data explosion to grow relationships

with all key stakeholders.

Analyze! Dive deep into advanced analytics to develop insights

into customer behavior, value chain relationships and competitive

intelligence. Deploy text analysis to glean insights rom structuredand unstructured data, including blogs, customer service records

and Web transactions.

Transorm 49


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Case study

For the

rst time,utilities, government and businesses

will share inormation.

PeterboroughPutting sustainability on the map

Most people recognize that its crucial to make cities sustainable and

Peterborough, in eastern England, is leading the way. Opportunity

Peterborough, a not-or-prot-company established in 2005, has been

working closely with the city council to promote Peterboroughs regenerationand growth, and transorm it into the UKs Environment Capital.

As par t o this project, Opportunity Peterborough and Peterborough

City Council are joining orces with a collaboration o public and private

organizations to build a Web site that will monitor and analyze the citys

energy, water and transport usage, and recycling rates. Work is already

underway to put data on energy and water usage on the platorm, with

other environmental data set to ollow. The data will ultimately be amal-

gamated to produce a real-time map o Peterboroughs environmentalperormance.11

Residents will be able to log on to the site and get the inormation they

need to make smarter decisions about how they use resources, Trevor

Gibson, Director o Environment Capital or Opportunity Peterborough,

explained. Theyll also be able to get ideas or reducing their consumption,

and provide eedback and suggestions themselves.

Meanwhile, city ocials will be able to work more eectively with the

utility companies to plan the long-term energy and water inrastructurethats required or a sustainable uture. And, or the rst time ever,

utilities, government agencies and local businesses will be able to share

inormation, creating a comprehensive view o the citys ecosystem that

will let them make more ecologically minded decisions.



52/76

Case study

Following our latest

innovations,our customers saw that something big andunexpected was happening at the bank. They

became eager to see what we would do next.

Olayinka Oni, CIO, Wema Bank

Wema BankReaching customers in new ways

Wema Bank is Nigerias oldest indigenous bank, but when it was ully

privatized in mid-2009 it had acquired a reputation or being rather

old-ashioned. Foreign and domestic competitors had also eroded

its lead. So the new management team immediately embarked ona program to revitalize the bank, primarily by recapitalizing it, injecting

resh talent and strengthening the brand to appeal to younger customers

and budding entrepreneurs.12

Olayinka Onis mandate, as incoming CIO, was to create a robust and

responsive IT platorm to help acilitate the growth o the business. The

banks customers had already made it clear that they wanted alternative

delivery channels. So, one o his top priorities was to provide IT support

or the deployment o over 100 ATMs around the country. A secondpriority was the development o new services like mobile banking.

In June 2010, Wema Bank launched a cash on the go service that

lets accountholders with mobile phones transer unds to other account-

holders and non-customers alike, using the banks ATM network.

Oni also created a new Facebook page, redesigned the corporate

Web site and equipped the workorce with better productivity tools.

And theres plenty more in the pipeline, including a Web-based core

banking application that will enable easier and more accessible

banking transactions.

Wema Banks eorts have already paid dividends. The number o monthly

ATM transactions has quadrupled, the Facebook page attracted over

1,000 ollowers within three months and the Web sites industry rating

has risen. Employees can also manage and share data more eciently,

as well as spending more time cross-selling.

Transorm 51


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Expand

Pioneer

Leverage

Excel at TransormingAre you essential?

What are your plans to simpliy the customer experience,

products and services to increase unctionality, use and

satisaction?

Does your dashboard design include real-time metrics, such

as internal and external customer satisaction levels, end-user

time savings and talent retention?

Are you introducing social media and collaboration capabilities

to customers and partners, as well as internal clients?

How do you take advantage o Big Data and new IT capabilities

to achieve real-time insights?

In what new ways are you exploiting leading-edge analytical

skills and technology?



54/76

We have an increasing ocus on

technology or value: Everyone doesnt

need the latest and greatest shiny toy.

Jeffrey Barbeau, Senior VP, M&T Bank Corporation

Stability is essential as connectivityacross systems and regions means

that any ailure will have a much

bigger customer impact than it

would i they were not integrated.

Dave Gledhill, O&T Head, DBS Bank

53Chapter our


55/76

PioneerThese CIOs exhibit an entre-preneurial spirit and enable

the radical redesign o products,markets and business models.

With a Pioneer mandate, CIOs are seen as criticalenablers o the organizations vision and typicallyspend less than one-quarter o their time or budgeton delivering undamental IT services or business

process eciency. The dominant view o IT inPioneer mandate organizations is as a catalystor change, enabling everything rom new productsand new revenue streams to new markets andbusiness models.

Business view o IT

8%

Provider o

undamentaltechnology services


26%Provider o industry-

speciic solutionsto support business




56/76

Guiding the orward-thinking enterpriseFor a number o organizations, its no longer enough to maintain or even

improve operating eciency. They must reinvent themselves to keep

pace with relentless advances in technology or dramatic changes in

consumer behavior. The Media and Entertainment industry, or example,

has experienced seismic shits. Formidable new competitors have

sprung rom startups or entered the market rom other sectors, while

technology has changed social interaction and consumer consumption

patterns irreversibly.

Likewise, Telecommunications is undergoing hyper-evolution as the

relentless wireless revolution rolls on and the convergence o cable

television, telephone and Internet access alters the competitive landscape.

And Financial Markets organizations are acing new regulatory scrutiny

while continuing to consolidate through mergers and acquisitions.

Representing thirteen percent o our sample, its no surprise that

Pioneer mandate organizations are oten present within industries

experiencing the brunt o rapid changes. The industry with the most CIOswith this mandate is Financial Marketsa ull 35 percent o Financial

Markets CIOs that we talked to. And 21 percent o surveyed CIOs in both

Telecommunications, and Media and Entertainment work with a Pioneer

mandate.

When we improve or create

new processes, we get closer

to the customer and generate

new revenue sources.

Angelo Figaro, CIO, Renault do Brasil

Pioneer 55


57/76

Figure 18The mandate or the hyper-change era Though

it exists across all industries in small proportions,

the Pioneer mandate is most common in those

subject to upheaval and business model volatility.

Change products, markets and business models

This group o CIOs rankedproduct/service proftability analysis and

product/service utilization analysis as their top two priorities or turning

data into usable intelligence. And they citedadding new sources o

revenue as the highest impact o IT on their organizations over the nextthree to ve years. Nearly hal also citedrevenue model changes as

a key area o ocus or IT over the same period.

Finan

cialM

arke

ts

Auto

motiv

e

Telec

omm

unica

tions

Gove

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Media

andE

nterta

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Educ

ation

Travel

andT

rans

porta

tion

Cons

umer

Pro

ducts

Hea

lthca

re(P

rovid

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Energ

yand

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Bank

ing

Chem

icals

andP

etrole

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Insur

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Indus

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Electr

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andP

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80%

70%

60%

50%

40%

30%

20%

10%

21% 21% 20% 20%18%

15%13%

11% 10% 10% 9% 9% 9%7% 6%

5%3%

35%



58/76

CIOs are in a unique position within an organization. They help generateand have access to customer preerence data, supply chain patterns,

emerging trendsboth within their organizations and rom competitors

Internet behavior and response patterns, and so much more. Combining

this data with marketing analytics can reveal previously undiscovered and

unmet needs. It can lead to product innovations, massive process

changes, cross-industry value chain cooperation and other synergies

across industries.

Outperormers seek higher revenue and proits

For CIOs with this mandate, a ocus on developing a robust platorm or

data analysis seems to pay o. A signicant gap is evident between Pioneer

mandate CIOs in top-perorming and underperorming organizations

in how they prioritize protability analysis. And, compared to under-

perormers, nearly twice as many CIOs in outperorming Pioneer mandate

organizations as underperormers seek to add new sources o revenue.

Figure 19

Transormation through revenue and proft

Pioneer mandate CIOs pr ioritize initiatives that

drive new revenue and boost protability.

Low transormative potential

Average transormative potential

High transormative potential

We plan to increase revenueand protability by providing

the right platorm to measure

and analyze data.

Jean-Daniel Renevey, Head o Inormation Services,APAC, Roche Diagnostics Asia Pacic Pte Ltd

Product/service utilization analysis

Revenue model changes

Product/service protability analysis

24%

15%16%

16%

68%

60%

Adding new sources o revenue

22%

25%

21%

27%

57%

47%

Pioneer 57


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Figure 20Top perormers are revenue producers More

CIOs at outperorming Pioneer mandate

organizations emphasize protability analytics,

and nearly twice as many ocus on new

revenue sources than do underperormers.

Among the key analytic techniques that CIOs with Pioneer mandates areutilizing to assess and improve perormance is social network analysis.

A staggering 193 percent more o outperorming Pioneer mandate CIOs

prioritize social network analysis than do underperormers.

Figure 21

Customer intimacy is critical Nearly three

times as many CIOs in outperorming Pioneer

mandate organizations view social network

analysis as a top priority than their under-

perormer counterparts.

Every channel through which

we can reach and give service to

the end customer must be open.

Yavuz lken, CIO and COO, AXA Sigorta

54%Pioneerunderperormers

60%Pioneeroutperormers


69%Pioneeroutperormers Adding new

sources o revenue

Product/service

proftability analytics

28%more

94%more

44%Pioneer

outperormers


Social network

analysis

193%more



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RecommendationsDeliver on the Pioneer mandate

Innovate on the top line Discover new sources o revenue through

provocative invention. Execute visionary plans that can lead

to new products, services, business models or new markets.

Act on deep customer understanding Elevate the customer

experience to entirely new levels by using social network

analysis. Co-create and customize the customer experience

in unprecedented ways.

Exceed the expectations Innovate in the area o technology

convergence. Extend beyond the value chain, across industries

and markets. Take on undesired complexity or your customers.

Do what has not yet been requested.

Develop a culture o analytics Build predictive intelligence

capabilities that can undamentally change the business.

Encourage widespread application o analytics to ully leverage

business intelligence. Take an advanced look at what

drives protability.

Add dials to your dashboards Oer dynamic dashboards

using real-time data and use predictive analytics to providesituational metrics, including: ormal business case monitoring;

customer satisaction; employee motivation; and social value

and sustainability.

Pioneer 59


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Case study

over

4.3 millionsubscribers in 11 countries

MTNBringing mobile banking to Arica

MTN Group is one o the leading telecommunications providers

in Arica and the Middle East, with mobile licenses in 21 countries.13

But its the groups pioneering mobile wallet service thats recently

been winning praise.

MTN MobileMoney lets people transer cash and pay their utility

bills easily, economically and securely, using their mobile phones.

Thats a huge boon in Arica, where 80 percent o amilies dont have

bank accounts.14 MobileMoney is now available in 11 countries and has

attracted over 4.3 million subscribers since its launch in March 2009.15

MTN plans to roll out the service in the other countries it serves, but

theres plenty more in the pipeline. In March 2011, the company joined

orces with international insurance group Hollard Insurance to pilotmi-Lie, the worlds rst mobile lie insurance service, in Ghana.16 MTN

also intends to create a ull banking service or mobile phone users,

with an optional credit card.17

Were shiting our ocus away rom technology to services, Jyoti

Desai, MTN Groups Senior Vice President o Technology explained.

Were concentrating on providing low-cost solutions or rural communities

and our strategy is to enable sel-provisioning through mobile phones

with di erent interaces or diering literacy levels. Its a strategy thatsmade MTN Aricas top brand.18

60 The Essential CIO60


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Case study

over

15,000users rom more than

10,000 member companies

University o WarwickMaking connections the smart way

WMG (ormerly Warwick Manuacturing Group), led by Proessor Lord

Kumar Bhattacharyya, is an academic department at the University

o Warwick. Established in 1980, its dedicated to developing innovative

research and sharing that knowledge with the business community.19

But WMG isnt just an intellectual hothouse; on the contrary, its actively

enabling economic impact.

Dr. Jay Bal and his team have buil t an extended enterprise system

called the West Midlands Collaborative Commerce Marketplace that

matches buyers and suppliers, and osters collaborationprimarily

in the engineering industries. The competence proling system developed

or the marketplace captures what companies can do, not just what

they currently do. It has the goal o helping move these businesses

rom supplying components to systems, and into new market sectors.

So how does it work?

The system automatically collates data on new business opportunities,

including a wide range o tenders. It marries this inormation with a

database containing detailed proles o all the participating companies,

based on their core skills and competencies, and alerts the companies.

Members can use an intelligent partner ormation system to nd capable

and compatible partners to help tackle an opportunity, and collaborate

in secure online spaces.

Dr. Bals collaborative commerce market has proved a big hit. Over 50,000

tenders a year fow through the system, and it has over 15,000 users rom

more than 10,000 member companies. In all, it helps generate more than

4 billion (US$ 5.67 billion) worth o new business revenues per year or

its members.20

Pioneer 61


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Expand

Transform

Leverage

Excel at PioneeringAre you essential?

Which channels can you leverage to share ideas and co-create

new products and services that delight your customers?

How will you leverage social media and business intelligence

to spot trends that present new customer opportunities?

What are you doing to converge disparate technologies or the

benet o your organization, customers, value chain and beyond?

How can you develop the talent to apply predictive intelligence

to radically change your business model, products or industry?

How will you design dynamic dashboards that leverage real-time

data and predictive analytics?



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Importantly, the role o CIO is not being

looked on as Chie IT Mechanic. It is

recognized as a means to extract value

rom technology and gain insight rom

complex systems.

Mark Hale, Director o IS or Food Retail,The Co-operative Group

Ensure you understand the vision,have a clear strategy and executewhere the business wants to go.

Charlotte Jones, CIO, Reliance Petroleum

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Excellingin your

mandateDelivering on the CIO Mandateis the key to success, all whilekeeping an eye on the horizon

and ostering innovation.

CIO Mandates represent a single point in time.A mandate can change when an organizationsneeds and objectives change, perhaps inresponse to economic, competitive ortechnological orces. Mergers and acquisitions,or example, signal CIOs to quickly revisit theirmandates with senior leadership. Regardlesso mandate, our study shows that certain

essential actions can prove valuable to CIOs.



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Whats ahead or CIOsClearly, the most successul CIOs will be those who understand and

deliver on their mandates. To be e ective, CIOs must reach explicit

agreement with C-suite colleagues and other executives on the

organizations goals and how IT can best support and acilitate them.

And these agreements must be widely and clearly disseminated so

that all parts o the business understand and accept ITs primary ocus.

Yet whether an organization requires an emphasis on delivery o essential

IT services or challenges the CIO to pioneer new opportunities, CIOsneed to innovate. With ongoing technological shits, the seemingly endless

onslaught o data and the increasingly renetic pace o change, making

incremental improvements to operations may no longer be sucient.

Food or thought rom each mandate, or every mandate

Having earned their trusted spot in the C-suite, CIOs are poised to help

lead even more than beore. To be transormative in supporting their own

mandates, each can benet rom the nuggets o truth shared by others.

Leverage mandate CIO

I have no idea how many applications we have, thousands maybe,

but we have to clean up this mess.

Expand mandate CIO

Generally speaking, data is underutilized at our company. We really need

to ocus more on viewing data holistically versus a shotgun approach.

Transorm mandate CIO

Now everyone is interested in everyone else; we are going to exchange

a lot o inormation among organizations in the ecosystem.

Pioneer mandate CIO

We think we have something to gain rom social networks, but were not

mature enough yet to know what and how.

There is a strong emphasis

on internal customers:

Are we driving measurable

value or the organization?

Pablo Vegas,Vice President and CIO,American Electric Power

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Essential actions: Start hereOur CIO interviews also revealed some common threads that hold across

industries and countries. These commonalities underscored that no

matter the mandate, much can be learned rom each others experiences.

We encourage CIOs to use this list as a starting point or success:

Collaborate beyond what is currently imagined Get everyone talking,

via new channels, on new schedules and with new tools. Teach and

enable your entire enterprise to connect as oten and as eectively as

possible with their own most important stakeholders.

Live simplifcation as a daily goal Establish a culture o reusing to let

complexity be a burden. Be relentless in the pursuit o easier ways

to get work done. Solicit and act upon ideas to eliminate bureaucracy

and ineciencies, both internally and across the value chain.

Embrace the power o analytics Educate yoursel, your team and your

organization about extracting meaning rom unstructured data sources,

predictive intelligence, social network analysis and sentiment mining.

Help grow proftability and seek new revenue Know the most you

can about your customers and potential customers. Think like an

entrepreneur every day. Model and measure reactions to product,

service and business model changes.

Provide unparalleled IT expertise Learn exactly what your internal

customers need most, now and in the uture. Then, develop or acquire

the necessary skills. Become the ultimate expert at understanding

and integrating the newest technologies.

Continue the conversation at ibm.com/theessentialcio

We are looking or new and

innovative ideas that improve

productivity and anticipate

our customers needs, but we still

have to keep the trains running.

Kelly Carter, CIO, NASA HQ



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How our research was conductedThis report is the second biennial edition o our IBM Chie Inormation

Ocer (CIO) studythe latest in the ongoing C-suite Study Series

developed by the IBM Institute or Business Value. To better understand

the challenges and goals o todays CIOs, we met ace-to-ace with

3,018 o them. Between November 2010 and February 2011, we interviewed

this group, who represent dierent sizes o organizations in 71 countries

and 18 industries.21

In our previous CIO Study, our analysis was centered on CIO results

in terms o nancial perormance. We looked at prot beore tax (PBT)

growth to associate organizations with one o three growth levels:

High, Medium or Low. For this study, we looked at how respondents

assessed their organizations competitive position. This told us what

CIOs in higher perorming organizations aspire to do. Those who

selected substantially outperorm industry peers were identied as

top perormers, while those who selected somewhat or substantially

underperorming industry peers were grouped as lower perormers.

In addition to these nancial criteria, we also used iterative cluster

analysis, including state-o-the-art statistical and textual analysis

o CIO responses. It revealed typical response patterns to a series

o our questions. This led to the discovery o what we call the our

CIO Mandates.

Each mandate is associated with a distinct approach to IT leadership

that stems rom the specic needs and objectives o that particularorganization. To simpliy the terminology in this report, we reer to these

mandates based on the primary expectation a business has or its

IT unction:

LeverageThese organizations view IT as a provider o undamental

technology services. Their CIOs are asked to leverage IT to streamline

operations or greater organizational eectiveness.

How our research was conducted 67


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Figure 22

More than 3,000 CIOs worldwide

participated in this study Our diverse

sample was the largest group o C-suite

respondents that IBM has interviewed

ace-to-ace.

35%

Expand This widespread mandate includes organizations that expect

CIOs to manage a balanced set o responsibilities that range rom

undamental to visionary. Their CIOs lead IT operations that help expand

organizational capabilities by rening business processes and enhancing

enterprise-wide collaboration.

TransormOrganizations with this mandate see IT primarily as providers

o industry-specic solutions to change the business. These CIOs

are called upon to help transorm the industry value chain by enhancing

relationships with customers, citizens, partners and internal clients.

PioneerHere, organizations view IT predominantly as a critical enabler

o the business/organizational vision.

Documents

The Essential CIO 2011