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The New CIO Leader:
Setting the Agenda &
Delivering Results
CIO Summit
15 April 2005
Singapore
Lachlan Stokes
Program Director
Executive Programs
Asia Pacific
New CIO Leaders Must Lead, Not Just Manage
Executive Leadership
Founded on building, maintaining credibility
 Personal vision, relationships, delivering outcomes
Demand Side
Lead with your business
colleagues, know what is
valued
 Create, communicate an
enterprise IT-enabled vision
 Shape and manage informed
expectations
 Use good governance to
weave business + IT strategy
together
Supply Side
Lead your IS team, deliver
cost-effective services
 Build a lean and focused
IS organization
 Develop and nurture your
team
 Communicate IT-enabled
performance in three ways
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 2
The Credible CIO Is the Basis of the New CIO
Leader
Initial
Credibility
Credibility
Resources
Results
Outcomes
Evidence
 Inclusion in business planning
 Good access to informal networks
Lost
Credibility
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 3
CIOs Must Earn Their Executive Leadership
Position Through Influence and Outcomes
Leaders foster adaptive change, not just technical change
 Altering habits, ways of thinking, leaving the familiar
Leadership is about visioning, communicating




The “vision thing,” relevant, well-articulated
Clear and compelling point of view
Simple and targeted communications: focused on recipient
Taking the time to communicate
Leadership is about building relationships
 Understand, work with the political context
 Know colleagues as people
 Empathy requires emotional intelligence
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 4
CIOs Must Synchronize Demand and
Supply Side Roles
Supply-side
Demand-side
Deliver cost effective services
Shape and manage
informed expectations
Suppliers
LEAD
Customers
Business,
Executive
IS Group
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 5
The Demand and Supply Sides
... Build On, Continually Reinforce Each Other
Demand Side
Understand your
environment
1
Lead
2
10
Create your vision 3
Shape, inform
4
expectations
Supply Side
The New
CIO Leader
8
Create clear IT 5
governance
Weave business 6
& IT strategy
Communicate
your
performance
Manage enterprise
9
& IT risks
7
Develop a highperforming team
Build a new IS
organization
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 6
The Demand and Supply Sides
... Build On, Continually Reinforce Each Other
Demand Side
Understand your
environment
1
Lead
2
10
Create your vision 3
Shape, inform
4
expectations
Supply Side
The New
CIO Leader
8
Create clear IT 5
governance
Weave business 6
& IT strategy
Communicate
your
performance
Manage enterprise
9
& IT risks
7
Develop a highperforming team
Build a new IS
organization
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 7
Know What Is Valued ... Know Your Enterprise,
Your Colleagues
Business
Ecosystem
Core
Business
Stage 3
Business
Partners
Joint
Ventures
Stage 2
Stage 1
Suppliers
of My
Suppliers
Direct
Suppliers
Core
Contributors
Distribution
Channels
Customers
of My
Customers
Direct
Customers
Extended
Enterprise
Source: Adapted from J.F. Moore, The
death of competition: Leadership and
strategy in the age of business ecosystems,
HarperCollins, 1997
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 8
Create and Communicate an Information and
IT-Enabled Vision for Your Enterprise
 Articulate the impact of the Network Era’s three laws interacting
Network value rises
with
more users
Chip power
doubles every 18
months
Metcalfe’s
Law
Moore’s
Law
Gilder’s
Law
Communications
bandwidth doubles
every six months
Understand the compounding effect on products, processes, services
Know the impact of the real-time enterprise (RTE)
 Example: SKF’s shift from manufacturing to services
Use a systematic approach, focus on tech options that address …
 Fundamental strategic goals + persistent business needs
 Example: Disney’s “Magical Gatherings,” “Grand Gatherings”
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 9
Shape and Manage Expectations by Linking
Business and IT Maxims
Sample Business Maxims
Provide all the information to service the
client from any service point
Sample IT Maxims
Customer service representatives must have
access to a complete file of each customer’s
relationship with the company
Reduce costs and drive economies of
scale through shared best practice
We enforce standards of hardware and
software selection to reduce costs and
streamline resource requirements
We centrally coordinate purchasing of IT from
major vendors to minimize costs and ensure
consistency
Ability to detect and respond to subtle
shifts in the marketplace
Centrally coordinated information flow should
allow all parts of the company to more easily and
quickly spot trends and use these to the
company’s advantage
Management culture of information
sharing to generate new business
The usefulness of data must be recognized
beyond the area immediately responsible for its
capture so it is not lost
New systems must provide a foundation on which
new products and services can be added without
major modifications
Ability to develop resources for new
products quickly
Source: Broadbent, M. and Weill,P. Management by Maxim: How Business and IT Managers
can Create IT Infrastructures, Sloan Management Review, Spring 1997
Entire contents © 2004 Gartner, Inc. All rights reserved.
| Page 10
Good IT Governance Lays the Foundations for
Relevant and Successful IT Strategy
Simplify, clarify and get buy-in for
demand-side IT governance
1. What decisions need to be made?
... decisions about major IT domains
... IT maxims, investment priorities, infra./arch./apps.
2. Who has decision and input rights?
... rights exercised in different governance styles
... key people need to be involved
3. How are the decisions formed and enacted?
... multiple mechanisms make governance work
... mechanisms should reflect business governance
Source: Adapted from Weill & Woodham's work originally published and copyrighted by the MIT Sloan CISR as
Working Paper No. 326, Don't Just Lead, Govern: Implementing Effective IT Governance, April 2002, and is used
by Gartner with permission. For further work, see the Gartner EXP reports by M. Broadbent and P. Weill,
Effective IT Governance By Design (January 2003) and Tailor IT Governance to Your Enterprise (October 2003)
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 11
Duopoly Input Reflects Business Governance
... Government Enforcement Agency
IT Governance Arrangements Matrix
Domain
Style
IT Principles
Input
Decision
IT Infrastructure
Strategies
Input
Business
Monarchy
IT
Monarchy
Decision
Business
Application needs
IT Architecture
Input
Decision
Input
IT Investment
and Prioritization
Decision
Input
IMSG
Dir of info
Dir of info
IM ldrship
IM ldrship
Arch comm
Decision
IMSG
Dir of info
Dir of info
IM ldrship
Feudal
IMSG
Dir of info
Mgt board
Federal
Duopoly
Mgt board
Biz pro own
IM ldrship
Dir of info
IM ldrship
Biz liaison
IM ldrship
Biz liaison
Biz pro own
IMSG
E-wide budget
IT portfolio
Input rights
Governance Mechanisms
Decision rights
IMSG
Information management steering group
Biz liaison
Business liaison officers
Dir of info
Director of information
Biz pro own
Business program/project owners
IM ldrship
Information management leadership group
Arch comm
Architecture committee
IT portfolio
Formal IT portfolio approach
E-wide budget
Enterprise-wide IT budget management
© 2002 Gartner, Inc. and MIT Sloan Center for Information Systems Research (Weill)
drawing on the framework of Weill and Woodham, 2002.
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 12
Integrate Business Strategy and IT Options
and Opportunities Into IT Strategy
From business value,
maxims
Business
Strategy
Maxims
Governance
From technology value,
opportunities
Visioning
and
Prototyping
Emerging
Technologies
“Demand Side”
“Supply Side”
Value:
What are the business problems
and opportunities we want to
solve and create with existing
and emerging technologies?
Innovation:
How can we use technologies
in new ways to create different
types of value?
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 13
The context of the IT delivery strategy defines the
parameters of the IT portfolio.
Informational
Expenditure
Strategic
Transactional
Investment
Infrastructure
Source: P. Weill & M. Broadbent Leveraging the New Infrastructure: How Market
Leaders Capitalize on IT, Harvard Business School Press, June 1998
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 14
The Demand and Supply Sides
... Build On, Continually Reinforce Each Other
Demand Side
Understand your
environment
1
Lead
2
10
Create your vision 3
Shape, inform
4
expectations
Supply Side
The New
CIO Leader
8
Create clear IT 5
governance
Weave business 6
& IT strategy
Communicate
your
performance
Manage enterprise
9
& IT risks
7
Develop a highperforming team
Build a new IS
organization
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 15
Build a Lean and Focused IS Lite Organization
Three key features
1. Process-Based Work
2. Strategic Sourcing
3. Sound Financial Management
Five key roles
1. IT Leadership
2. Architectural Development
3. Business Enhancement
4. Technology Advancement
5. Supplier Management
Demand
Side
Embedded
in business
units
Driving
innovation
IS Lite
Supply
Side
Delivering
change
BUs
Supporting
infrastructure
ESPs
Outsourced
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 16
Business
Solutions
Commercial
Business
Solutions
Technical
Business
Information
Management
Plan
Build
Run
Strategy and
Architecture
Systems
Development
Services &
Infrastructure
Business Value
Business Needs
Anglo Platinum — A Leader: Interlocking
Business and IT Processes
Business Streams
IT Functions
Source: Anglo Platinum
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 17
Develop and Nurture Your IS Team
Understand IS Competencies
Diversify Leadership Styles
Think Personality Types
Try Leadership Structures
Use Training & Recruitment
Remember Emotional Intelligence
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 18
CIOs must approach risk management with an
integrated mindset and approach
Enterprise IT Risk Framework
Enterprise Goals
Continuity
 Availability
 Business
continuity
 Disaster
recovery
Technology &
Infrastructure
Applications &
Information
 Configuration
management
 Degree of
standardization
 Age of
technology
 Architecture
complexity
 Redundancy
 Data
consistency
 Degree of
customization
Confidentiality
Accuracy
Flexibility
 Information
protection
 Knowledge sharing
 Preventing
malicious attacks
 Data accuracy,
timeliness, and
consistency
 Regulatory
compliance
IT Risk Factors
Vendors &
People & Skills
Other Partners
 Turnover
 Skills planning
 Recruiting/
training
 IT/Business
relationship
 SLAs
 Use of firm’s
methods/
standards
 Sole source
 Customer risk
tolerance
 Ability to
implement major
strategic change
Policy &
Process
 Controls
architecture
 Degree of
standardization
 Degree of
accountability
Organizational
 Cost cutting
 Organizational
complexity
External Threats
© 2004 MIT Sloan Center for Information Systems
Research (CISR). This material is adapted from
Westerman’s “Managing the Enterprise’s IT Risk Profile. “
 New regulation
 Virus
 Geopolitical
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 19
Focusing on one risk factor hides
the extent of risk
Situation: Old, heavily maintained applications
Continuity
Confidentiality
Accuracy
Flexibility
Employee turnover
Patch/configuration
management
Complexity of
applic’n logic/function
Complexity of security
management
X
Manual controls
required
X
X
Data standards
X
X
Internal controls
X
© 2004 MIT Sloan Center for Information Systems Research (CISR). This material is adapted from Westerman’s
“Managing the Enterprise’s IT Risk Profile. “
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 20
Know Where You Stand, and Communicate It
... in the Right Way, to the Right Stakeholder
Segment your Communications — From the Macro to the Dashboard
1.
Articulate top-level shareholder value for IT
 for your enterprise board, shareholders/external stakeholders
2.
Identify and report on IT value indicators
 linked to business value measures
 for your business colleagues
3.
Create effective IT performance
 dashboards/scorecards
 use business-relevant language
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 21
2. Identify IT Value Indicators Linked to
Business Value Measures
Measure of Value
Specific Impact Sought
Sample Metric
Business Value
Profitable sales
growth
 10% top-line growth
and maintain last
year’s profitability
Business Value
Initiative/Programs
 Increase revenue per
sales employee
 Free up time of sales
employees for more
actual selling
 10% this year and
20% next year
 Number of sales
calls per week
IT Value-Added
Through easy-to-use
templates and tools,
reduce amount of
time sales
employees spend
preparing sales
reports
 % of IT application
completed
 % of sales
employees using
application
 Time saved per
sales employee
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 22
3. Dashboards Provide a Business Context
for IS Activities
Corporate
Scorecard
Measures
Objectives
Business Unit
Scorecard
Business Unit
CIO
Scorecard
 EPS
 Group Cash Flow
 Customer Satisfaction
Index
 Free Cash Flow
 Operating Profit
 Safety Performance
 Line Manager Index
 Capital Budget — Volume
 Capital Budget
(Nonvolume)
 Customer Satisfaction
Index
 Quality-of-Service Index
 Lost Time Incidents
 Line Manager Index
 Deliver IS-Catalyzed
Transformation
 Availability of Systems
 Customer Satisfaction
 Lost Time Incidents in IS
 Line Manager Index
Corporate Objectives
Business Unit Objectives
Business Unit CIO
Objectives
….
….
….
Adapted from Phil Dance, CTO, BT
Wholesale. Content illustrative.
….
….
….
 Transformation Program
Delivery
 Data Integrity
 IT Cost Savings
 People Development
 Quality Conformance
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 23
Scorecards make individuals’ performance
transparent
John Doe
5.4
Productivity
6.5
Productivity
Performance Metrics
•Completed late projects
•Average cost per FTE
•Ave cost per function point
•Cost variance
•Forecast accuracy
Action Items
•Projects due within 7 days
•Data quality
•Resource reviews due
Value Target Rank
4.1
3.9
3/7
2.9
2.6
2/7
3.8
3.7
4/7
10.0
9.0
5/7
15.0 10.0 5/7
Quality
4.2
Performance Metrics
•Users Project Rating
•IS Project Rating
•Critical Outages
Action Items
•Quality surveys due
•Quality exceptions
Value Target
5
75% 80%
3
Controls
Value Target Rank
4.1
3.8
3/7
2.5
2.8
6/7
3.1
3.3
4/7
12
6
5.5
Performance Metrics
•Satisfactory audits
•Budget variance
•Information security
Action Items
•Audits due
•Project certification
Value Target Rank
5.6
5.2
2/7
5.5
5.6
3/7
5.3
5.2
2/7
7
3
Adapted from Tom Sanzone, group CIO, Citigroup Global Corporate and Investment Bank. Content illustrative
Entire contents © 2004 Gartner, Inc. All rights reserved. | Page 24
The New CIO Leader:
Setting the Agenda &
Delivering Results
CIO Summit
15 April 2005
Singapore
Lachlan Stokes
Program Director
Executive Programs
Asia Pacific