The Future-State CIO:The Rise of the Business Strategist

Steve RovniakDirector, EMEA

About the CIO Executive Council

Mission Summary1.Members are trusted advisors to one another

2.Members work together on discrete projects aimed at promoting professional excellence, and at advancing the role of the CIO in business.

Mission Summary1.Members are trusted advisors to one another

2.Members work together on discrete projects aimed at promoting professional excellence, and at advancing the role of the CIO in business.

• Founding Date: 1 April 2004

• Current Worldwide Membership: 520+

• Founding Date: 1 April 2004

• Current Worldwide Membership: 520+

Bob Willett, Global CIOBob Willett, Global CIO

Marc West,Marc West,

Louis Ehrlich, CIOLouis Ehrlich, CIO

The “Blended” CIO:Part technology - part business

& VP of Business Strategy & Services

& CEO, Best Buy International

President, Commercial MarketsCIO

Three “Classifications” of CIOs

1. FUNCTION HEADS

2. TRANSFORMATIONAL LEADERS

3. BUSINESS STRATEGISTS

The “Function Head”

Focused on running the IT organization, achieving IT operational excellence and providing reliable, effective services

Predominate activities include: Developing IT talent Sourcing strategy and execution Improving IT operations Improving system performance Security management Budget management Managing IT crises

The “Transformational Leader”

Focused on creating change for their enterprise through process transformation and close partnerships with business operations

Predominate activities include: Redesigning cross-enterprise business processes

Leading change efforts in IT and across enterprise

Implementing new systems and architecture

Aligning IT initiatives and strategy with business goals/strategy

Cultivating the IT/business partnership

The “Business Strategist”

Focused on driving strategy for competitive advantage through activities that face across the enterprise and the external customer

Predominate activities include: Co-developing/refining business strategy with CXOs Studying market trends and external customer needs and

behaviors to identify new IT-enabled products/services Driving and enabling business innovations Identifying opportunities for IT-enabled competitive

differentiation Reengineering or developing new go-to-market strategies

and related technologies

CIOs represent a “blending” of the three classifications

The “typical” CIO

50%

40%

10%

37%

51%12%

“State of the CIO” 2008 survey distribution 758 IT heads across North America & Europe

41% (+4)

49% (-2)

9% (-2)

North AmericaEurope

CIO type distribution0

25 50 75100

CurrentDistribution of CIOs

FutureDistribution of CIOs

(Page B5)

"Half of my job is now product innovation and understanding market opportunities," says Mr. West, 47. In contrast, at his previous CIO job, 75% of his time was devoted to supporting tech systems, he says.

"Half of my job is now product innovation and understanding market opportunities," says Mr. West, 47. In contrast, at his previous CIO job, 75% of his time was devoted to supporting tech systems, he says.

The business community is paying attention

Critical indicators …

1. With whom do they spend the most time?

2. What are their top management and technology priorities?

3. Where do they want to have the greatest impact?

4. What skills do they need to develop?

How does the Business Strategist CIO differ from other CIOs?

Who are they hanging out with?

8%

20%

11%

18%

42%

10%

23%

11%

18%

39%

14%

27%

10%

17%

32%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

IT staff or team Non-IT employees IT vendors/ svcproviders

Your company'sexecs

Externalpartners/ customers

FUNCTION HEAD TRANSFORMATIONAL LEADER BUSINESS STRATEGIST

Top 10 management and technology priorities of the Business Strategist

1. Aligning IT and business goals

2. IT-enabled process improvement

3. Revenue-generating services & products

4. Improving internal user satisfaction

5. Business continuity/risk management

6. IT staff development

7. Controlling IT costs

8. Improving project management discipline

9. Data privacy

10. Measuring and communicating IT value

1. Create competitive advantage2. Enable business innovation3. Enable new revenue streams4. Improve customer (external) satisfaction5. Reduce business costs6. Grow existing revenue streams7. Improve security/risk management8. Enable global expansion9. Supply chain automation/visibility10.Enable regulatory compliance

Where do they want to have the greatest impact? Top 10

What skills are Business Strategists developing?In collaboration w/ Egon Zehnder International

2.5

3.0

3.5

4.0

4.5

5.0

5.5Results Orientation

Market Knowledge

Strategic Orientation

Collaboration & Influencing

People Development

Team Leadership

Change Leadership

Customer Focus

EgonZehnder

International

Eight core competencies for executive management

Scoring range of 1 - 7

Basic management competence

Increasing stretch - Building towards world class

competence

Transformational, visionary competence1

2

3

4

5

6

7

Middle Management Senior Executives World-Class Leaders

EgonZehnder

International

“Good” CIOs vs. “Good” CEOs (50-85th percentile)

2.5

3.0

3.5

4.0

4.5

5.0

5.5Results Orientation

Market Knowledge

Strategic Orientation

Collaboration & Influencing

People Development

Team Leadership

Change Leadership

Customer Focus

CEO CIO

EgonZehnder

International(n = 25,000 execs

across all functions)

“Good” CIOs vs. “Good” CFOs (50-85th percentile)

2.5

3.0

3.5

4.0

4.5

5.0

5.5Results Orientation

Market Knowledge

Strategic Orientation

Collaboration & Influencing

People Development

Team Leadership

Change Leadership

Customer Focus

CIO CFO

EgonZehnder

International(n = 25,000 execs

across all functions)

2.5

3.0

3.5

4.0

4.5

5.0

5.5Business Results Orientation

Market Knowledge

Strategic Orientation

Collaboration & Influenceing

People Development

Team Leadership

Change Leadership

Customer Focus

CEO CIO

Outstanding CEOs vs. CIOs(85th percentile)

EgonZehnder

International(n = 25,000 execs

across all functions)

Business strategist “to-do” list

1. Spend more time with executive peers and external customers and partners; spend less with IT staff and vendors.

2. Focus more effort on improving external-facing processes such as customer service, sales and marketing.

Business strategist “to-do" list, continued

3. Shift some of IT’s value proposition from cost- cutting to creating competitive advantage, revenue-generating services and products and new revenue streams.

4. Prioritize and cultivate the leadership competencies of: » External customer focus» Market knowledge » Maintain strength in strategic thinking and

collaboration

Business strategist to-do list, continued

5. Check your timing. Make sure your enterprise needs and would embrace a business strategist CIO.

» Is the company looking to grow, diversify, innovate and differentiate? Is it willing to invest and take risks?

» Has the CIO and IT organization earned the trust of its business partners through effective IT operations, project delivery and strategic alignment?

Thank you!

srovniak@cio.com