© 2011 IBM Corporation 1 IBM Institute for Business Value Insights from the Global Chief...

© 2011 IBM Corporation1

IBM Institute for Business Value

Insights from theGlobal Chief Information Officer Study

New ZealandCIO Study 2011 Comparative Deck


Our ongoing CIO research focuses on activities deployed by the CIO as part of their ongoing efforts to grow authority and impact

WHAT are CIOs doing?2009 CIO Study: The new voice of the CIO

WHY are CIOs doing this?2010: Connecting across the C-suite

HOW are CIOs doing it?2011 CIO Study: The Essential CIO



Results were compiled from more than 3,000 face-to-face CIO interviews


Note: Growth Markets include Latin America, Asia Pacific (excluding Japan), Middle East and Africa

The study represents a diverse group of organisationsin 72 countries and 33 industries in 5 sectors

Geography Sector organisation Size

North America(16%)

Japan(6%)

Growth Markets(43%)

Europe(35%)

Public(15%)

Communications(12%)

Industrial(25%)

Financial Services(22%)

Distribution(26%)

Over 10,000employees

(33%)

Between 1,000 and10,000 employees

(39%)

Less than 1,000employees

(28%)


Strong public sector and Distribution representation in NZ results


Sector organisation Size

New Zealand comparative deck represents a group of organisations in 5 sectors

Industrial (18%)

Public (35%)

Communications (6%)

Distribution(29%)

Financial Services(12%)

Over 10,000 employees

(6%)

Between 1,000 and 10,000 employees

(50%)

Less than 1,000 employees

(44%)

Source: 2011 CIO Study; New Zealand, n=54


As the world becomes more instrumented, interconnected and intelligent, the CIO role holds even more importance


58%

68%

Business needs and expectations drive the CIO’s mandate to use technology

Source: 2011 CIO Study, Questions D.C: “To what extent has your organization integrated business and technology to innovate?”; D.E: “What score would the entire senior management team give technology for its contribution to the business?” (n=3,018)

CIOs report their organizations have largely integrated business and technology to innovateCIOs have a seat at the executive table to help infuse technology into products, services and processes

Senior management would rank technology as totally critical to the success of the business A clear mandate empowers CIOs to help the business get the most out of technology

“We will provide the appropriate technology for the continuously changing business environment and more accurate information to the business.“

Zsolt Rasztovits, CIO MKB Bank Zrt.


Agenda

CIOs align strongly with the CEO

Distinct CIO mandates help to grow “Authority and Impact”

The Essential CIO



Two years have significantly changed CIO assessments of external forces with responses that are similar to the 2010 CEO perspective

Source: Quarter 4 2010 responses derived from Question 1 were weighted due to a ranked response in the 2011 CIO Study questionnaire; Q1: “What are the three most important external forces that will impact your organisation over the next 3 to 5 years?” (n=3,018)

“New technologies are about to disrupt the industry.”

Industrial Products CIO, Germany

Market factors


1

2010 CEO

Technological factors2

Macroeconomic factors3

People skills4

Regulatory concerns5

Globalisation6

2009 CIO 2011 CIO

1

2

3

4

5

6

2011 NZ

1

2

3

4

6

8*

* Budgets (Public Only) was ranked #5 in New Zealand


The trend is also reflected in New Zealand

Expectation of complexity and change in the coming 3 to 5 years

Source: CEO study 2010, based on face-to-face conversations with 1500 CEOs / CIO study 2011, based on face-to-face conversations with over 3,000 CIOs, New Zealand ,n=54

2010 CEO Study 2011 CIO Study – New Zealand

ComplexityLess More

ComplexityLess More

Ch

ang

eLe

ssM

ore

Ch

ang

eLe

ssM

ore


13%

8% 24%

55% 19%

7% 20%

54%


CEO focus over the next 5 years

Source: 2010 CEO Study Q13: “Which of the following dimensions will you focus on more to realise your strategy in the new economic environment over the next 5 years? ”,n=1,523; 2011 CIO Study, Q13: “Where will you focus IT to help your organisation’s strategy over the next 3 to 5 years?”; Global sample, n=3,018; New Zealand, n=54

CIO focus over the next 5 years


CEOs and CIOs are both highly focused on insights, clients and people skills

Getting closer to customer

People skills

Insight and intelligence

Enterprise model changes

Risk management

Industry model changes

Revenue model changes

Insight and intelligence

Client intimacy

People skills

Internal collaboration & Communications

Risk management

Enterprise model changes

Industry model changes


88%

81%

76%

79%

71%

66%

57%

55%

54%

54%

64%

50%

48%

39%

35%

83%

63%

56%

50%

31%

50%

41%

26%

Global sample New Zealand


Business intelligence and analytics play a key role in NZ CIOs’ visionary plans

Source: 2011 CIO Study, Q12: “Which visionary plans do you have to increase competitiveness over the next 3 to 5 years?”; Global sample, n=3,018; New Zealand, n=54

Most Important Visionary Plan Elements(Interviewed CIOs could select as many as they wanted)


Business Intelligence and analytics

Virtualisation

Business process management

Self-service portals

Risk management and compliance

Cloud computing

Mobility solutions

Collaboration and Social Networking

83%

74%

68%

60%

60%

58%

57%

55%

98%

80%

70%

83%

70%

61%

78%

61%



Agenda



The Essential CIO



CIO response patterns associated with business expectations of IT fall into four categories we define as “The CIO Mandate”

The CIO Mandate

Empowerment of the CIO to achieve the organization’s goals by leveraging business and information technology

Agreement between business and IT Explicit, open and broadly communicated Applicable across industries and sectors Changes when the organization’s needs change


"Importantly, the role of CIO is not being looked on as 'Chief IT Mechanic.' It is recognized as a means to extract value from technology and gain insight from complex systems.“

Mark Hale, Director of IS for Food Retail, The Co-operative Group

Note: Outperformers and underperformers in each mandate were identified by answers to questions about their organization’s competitive position. Those who selected “substantially outperform industry peers” were identified as top performers, those who selected “somewhat or substantially underperforming industry peers” were grouped as lower performers.

© 2011 IBM Corporation

CIO Mandates come with distinct characteristics that line up with the organisations’ goals and strategy

Leverage Mandate

Streamline operations and increase organisational

effectiveness

Pioneer Mandate

Radically innovate products, markets, business models

Expand Mandate

Refine business processes and enhance collaboration

Transform Mandate

Change theindustry value chain

through improved relationships


13

Mandates are defined by strategic needs of the

business

Successful CIOs understand the business’

strategic needs and deliver on the related mandate,

using the best mix of activities

Mandates can change – when the business needs

change


Leverage mandate: optimise and grow IT fundamentals and enhance organisational process efficiency

14


Business view of IT

Provider of fundamental technology services

Facilitator of organisational process efficiency

Provider of industry specific solutions to support business

Critical enabler of business/organisation vision

Global (14%)

52%

28%

14%

6%

Enhance organisational efficiency and effectiveness

1. Continually review and update legacy environment

2. Renewed emphasis on information sharing and collaboration with internal customers

3. Leverage data to measure basic business and IT metrics

Key focus areas based onLeverage mandate CIO responses

New Zealand (28%)

57%

24%

13%

6%

Leverage

Source: 2011 CIO Study, Demographic Question D: “How does your business look at the role of IT?”; Global Leverage sample, n=417 and full analysis of all responses by Leverage mandate CIOs ; New Zealand total, n=54; New Zealand Leverage, n=15

“We anticipate information technology to impact our industry and company significantly.”

Electronics VP and CIO, United States


22%

5%

19%

18%

10%

9%

New Zealand

15

Leverage mandate CIOs continually review their legacy environment - NZ Leverage CIOs favour bold action

Source: 2011 CIO Study, Q16: “How do you plan to control and/or reduce the costs of your Legacy environment in the next 3 to 5 years?”; Global Leverage sample, n=417; New Zealand Leverage, n=15; percentages represent average percentage; Figures may not total to 100% as “Other” priorities have not been included


“Remove Legacy - it is taking more and more time to support, tying up resources needed to support new clients on new technologies.”

Travel & Transportation CIO, United States

How CIOs plan to control / reduce legacy cost (allocation of 100 points across 7 activities)

Gradually alter hardware (5 to 10 years)

Utilise cloud services

Rationalise application portfolio

Radically and totally renew IT environment

Use outsource partner

Use SOA to modernise / replace legacy

Wrap / isolate legacy environment

23%

18%

15%

13%

12%

8%

7%

Global sample

10%

“Legacy rationalisation, simplification and product agility is the way that we will capitalise on the increasing complexity and change management.”

Insurance CIO, NZ


Delivering on the Leverage mandate

16


Open new communication channels: Make it a high priority to improve communication and collaboration throughout the organisation.

Tap the right team: Carefully match the IT and business talents to the tasks at hand.

Standardise and consolidate: Standardise the IT infrastructure and related processes organisation-wide.

Update and renew: Think ahead to develop practical plans to gradually renew legacy systems and hardware.

Discover the dashboard: Establish dashboards that measure key business and IT metrics.

In what ways will you enhance relationships and improve communication throughout the organisation?

What is your plan to get, keep and grow people with the IT and business skills your organisation needs the most?

How many disparate architectures does your organisation currently have, and why?

Are you aggressive enough in rationalising hardware and the application portfolio as part of controlling costs?

How do your dashboards measure IT in terms of business benefits?

How to excel Are you “Essential”?


Expand mandate: strong focus on enterprise-wide optimisation of technology for highest possible integration and effectiveness


“Bring IT from a cost center to a business enabler.”Industrial Products CIO, Switzerland

Business view of IT





Global (50%)

27%

32%

27%

15%

Improve competitive differentiation

1. Explore and identify outsourcing opportunities for non-critical IT functions

2. Enhance internal communication and collaboration

3. Review, analyse and implement business process management

4. Continually review and update legacy environment

Key focus areas based onExpand mandate CIO responses

New Zealand

(48%)

31%

25%

26%

18%

Expand

17

Source: 2011 CIO Study, Demographic Question D: “How does your business look at the role of IT?”; Global Expand sample, n=1,508 and full analysis of all responses by Expand mandate CIOs; New Zealand Total, n=54; New Zealand Expand, n=26


Expand mandate CIOs are focusing on the benefits from global integration in key areas

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

Partnering versus doing everything in-house


Source: 2011 CIO Study, Q7: “To benefit from global integration will your organization do the following?”; Global Expand sample, n≤1,214; New Zealand Expand, n≤15

“Strategic partnering with some of the more commoditised parts of the business so we can focus on the differentiators.”

Travel & Transportation CIO, NZ

Maintain thecurrent mix

66%20%14% Deeply changethe mix

Both Global sample

New Zealand53%27%20%

“Our focus is on best of breed partners and strategic alliances rather than outsourcing.”

Government CIO, UK

Do everythingin-house

65%18%17% Partnerextensively

Both

53%27%20%

Global sample

New Zealand


Delivering on the Expand mandate

19


Enable state-of-the-art collaboration: Evaluate and adopt tools to strengthen enterprise-wide collaboration and exchange of data.

Tighten business and technology integration: Increase two-way transparency by involving internal clients in planning and decision-making .

Focus on the core: Rely on trusted partners to handle non-strategic IT functions.

Simplify, automate, integrate: Implement advanced business process management.

Advance the metrics: Provide sophisticated dashboards through more advanced types of analytics

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 processes?

What is your plan to engage partners to outsource information technology functions?

Which persistently inefficient processes can you eliminate or improve to increase customer satisfaction?

How do you work with internal customers to ensure dashboards measure enterprise-wide key performance indicators?



Transform mandate: emphasis on IT optimisation to enhance the organisation’s position outside the four walls of the enterprise

20


Business view of IT





Global(23%)

14%

26%

34%

27%

Change the industry value chain

1. Use of “Big” data to expand/enhance customer and partner relationships

2. Simplification for clients and partners

3. Enhancement and expansion of the value chain outside the organisation

4. Enhance relationship with the organisation: business-IT intimacy

Key focus areas based onTransform mandate CIO responses

New Zealand(17%)

20%

20%

26%

34%

Transform

“We are passionate about providing intelligent information back to the business..”

Industrial Products CIO, NZSource: 2011 CIO Study, Demographic Question D: “How does your business look at the role of IT?”; Global Transform sample, n=688 and full analysis of all responses by Transform

mandate CIOs; New Zealand total, n=54; New Zealand Transform, n=9


0% 44%

0%11%

44% 56%

89%

56%

0%

21

“Simplify, simplify, simplify” is the mantra for Transform mandate CIOs

Simplify internal key processes

Simplify for external partners

Simplify for clients

How will IT drive operational improvements for the organisation?


“Clients want better access to their own information, so we will simplify and standardise the “look and feel” across channels for client interactions.”

Banking CIO, United States

“Trying to build ‘information trough’ where business users can drink without effort.”

Financial Services CIO, NZ

No involvement LeadSupport


84%15%1

75%22%4

51%39%10%

Source: 2011 CIO Study, Q10: “To enable and improve your organisation’s operations, how will you help drive the following initiatives?”; Global Transform sample, n=688; New Zealand Transform, n=9. Some responses may add to over 100% due to rounding up


Delivering on the Transform mandate

22


Simplify, simplify, simplify: Make your organisation easier to do business with. Remove unnecessary complexity.

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

Extend the value chain: Enhance and expand influence throughout the value chain.

Harness more real-time data: Generate insights through feedback collection, sentiment analysis and connection to social networks.

Analyse! Dive deep into advanced analytics to develop insights into customer behavior, value chain relationships and competitive intelligence

What are your plans to simplify the customer experience, products and services to increase functionality, use and satisfaction?

Does your dashboard design include real-time metrics, such as internal and external customer satisfaction 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 of Big Data and new IT capabilities to achieve real-time insights?

In what ways are you exploiting leading-edge analytical skills and technology?



Pioneer mandate: CIOs and their teams optimise IT to radically change products, markets, business models

23


Business view of IT





Global (13%)

8%

14%

26%

52%

Radically change products, markets, business models

1. Widespread use of predictive intelligence to fundamentally change the business

2. Search for new sources of revenue

3. Take customer experience to a whole new level using social network analysis and related technologies

Key focus areas based onPioneer mandate CIO responses

New Zealand

(7%)

10%

15%

28%

47%

Pioneer

“Work with the business to find out what they need, to guide IT strategy.”

Industrial Products CIO, NZSource: 2011 CIO Study, Demographic Question D: “How does your business look at the role of IT?”; Global Pioneer sample, n=405 and full analysis of all responses by Pioneer

mandate CIOs; New Zealand total, n=54; New Zealand Pioneer, n=4


25%

25%

0%0% 100%

0%50% 50%

24

CIOs with a Pioneer mandate are focusing on a wide array of revenue and profitability metrics


“We plan to increase revenue and profitability by providing the right platform to measure and analyse data.”Jean-Daniel Renevey, Head of Information Services, APAC,

Roche Diagnostics Asia Pacific Pte Ltd

Activities related to increasing revenue

Low transformative potential High transformative potentialAverage transformative potential


Adding new sources of revenue

Product/service profitability analysisProduct/service utilisation analysis


68%15%16%

60%24%16%

57%22%21%

47%25%27%

Source: 2011 CIO Study, Q8: “How will information technology impact your industry and organisation over the next 3 to 5 years?”; Q13: “Where will you focus IT to help your organisation’s strategy over the next 3 to 5 years?”; Global Pioneer sample, n=405; New Zealand Pioneer, n=4; some responses may add to over 100% due to rounding up

25%

25% 50%

50%

“Clearly focus on enabling the business to interact with the client more effectively and efficiently, and aligned with new product going to market.”

Telecommunications CIO, NZ


Delivering on the Pioneer mandate

25


Innovate on the top line Build predictive intelligence capabilities that can fundamentally change the business

Act on deep customer understanding Discover new sources of revenue through provocative invention/re-invention and co-creation

Exceed the expectations Elevate the customer experience by using social network analysis and related technologies

Develop a culture of analytics Offer dynamic dashboards using real-time data to provide situational metrics

Add dials to your dashboard

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 for the benefit of your organisation, customers, value chain and beyond?

How can you develop 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?



Agenda



The Essential CIO



The CIO reporting relationship is in part driven by the mandate

CIO Reporting Chain

27

Source: 2011 CIO Study, Demographic Question G: “As a CIO I report to the CEO/CFO/COO/Other“; Global sample, n=3,013; New Zealand, n=54


Leverage

Pioneer

Transform

Expand

CEOCFOCOOOther56%11%16%18%

50%14%16%21%

40%25%12%23%

32%27%11%29%

New Zealand9% 15%22% 54%


CIOs have identified three distinct key success factors when implementing major initiatives, regardless of mandate

Source: 2011 CIO Study, Q20: “When you’ve been successful with a major initiative, which of the following actions have proven most important?”(n=3,018)


“We will create value through the ability to manage beyond line responsibilities and building constituency across the company."

Cezary Kosewski, CIO, Sklepy Komfort S.A.

Having IT / business talent in place

Manage beyond line responsibilities

Create right conditions before starting

Build cross organisation constituency

Obtain budget for end to end realisation

Winning client / citizen support

External stakeholders constituency

Determine proper pace of activities

Guiding solutions through procurement

“It's about organisation development and skills competency. Bringing in talented people to lead changes."

Travel CIO, Singapore

1

2

3

4

5

6

7

8

9

NewZealand

2011Global CIO

2011

1

2

3

4

5

6

7

8

9


The most successful CIOs will be those who understand anddeliver on their mandates, aligned with the organisation’s strategy


29

Leverage mandateStreamline operations and

increase organisational effectiveness

Expand mandateRefine business processes and

enhance collaboration

Transform mandateChange the industry value chainthrough improved relationships

Pioneer mandateRadically innovate products, markets,

business models Use “Big data” and real-time info Simplify for clients/partners Enhance and expand the value chain Use risk management frameworks Use visual dashboards to support informed decisions

Outsource Communicate & collaborate internally Focus on business process management Review and update legacy environment Integrate business & technology for innovation

Standardise infrastructure & processes Control legacy costs Implement collaboration tools for internal clients Gradually introduce technology Have the right business & IT team on projects

Pilot technology for social value Explore new sources of revenue Enhance customer experience Pursue non-stop growth Pursue non-stop growth

“Internal collaboration is a must, cultural issues have to be addressed, and knowledge has to be shared and used.”

Banking CIO, India

“We need to cope with change by re-engaging with our internal customers in a more intimate way - the solution is part structural and part cultural.”

Government CIO, Australia

“Using IT tools and applications to help the business units to have better info and visibility to manage the risk, will help lower costs and improve competitiveness.”

Electronics CIO, Taiwan

“When we improve or create new processes, we get closer to the customer and generate new revenue sources.”

Automotive CIO, Brazil


Continue the conversation atwww.ibm.com/theessentialcio


30

© 2011 IBM Corporation 1 IBM Institute for Business Value Insights from the Global Chief...

Documents

Transcript of © 2011 IBM Corporation 1 IBM Institute for Business Value Insights from the Global Chief...