Out in front
The same can be said for what is happening to the CIO role itself, according to the State of the CIO Survey 2013.
This year, more CIOs report they are simultaneously working — if not leading — non-IT areas in the organisation, and taking on the role of business strategists. They are at the forefront in advising the business on the possibilities of technology in cutting costs and developing new revenue streams. These meetings with executive colleagues meant developing their lieutenants who can step up on acting or full-time CIO roles.
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More and more of them also find themselves working across agencies, sometimes with competitors, on joint ventures. And, as this year’s report shows, more of them are working with customers — through face to face interactions or working on systems that will make it easier for customers and industry partners to deal with them.
CIOs across sectors share their experiences as they step to these new leadership challenges.
Rise of the business strategists
Tofigh Alizadeh, chief operations officer, NZPM (Plumbers’ Merchants) Group, says the findings of this year’s survey resonate with him. “We are working more and more with our shareholders, who are also our customers,” says Alizadeh.
NZPM has around 1000 shareholders — all plumber business owners who are customers of the group’s subsidiary Plumbing World.
Alizadeh joined NZPM from Turners Auctions, where he was both CIO and general manager of business strategy and planning. But at NZPM, and even at Turners, his focus was beyond IT strategy.
“We were focusing on how to increase market share, how to develop shareholder spend, how do we develop shareholder numbers. What are the strategies that you need to put in place?”
Alizadeh also looked at optimising the supply chain and inventory management. “I made recommendations around joining business units for better efficiency, better transparency of information and lowering the number of touch points that we have, from buying, to actual retail stores we have, or to customers.”
In 2011, the group launched the concept of NZPM Extra, a loyalty programme for shareholders. NZPM partnered with selected suppliers that can provide discounts and corporate buying rates on a range of products and services like petrol, software, telecommunications or computer hardware.
But as Alizadeh worked closely with the shareholders, the focus shifted to how to help them develop the business rather than just supplying them products. “We put a package together for our shareholders so that they can start managing their business effectively and to develop a business rather than just becoming a trader. We want them to develop a viable or sustainable business.
“But before you do that you have to put in place some of the basics the business needs — good financial management, good database management, lead management, identifying your target successor.”
Having been a CIO has been very helpful in his role as operations chief. “The CIO background definitely helps me to bring different concepts that make up the omni-channel together, and package them up and present them to the business in a more sensible way.”
“The more important thing is we are simplifying the business,” he says. “We are changing the processes to deliver better customer services and more efficiency in the business — which translates to better sales and profitability”.
“You find many CIOs nowadays with responsibilities that are well beyond technology,” says Ben Robinson, CIO of Paymark.
In his case, it involves working on projects with external organisations, like the Trusted Service Manager (TSM) Paymark is building with the telcos Vodafone, 2degrees and Telecom NZ.
TSM will allow customers to make secure payments using their mobile phones. The infrastructure makes use of an application with NFC (near field communications) capacity built in. Rather than having to deal with each bank and telco individually, they will just have to deal with one organisation, he explains.
It will be a separate venture with a separate managing director, with both Paymark and the telcos having a shareholding, says Robinson. He compares the joint venture to the collaboration among banks to form ETSL (former name of Paymark) which runs the largest Efpos network in New Zealand. “We have got the opportunity again and the technology won’t hold us back,” he says.
Robinson’s involvement in other non-technology projects has also given him insights with regards to succession, or appointing an acting CIO.
“You can only do this once you have put a lot of effort into building your team, he says. “If you have a team that doesn’t work well together, it is hard to put one of them in charge.”
“When I became CIO, I took a look at my management team and who could replace me. And at who could replace those managers, and the next layers down again. We made a conscious effort to develop people and it has worked well.”
Elsewhere outside the enterprise space, the theme of working across agencies resonates. “We are seeing unprecedented ‘WoX’ (whole-of-x) initiatives,” observes Peter McDowall, CIO of St John.
McDowall cites the electronic patient report form (ePRF) project for the whole of ambulance sector which sees the latter working with health agencies to make sure health information is connected. Three years ago each agency was planning their own solutions, but today, agencies involved in fire service, ambulance, police and civil defence are now developing a common view of directions and priorities related to telecommunications and related technologies.
“I imagine it is a combination of the financial climate, political direction and the right organisational leadership which is creating the environment for unprecedented collaboration,” says McDowall
“Obviously there would be competitive reasons why commercial organisations might not collaborate, but for commodity services, I don’t see why not,” he says. “Amazon becoming an infrastructure as a service provider to their traditional competitors is probably one of the better examples of this happening.”
Powerhouse of innovation
Owen McCall says more CIOs spending time with customers is definitely a positive trend.
“If you go out and spend time with your customers, you build that relationship and learn what they do and don’t like.
“It is very hard to ignore what they don’t like,” says McCall, a director of Viewfield Consulting and a former CIO. These insights will provide the CIOs platform to fix things.
For most CIOs, he points out the internal customers would still be number one. But as enterprises experience “convergence of channels”, move towards mobile technologies, social media and online, this will change.
The external customers will over time be more and more dependent on the technology we provide, he says.
“Over time, I think it will be much more balanced,” he says.
In the next three to five years, 70 percent will be internal customers, and the rest will be on external customers. But in the next 10 years, it will be 60 to 40, or half and half. “That is a good trend.”
If there is a message he will share with CIO colleagues is this — to focus on information.
“We call ourselves CIO [yet] we still tend to focus on the technology, not the information.”
“They are information problems, they are not technology problems,” says McCall as he cites trends cited in this year’s report, including mobility, business intelligence, big data and data management solutions.
“We need to move to that information domain”.
Get the basics right, he says, and then you will get the opportunity to be the “powerhouse of innovation.”
“There are very few step changes in today’s world without technology and information being the core of it,” says McCall. “We need to make sure we get those basics sorted so we can focus on information — and be the heartbeat of innovation.”
Sidebar: Turning point
Shinji Hasejima drew on his experience of more than 30 years at Sony Corporation, including four years as global CIO, to advise other companies working with offshore partners.
He contemplated retirement, but opted last year to put his global experience to use when he joined Gartner Japan as group vice president and executive partner. His Gartner role ensures he works in IT but across different industries.
Hasejima’s background is a systems engineer, but he says as he moved to various roles in ICT, it was important to get close to the business units. “You have to be,” he says.
This relationship building was critical as he worked on a range of projects like developing the e-commerce system at Sony. When he was global CIO, more than 3000 IS people reported to him, including the regional CIOs.
He says he shares his experience in working in multinational settings and dealing with external partners, and mines Gartner’s research.
The IS manager used to be in charge of the back office but may now find security and telecommunications part of the role. Then there is shadow IS, he says, where staff run businesses without IT expertise, but call on the CIO if these systems are hacked.
“The department needs to be transformed to deal with new responsibilities, with new technologies. The role itself doesn’t stay the same, it is changing.”
He says the IT department and the CIO should redefine their mission statement at least every two years because the role, and the expectations of the users, are different.
As information technology becomes an important factor for the company to survive and grow, the CIO is required to be a leader, not a manager.
Leadership from the front and back is important, he says. “There are big opportunities, big risks, and higher expectations.”
Sidebar: Other highlights from the survey
This year’s report is based on the results of an online survey in September 2012, with 563 respondents – including 57 from New Zealand - who indicated they are heads of IT. For more information on the global findings, go to: http://bit.ly/10MWfjt
Divina Paredes (@divinap) is editor of CIO New Zealand.
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