Javed Mushtaq, CIO, Pakistan Telecommunication cooperation Limited, Pakistan, Wired and wireless telecommunication.

IT professional, with 24+ years of IT leadership experience in Telecommunication, Financial, Health Insurance, Software House, Petroleum industries and in governance sector. Experience in business-IT alignment, designing, developing and implementation of state-of-the-art IT solutions to support business.

For the last seven years, I have led two telecom operator’s IT department - one for a green field operator and one for the largest and the oldest Telco (130 years) of Pakistan. During this period a state-of-the-art infrastructure was designed and developed, which includes the establishment of a tier III data centre, Security / Risk management, DR site and business continuity procedures. In the area of customer service and agile product development, CRM solutions for wired and wireless products.

The Center for CIO Leadership has requested CIO members and other industry experts to answer three questions regarding predictions for the CIO in 2012. Here are my answers to these three questions.

What are your top 3 CIO priorities for 2012?

1. Cost Rationalization

Year 2012 will continue to see IT cost rationalization due to the financial crisis and political instability around the world. The IT industry will transform from CAPEX model to OPEX model of spending, with more of a revenue share model than a typical customer- vendor relationship model. Hardware and Software services will become more commoditized and will be consumed as service, rather than as company assets.

2. IT Commercial Lab - Cloud Computing

IT will be taking a more proactive role in the area of product development than before as a business enabler; IT will transform from fulfillment role to concept to market role for the organizations. Especially in the telecommunication sector, where the conventional revenue streams are drying up, more ICT products are required for stickiness and revenue enhancement. For ICT projects, IT will take the lead on concept to market the product process. During this process IT will implement the product in their labs, mature the process of marketing/selling and supporting the product for commercial use, with IT department being the first customer of the product/service. One of the examples is public cloud.

3. Security / Business Continuity

The enhanced role of security will be seen in the next years; security will not be limited to securing the network from hackers, but will also be extended to ensure operational continuity with agreed SLA with business, in order to manage business expectations.

How will 2012 be different from 2011 for you as a CIO?

IT will be the differentiating factor for the business, more process agility/automation and more business intelligence will be required to compete in the market by business. CIOs will need to prepare themselves and the IT department for this transformation.

What organizational or industry shifts are you expecting in 2012?

Convergence will happen between the products, technologies and roles. With reference to telecom post- and pre-paid will be converged and payment method will only be the differentiating factor, with all other factors common like customer care/tariffs etc. The communications and information technologies will be truly converge under ICT one domain.

Paul M. Ingevaldson

Former Sr. V.P. International and Technology, Ace Hardware Corp. (Retired)

U.S.A.

In my last position at Ace Hardware, I was responsible for all IT operations at Ace. In addition, I had responsibility for Ace’s international business with stores in over 70 countries. I previously worked at Sears and was in IT for over 40 years upon my retirement.

Top three CIO priorities for 2012

I believe that world events will have more effect on the IT department’s priorities in 2012 than any time in recent history. The major events I’m referring to are:

1. The perceived recovery of worldwide financial markets
2. The U.S. Presidential elections
3. A major cyber warfare attack

Let me discuss these developments one-by one. I believe that there will develop a consensus by mid-2012 that the worst is over and that there will be growth again in the major western economies. Once this belief begins to pervade the mindsets of corporate boards, there will be lengthy discussions on how to maximize competitive advantage and begin to utilize the hoards of cash that is sitting on balance sheets.

These growth decisions will put great pressure on IT budgets since most CIOs have been cutting costs and downsizing during the last several years. As usual, companies will have no sympathy for the plight of an understaffed IT department and will expect IT to react quickly to the demands of the business. Once again, IT’s ability to move quickly will be challenged.

This will likely result in more outsourcing, cloud solutions and ERP solutions. There will be little time to evaluate long-term impacts. Instead, the cry will be to implement as fast as possible for the good of the corporation.

I believe this trend will also spawn a dramatic increase in mergers and acquisitions. This will have an even greater impact on IT resources since IT is usually brought into the picture too late and after the timeline has been negotiated. These actions tend to cause the development agenda to be put on hold and field expedient solutions which are favored just to get the work done.

The second major trend will be the U.S. elections. Again, if businesses begin to feel that a more business-friendly administration will win and taxes may be reduced, the power of the U.S. markets will be unleashed. This will have an equal if not greater effect on IT than was mentioned above.  Combine an improving financial environment and a business-friendly Washington, D.C., we would have the beginnings of a renaissance in IT development and great pressures on IT departments to deliver innovative solutions to move their companies forward.

The third trend that will impact IT in 2012 will be outside cyber attacks. Over the past several years, we have seen a rising escalation in these incursions. So far, none have had lasting effects on countries and companies although I’m sure some attacks have not been reported due to public image concerns. On an international scale, the attack by Stuxnet on the Iranian centrifuges is a case in point. The Economist magazine had a cover story about cyber warfare in its July 3^rd 2010 issue. The U.S. now has a cyber command established in 2009 and commanded by a four star general.

I believe that there will be a major attack somewhere in the world in 2012 and this will result in placing even more attention on IT by corporate boards and management to assure protection from similar attacks. This will put pressure on CIO’s to learn more about the subject, enhance internal security measures and prepare action plans should the worst occur. It will become clear to business that this is a major vulnerability that could put their company’s very existence at risk.

Therefore, I think that it is necessary for CIO’s in 2012 to become more politically savvy and more internationally savvy in order to anticipate the development of these trends.  In addition, CIO’s should be thinking today of how to protect their firms from attack and at the same time figure out how to grow in the post-recession economy. As usual, the CIO role is ever-changing, demanding new and different skills as the world adapts to growing technology dependence.

Arun Gupta, Customer Care Associate & Group Chief Technology Officer, Shoppers Stop Limited, India

You can read more about Arun on his blog Oh I See ! (CIO Inverted)

The Center for CIO Leadership has requested CIO members and other industry experts to answer three questions regarding predictions for the CIO in 2012. Here's my approach to answering thse questions.

Like the sun goes down in the west every day, the earth goes round the sun, people make New Year resolutions and the IT industry makes predictions for the coming year. These lists offer hot technologies, CIO priorities, business priorities, technologies that will not last the year, ad infinitum. So what kind of list am I going to create ?

Every CIO already knows his/her current priorities, for the next year, and over the next 3 years (broadly) that fits in somewhere in the organization long-term strategy. These are dependent on many factors, some are (though not limited to) industry, size of the organization, geopolitical situation, global market dynamics, consumer sentiment, organization dynamics, profitability of the company … The broad collation of priorities through research conducted is generic enough to statistically fit over 80% of the CIOs globally and is available free or paid depending on whose list it is. So I will not pursue this line.

Different matrixes once again based on widespread research and opinions will tout waves, quadrants, hype curves, scatter charts, bubble charts and so on about disruptive technologies that would matter in the future. Stay with the bleeding edge or lose competitive advantage is the mantra. Some remain emerging technologies for decades like a solution searching for a problem to solve, while many remain niche or never get out of the lab to be adopted in mainstream business. I do not believe I understand enough about these esoteric technologies to offer predictions.

Having been a CIO or equivalent for more than decade and half across 7 different industries, I think I do understand the CIO travails and tribulations. To me every industry brought new opportunities for learning as well as new paradigms on how existing or new technology can be used. Every slowdown or black swan provided a platform to introspect on successes and lack of some. The next decade and half will bring disruptions unimaginable today. So here is my list for 2012 and beyond; can’t predict that all of these will be applicable to everyone, but statistically over the year you will find some connect.

1. CIOs globally will continue to be challenged on operating budgets. Capital investments will become relatively easier; operating expenses will need to be controlled very tightly.
2. BITA (Business IT Alignment) will fall off the priority list for many as it will no longer be an issue. Business will acknowledge IT contribution and will work with IT to plan business goals. There will be no separate IT goals.
3. Attrition will not be the problem, retention will be; with economic and political uncertainty, staff will hang on to their respective jobs. CIOs will have to take some hard decisions.
4. Clouds will be the first choice for deploying apps for the mobile workforce. The rest will continue to access applications behind the firewall. Hybrid clouds will remain experimental as CIOs figure out that it really does not save money. CIOs will no longer build data centers.
5. Lead by Consumerization, mobile devices will be out of IT control (for good) and the personal device will find a way to get inside; resisting CIOs will have to provide equivalent additional device, which eventually the Business will turn down. Managing multiple screens will become a pain for the Executive who will challenge IT to make it simpler. The phone as a corporate device will thus be replaced by the tablet over the next 2 years.
6. CIOs will or be forced to challenge the cost of sustaining big ERP (licenses, support, etc.) as it keeps growing; alternate support vendors will gain market share. Usage will shift out from the office to using marketplace supplied micro-apps thereby challenging the existence of big ERP in 5 years.
7. Social media fatigue will set in and even marketing teams will be asked to create ROI for expenses and investments on such initiatives. CIOs will need to manage expectations around social analytics while Consultants will thrive with maturity models and make loads of money.
8. The CIO will continue to be tasked with managing information security with the CISO reporting into him/her. A few cloud bursts (cloud security breaches) will make matters worse before things settle down over 2013 and beyond.
9. Big Data will remain high on hype with vendors pushing and CIOs scratching their heads if it really gives the benefits promised.
10. Custom development of solutions will wane with ocean of micro-apps promising to enable business processes as effectively. At the same time appliances will replace generic hardware.
11. Many CIOs and research analysts will not agree many with the above points.

I could have gone on and on but will stop now. I thought 11 is good for now; why 11 and not 10 ? According to Hindu scriptures it is an auspicious number and if you don’t believe in such things, then I would ask why 10 ? I know Moses had something to do with it !

As a CIO, there are a lot of things that can cause insomnia even among the best of us. It could be that new application that went in with a minimum of testing due to pressure from the boss or the user. Or it could be that major vendor that just raised the support fees for their software and totally blew the support budget.  Or it could be the loss of a key person who just left the company and went to work for a competitor. Or it may be the soft sales that are going to put pressure on the overall IT budget.

However, these are minor inconveniences compared to the one issue that kept me awake at night and that was business continuity interruption due to a disaster in the IT department. It could be a fire or a flood or a hurricane or a tornado or some other act of God. However, the most likely cause in today’s age is some kind of intrusion from a person or organization bent on doing damage to the company’s systems and thus the company.

The potential affects on the company can be devastating. Just imagine if the employees can’t use their computers due to an outside intrusion that has prevented access to our systems. Or it could be that sensitive customer data has been compromised. Or competitive information has been pirated. What would happen to your company if you could not process orders from customers, you could not pay your bills or you could not order inventory. And remember, everyone in the company would be looking at you, the CIO, to explain the problem and tell when a solution would be found.

In addition, if you work for a publicly held company, the disclosure of a business interruption can have a major impact on your stock price. This then broadens the people searching for answers to Wall Street analysts, the company’s Board and the company’s shareholders. There is no doubt that this is the stuff of nightmares.

So what should you do. I would recommend that you, the CIO, become a lot more engaged in the security side of the business. Many CIO’s are not up-to-date with this area since it is relatively new and not generally part of the background of CIO’s today. The usual approach is to be aware that there is a security department in IT and that it is understood by the management structure that oversees this function. It usually only gets your attention when something goes wrong.  I would argue that this is not enough due to the potential danger to the company, the department and the CIO.

I would recommend that you set up a regular meeting with your security staff to discuss some of the issues that are before them. The first major effect of this move is to tell the security professionals and your whole department that you consider this area to be very important. It will also give the security professionals a bit of status in your organization. Oftentimes they are mired in the depths of the department and seldom get any feeling that you think that they are doing a very critical job.

I would also consider raising the visibility of the security staff by having them reporting higher in the organization chart. Many large companies already have a VP of systems security.  I would also suggest that you spend some time trying to understand this new area of IT through seminars or reading. I would also recommend a dry run on a regular basis to be sure everyone knows their responsibilities should the worst occur.

I think it is very important that every CIO realize that this area is critical to your company’s future and it must become part of your lexicon and part of your responsibility. By doing this, you will understand the risks and feel better prepared to deal with them. This is the only way that security concerns will not keep you awake at night. Pleasant dreams.

"We have 510,461 followers on Twitter!"

"86,224 people “Like” our Facebook page!"

Now What?

How do we understand what customers are telling us?

How do we engage with them?

Sound familiar? Many of us have heard these questions over the past 12 months.

The rapid rise in the use of Social Media for Marketing and Customer Engagement is pushing the demand for new tools to analyze and leverage large volumes of unstructured data. The deep CIO interest in the topic was illustrated by the level of engagement from the CIOs attending the Virtual Roundtable on Getting Value from Social Media and Unstructured Data (you can listen to the recording here).

The rise of this new medium has significantly increased the need for CMO / CIO collaboration. The days of closely managed brand messaging are over. In the past, Marketing carefully crafted and distributed messages through multiple channels in the loudest possible manner and then ran surveys to evaluate impact. The process was slow and measured. It was the same story at Customer service. Marc Brown, CIO at Del Monte recounted how they used to receive a customer complaint about insufficient pineapple slices in a tin via US Mail. A customer went throught significant trouble to get their voice heard. In this new era of Facebook and Twitter, a customer now has a megaphone of their own, giving them the ability to gain attention and influence brands globally and in real-time. Marketing and Customer Service require an integrated set of listening and analysis technology to effectively engage with each customer.

I captured these key areas CIOs must focus on to extract value from customer engagement on the social web:

1. Acquire the right resources: The skills required to deploy technologies for processing and analyzing large volumes of unstructured data are scarce and in great demand. In addition to a deep statistical background, an individual working in this space requires a good understanding of the key business drivers for success. Analysts should be able to identify industry-specific data to measure the ROI for Social Media initiatives.
2. Develop real-time analysis and reporting: Turnaround time requirements must be analyzed to ensure technology solutions are correctly architected to meet requirements. Faster response usually requires higher investment. It is important to strike the right balance.
3. Ensure agility and flexibility: The cost of experimenting with social media is not very high. Technology must allow business users the flexibility to try and measure multiple options in the real world. Further, wse must evaluate the need for capturing and storing information that may potentially be used in the future.
4. Communicate clear rules of customer engagement: The fact that the customer interaction is conducted in public, it is imperative to be very clear about how employees should engage and respond. Further, remember that customer engagement now occurs at all levels and within any function of an organization. Most companies are developing comprehensive guidelines and training programs to try and make sure that every customer interaction is a positive one.
5. Prioritize quality: It is very important to ensure quality of the analysis. Wrong information can result in decisions with a significant negative impact.
6. Manage security and privacy: Customer interactions on the public Social Media platforms like Facebook and Twitter, especially in highly regulated industries, pose a significant risk that must be appropriately managed and mitigated.
7. Build a stronger business / IT partnership: Business and IT teams need to work very closely together to ensure success. Speed and agility can only be achieved by constant collaboration.

Big Data generated in the Social Media space offers a Big Opportunity but also raises some Big Questions.

I know this topic will be controversial and there will be a lot of CIO's who disagree.  However, just hear me out.  I realize that there are some companies that demand chargeout from their central CIO function.  One good example would be the diversified conglomerate who conducts many different businesses and each one has a complete and separate  P&L and they live or die based on bottom line results.  I would also include functions within a company that are completely discrete from other company functions such that they share very little centralized company functions.

I would argue that in most other cases, charging out IT costs make very little sense.  It would be no different than charging out the services of the central finance department.  I guess I would concede that if finance is charged out than it would be ok to charge out IT.

Here are my reasons for not charging out IT:

1.  It creates the image that IT is not part of the company strategy but rather a utility that can be contracted for by any department.  I believe that the IT resource needs to be tied directly to the strategic aims of the corporation.  It should not be tied to the whim of a department head.

2.  Most companies decide to chargeout because central management does not want to be in a position to decide what should be automated.  I would argue that that is the job of top management.  With IT costing from 2% to 10% of revenue, it must be managed.  This is the role of the IT steering committee. If a steering committee composed of the officers of a company manage the automation agenda, then there is no need to chargeout.

3.  Another reason to chargeout is to fully burden a particular department so that their expense line represents their actual cost.  This approach is very dangerous in a innovative environment where a new idea could have great potential but cannot get traction due to the great startup expense.  If each department must stand on its own, innovation could be stifled.  Again, management could control this situation.  However budget scrutiny oftentimes causes such ventures to be minimized.

4.  In a non-chargeout environment with a strong steering committee,  each project being proposed is measured against the strategic plan of the company and is discussed with a company view not a departmental view.  In this environment, I would argue that scarce IT resources are better utilized.

5.  In a chargeout environment,  all expenses must be carefully recorded so that precise charges per user can be determined.  In addition, some measure of usage must be developed to assess proper overhead expense.  As a result of this rather subjective process, each department gets assessed  a charge each month that can change based on many arcane factors within the IT department such as vendor cost increases, unanticipated maintenance costs, outages, etc.  As a result, there are oftentimes discussions with users each month when the charge is finalized especially if the charge will affect the departmental incentives.  These are difficult discussions with our users that we are trying to serve and prove the value of IT.  All in all, a very contentious environment.

6.  Since each department stands on its own, they can decide to keep the internal department honest and get an outside quote and compare the internal quote to the outside one.  This process can easily lead to rogue applications since outside vendors can easily reduce overhead expenses in order to get a new client.  This does not happen in a non-chargeout environment since costs are retained in IT.  And guess who users come to when rogue applications go bad: Internal IT!

7.  There are certainly downsides to a non-chargeout environment.  The biggest one is for IT.  Since all costs remain in IT, the CIO must defend IT's expenses each year especially when costs are going up.  IT can make the argument that its costs are going up because the steering committee has approved an increase in staff due to a major project commitment.  However, there is oftentimes a collective amnesia to these factors especially in tough times.

8.  On the other side, a non-chargeout environment enables management to easily see the total corporate expense for IT.  This expense line must be managed by top management since it is so significant.  IT can operate at any level and it must be controlled by the company to be sure that expenses are in line with corporate needs and capacity.

9.  Another downside can be that users in a non-chargeout environment can think IT is free and try to develop frivolous applications.  I would say that a strong IT steering committee composed of the company officers would eliminate that risk since the user officer must defend the project against all other requests.

I would love to know what you think.  It would be good to get a dialog going to flesh out this very important governance issue.  I'm sure that there are a lot of CIO's struggling with this decision that could use your wise counsel.

A recently released study demonstrates how the CIO role has continued to evolve and reinforces the strategic role CIOs play within their enterprise. The 2011 CIO Study: the Essential CIO, from our founding sponsor IBM, draws upon interviews of over 3,000 CIO’s from 71 countries and 18 industries worldwide. I have highlighted three areas that I believe are meaningful for our community.

CIOs and CEOs  are thinking more alike than ever before...

The most compelling finding of the study for me is the significantly increased harmonization of the CIO and CEO agendas.   The study provides tangible evidence that IT is not simply an enabler of the business, but a critical component that drives sustainable and scalable business growth.   Asked where they would focus IT to help their organizations’ strategy in the foreseeable future, CIOs and CEOs shared three top priorities: insight and intelligence, client intimacy and people skills. These areas are a significant part of the raison d'être for the Center for CIO Leadership and you can find our most up to date thinking on skills and competencies throughout our website.  Here are some highlights from the study.

CIOs emerging as leaders...

Business analytics and intelligence were identified as the most important technologies for CIOs looking to increase the competitiveness of their organization in the next 3-5 years.   As CEOs are increasingly relying on CIOs to turn data into usable information, information into intelligence and intelligence into actionable insights, the role of the CIO has become much more visible throughout the C-Suite.           

The CIO Mandates...

The study discusses four distinct approaches to IT leadership based on defined characteristics that line up with an organization’s strategies and goals (mandates). Each of the mandates is articulated along with recommendations to help CIOs excel within each area.

I invite you to download ”The Essential CIO”, reflect upon how your path as CIO has evolved, and upon what areas you are focused on for the future. I look forward to hearing your thoughts about the study and to continuing our conversation…

I read an article today in the Wall Street Journal by Michael Totty titled The View From the CIO's Office: Three chief information officers on the challenges—and opportunities—they face. I found the article, and the CIOs’ insights – to be useful and thought provoking to share with the Center community.

The article captures a roundtable discussion with three leading CIOs: Norm Fjeldheim, Senior Vice President and Chief Information Officer for Qualcomm Inc., a wireless-technology company in San Diego; Filippo Passerini, President of Global Business Services and CIO at Procter & Gamble, Co., a global consumer-products company based in Cincinnati; and Frank Wander, Senior Vice President and CIO at Guardian Life Insurance Co. of America, New York.

The article provides excellent insights into the ever-changing role of the CIO from 3 of the most notable IT executives in our industry today. They share some interesting observations for all CIOs and for C-suite executives in general:

• Keeping the lights on and reducing costs is now only table-stakes (necessary but not sufficient) for a high performing IT organization;
  

• Working with internal and external business partners to provide the right information at the right time based upon a clear understanding of their business needs and objectives is a critical success factor within the new normal - essentially business enabled by IT rather than the other way around;
  

• Many of the innovative IT programs (we used to call them "discretionary") which are often the first to be cut when the budget gets tight (which is all of the time), can be funded out of the savings generated by driving operating efficiencies;
  

• Managing the IT change agenda is not about changing IT, but rather it is about enabling business transformation.
  

It is also clear from these brief snapshots that the organizations in which these CIOs operate really get the strategic importance of what IT -- when properly leveraged -- can deliver in terms of competitive differentiation, market share, revenue, earnings and sustainable business growth.

There is definitely a chicken and egg dynamic at work here where the organization needs to be ready, willing and able to embrace the benefits of a well-run technology agenda while the CIO and their IT organization needs to develop the credibility and earn the trust that fosters and continues to nurture that readiness. The CIOs interviewed and their organizations have cracked that code. Now if we could just figure out how to enable more organizations and their CIOs to make better omelets...

What challenges and opportunities do you face in your organization? And how do you recommend that we enable more organizations to make better omelets?