I recently came across an interesting article on the Dawn of the hybrid CIO which talked about a new strategic frontier focused around the opportunity for CIOs to lead more broadly through the power of customer data.

In reading this, I reflected on my own recent evolution of my CIO role, and wanted to share my thoughts on where I looked to have broader impact, and what other CIOs might consider if they aspire to play a broader business role, and position themselves to drive revenue and impact.

The opportunity

In my organization, we have been continuously transforming the technology, the company and our business over the last few years to stay competitive and look for new opportunities.  On the one hand, this has been a good lesson in the fact that transformation does not end after the first big effort, but must happen continuously.  On the other hand, at each stage of transformation, I have looked for the opportunity to not only work with my CEO and executive team peers to look for ways to leverage technology in the transformation, but to take the lead to transform the company through technology.  This – for me – has provided a chance to add bottom line value in new and different ways, as well as bring my executive team along to truly understand the power of technology to drive the business.  (As a side note, I shared some of the valuable things I learned about linking IT investments to business value in an earlier transformation effort in this Center case study entitled Linking IT Investments to Business Value.)

More recently we have been looking at new ways to leverage data and transform the services we offer to our existing client base.  In the course of this effort, we uncovered a significant challenge with our client services department.  I saw the opportunity to leverage the approach I had taken within IT to re-organize delivery support, streamline communications, and improve our interaction with internal customers, and use it to revamp our external client services function.  I was ultimately able to make the case for taking over the client services function along with IT, and the result is a significant improvement in client satisfaction and service delivery.

Making the case

While this step seemed to be an obvious one to me, it took some education with colleagues and clients for them to see why the role of the CIO should transform again. And the ultimate case touched on the points raised in the article I referenced earlier – it all comes down to the data.  Given that 99% of the issues that arise in our industry- and in our company’s service delivery – are data related, what makes better sense than managing that within the CIO’s office.  My own business background in consulting and service delivery was helpful to the case as well, but I see the data as driving opportunity for all CIOs to take on more aspects of driving the business and leading the company towards true customer centricity.  After taking the time to build the case and bring my colleagues along, upon presenting the new paradigm to the Board, they understood the need and agreed with the value immediately.

Where is your opportunity?

I know that I am not alone in seeing the leadership opportunities for CIOs in the exploding role of data across all industries and enterprises.  In fact, a number of my fellow Center CIO members have contributed to Center research on this topic.  My question is – how will you seize this opportunity in your own organization? What are you doing to become a “hybrid CIO?”

	Center for CIO Leadership Member Success Case   Dileep Somani, OTE Group     “The ‘Communicating Business Value’ program is an excellent program and really adds value to the CIO as an individual, and helps in bridging the gap between IT & business.”		Member Profile:   Dileep Somani, Chief Information Officer at OTE Group, has 25 years of experience working in various types of industries in IT & Business i.e. Steel, Chemical, Textile and Trading, with the aim of helping organizations in achieving market leadership by aligning Business and IT (integrating technology with business objectives).   Dileep is an engineering graduate with CISA & PMP Certification.  He also has 13 years of experience in SAP–ERP, CRM, BI & related solutions.   Connect directly with Dileep Somani by visiting his member profile.

Dileep Somani is Chief Information Officer at OTE Group, an automobile and auto parts conglomerate based in the Sultanate of Oman.  He joined the Center for CIO Leadership to access the peer community and content, and gain insights and advice from peers and experts that he can leverage in his role as CIO.  Dileep has attended a number of Center for CIO Leadership education programs and virtual events, with the aspiration to build his competency in a particular area of business leadership:  to more effectively communicate the value that technology can enable throughout the enterprise – and to be able to communicate the value in terms that the business understands.

CIO challenge: communicating effectively with the business – in business terms

Dileep, an experienced CIO, participated in the online education program, “Communicating Business Value,” a custom online program by the Center for CIO Leadership as well as a number of Center virtual events.  Since completing the Communicating Business Value program, Dileep is using all 3 program components – defining, measuring and communicating business value – in his role as CIO at OTE.  Read the full member case to learn more about how Dileep is applying the value he has gained from this and other Center events and activities within his own organization.

Read more detail in the full member case attached below.  If you do not see the file below, click here.

This is my third posting about IT practices that should be mandatory in all IT shops.  Previously I opined about reporting to the CEO and the need for steering committees.  This subject, project audits, is far more difficult and controversial.  I will try to outline the reasons that it should be required and why it is done very infrequently.  Then I will outline the best way to accomplish it.

Let me begin by saying that this should only be done for large projects that have been approved by the IT Steering Committee.  The definition of a large project is determined by each company but it should be roughly defined as those projects that have a significant effect on the corporation. These are the main reasons that an audit should be done:

1. In order to get a major project approved, most companies require an ROI calculation in order to compare one project to another.  In many cases, the user will exaggerate the ROI in order to help in the approval process of the project.  Project audits will reveal the actual achieved ROI and compare it to what was promised.  In the long term, this practice will result in more thoughtful and accurate ROI's and ultimately a more effective project prioritization process.
2. One of the major issues with IT and its reputation within a company is its value to the overall corporate mission and success.  A regular audit process of implemented systems gives IT and users alike a non-biased look at the actual value of the system.  This is great information to have during the budget process when IT costs are challenged especially in a non-chargeout environment.
3. The audit process provides a check on IT to assure that the project that was approved fulfilled the objectives that were promised.  It also provides an analysis of the proposed cost versus the actual cost of the implementation.
4. The audit process provides a check on the user department to assure that specification creep did not cause a significantly greater project cost than was approved by the steering committee.

Since there are so many good reasons to conduct a project audit, why isn't it done more frequently.  Here are the major reasons:

1. Any reasonable analysis of the effectiveness of the project accomplishing its goals cannot be done until, at least, one year from project completion.  Oftentimes even more time is required to enable the users to achieve the promised savings or sales improvements.  This causes significant problems because, by this time, many users and IT personnel may have moved on to other projects or have left the company.
2. Many projects use reductions in head counts as a way to improve the promised ROI's.  However, once the project is up and running they will reassign the displaced head counts instead of taking the cost reduction.  Seldom does the user department want to engage in a discussion to justify this reallocation of resources despite its use to justify the project.
   
   
3. The project audits must be done in the user department since that is where the revenue increase or the savings are achieved.  Seldom will the users volunteer to conduct such a study since they have usually moved on the other more pressing endeavors.

As a result of all of these factors, major project audits are a rarity in the modern corporation.  My solution is simple and it provides an easy way to accomplish the objectives.  The process of project audit should be done by the finance department as part of its regular analysis of the proper use of the corporations financial resources.  In some large corporations, this work can be done by an audit team that already exists in the finance department. This department should provide a non-biased check and balance for the significant corporate resources that are required by large IT systems. 

I believe that properly administered project audits accomplished by the finance department by people who have an working knowledge of the project and its importance to the company is a way to make IT much more relevant to the corporation. In addition, it answers the question often proposed by the CEO "What am I getting for my significant investment in IT." 

Let me know what you think.  i would love to hear from you.  Paul

	Center for CIO Leadership Member Case   Brian Margolies, Allied Beverage   “By integrating business and technology, we transformed a traditional, decentralized business and technical environment into a ‘ready-to-serve’ technical organization that delivers advanced service-driven technology to the company and its customers.” — Brian Margolies		Member Profile:   Brian Margolies is the Chief Information Officer for Allied Beverage Group, New Jersey’s largest distributor of wines and spirits. He is responsible for aligning IT’s strategic direction, tactical policies and standards with that of the company’s internal and external constituencies.   Prior to Allied Beverage, Brian served as Vice President of Information Technology Planning and International Operations for Scholastic Inc. Brian spent a majority of his early career in financial services in a variety of analytical and managerial roles for companies like Dreyfus and Metropolitan Life.   Brian holds a BBA from Hofstra University in Marketing and Accounting and earned his MBA in Management Information Systems from Pace University. Brian is a member of the Center for CIO Leadership Member Steering Committee. Connect directly with Brian Margolies by visiting his member profile.

A Transformation Journey

Allied Beverage Group, LLC ("Allied"), as it is known today, was created by the merger of three organizations, all leaders of the wholesale wine and spirits industry in New Jersey dating back to the Repeal of Prohibition in the early 1930s.

Bringing together these individual companies to form Allied, also brought together many different systems, processes, and cultures. Brian Margolies joined the company in 2009 as Allied’s first Chief Information Officer and immediately embarked on the transformation journey to support the new enterprise.

Learn how Brian approached the transformation challenge, got the buy-in and support from his executive peers, and built a streamlined, business-focused IT team, ultimately creating an agile, more competitive, more dominant company able to serve customers faster and better through internal integration and external collaboration.

How the Center has helped

“Early in my time at Allied, I joined one of the Center’s virtual roundtables on innovation. I took a lot of what I heard on that session to heart and integrated it into how I was thinking about the potential for Allied.” – Brian Margolies

Brian has been a member of the Center for CIO Leadership since 2008 and throughout that time has participated in a number of Center events and initiatives, and most recently was invited to join the Center’s Member Steering Committee to help the Center increases its value and impact for members. Through his journey as a CIO, Brian has found the peer advice that the Center provides to be very helpful as well as the way the Center extracts and packages the insights from research, education, and Center-sponsored events. He shared several examples.

• Innovation insights from peer advice drove change
• Perspectives on engaging with stakeholders improved his ability to lead
• Reinforcement of the role of business leader increased his impact

Read more detail in the full member case attached below.  If you do not see the file below, click here.

The Center recently hosted a virtual roundtable on an important topic to CIOs, Partnering to Drive Change through Analytics, where we explored how organizations are applying analytics best practices today, the business value that the best performing organizations are experiencing.

In preparing for the session, I developed some observations on the topic that I think provide a useful perspective for CIOs as you all consider taking action on getting value from leveraging analytics and creating business value in your own enterprise.

Not a new topic

In researching the literature prior to the session to provide some historical perspective on how far back this topic goes, I discovered that people have been talking about what we describe as this massive explosion of data, initially called information overload, for longer than many of us have been in this industry. From what I could ascertain, the earliest known attribution of the term “information overload” was credited to an IBM advertising supplement in the New York Times on April 30, 1961. So obviously this is not a new topic.

So what’s different now: more data than ever before

That being said, we are clearly at a new frontier of information overload and explosion of data, which is astronomically more challenging, but at the same time very exciting from the point of view of being able to impact the way we do business.

To put this into a context for today, I like to look at the retail industry, which is at the forefront of collecting massive amounts of data, and more importantly putting that data to use in changing the way they go to market, manage the customer experience, streamline the supply chain, and create the next generation customer. Walmart is often cited as a great example as a retailer leveraging data and analytics across all of these elements. A fact that I found particularly noteworthy - as of about nine months ago, Walmart was processing over a million customer transactions per hour, feeding databases that were estimated in excess of two and a half petabytes (roughly the equivalent of 167 times all of the books in the Library of Congress.)

Walmart has unprecedented insight into what their customers are doing, what they want, and how to respond across their 8,500 stores worldwide. At the same time, they need to find a way to translate that insight into actions that drive customer benefit and stakeholder value.

How should CIOs respond to this incredible opportunity?

“Revolutions in science have often been preceded by revolutions in measurement,” said Sinan Aral, a business professor at New York University, in a 2010 article in the Economist. He went on to say that just as the microscope transformed biology by exposing germs, and the electron microscope changed physics, the proliferation of data is turning the social sciences upside down.

I see that as representative of the conversation we as CIOs should be having now – how to apply this insight, these data, to become the microscope for how businesses can learn and advance ourselves and our industries. There are a few takeaways for me from Katharyn White’s presentation that I would encourage CIOs to consider in looking to manage these conversations.

• It’s a journey – the research presented reflects the evolutionary process of adopting, implementing, and embedding the value of analytics in the enterprise. And as Katharyn emphasized, the process of gaining buy-in and creating change is actually a core part of the implementation. In leading change management efforts myself over the years, I see that implementing analytics is the type of program that requires deep change across the enterprise, and core shifts in the way people make decisions, operate and go to market. CIOs can leverage their expertise in change management, as well as their enterprise-wide view of data and information, to make the journey more successful.
  

• Learn from others – the research also showed that companies can be successful getting to value across many industries; success in analytics is not industry dependent, or even geography dependent. There are companies of all types applying best practices and getting exciting results – whether it is in growing sales, increasing efficiencies, or improving individual customer interactions. Katharyn shared the view that success with analytics benefits greatly from a cross-industry perspective, and from seeking out examples from many other environments as a way to leapfrog in your own industry. This echoes my own experience – and that of the Center’s commitment to peer-sharing. CIOs should seek to systematically leverage learning from others to innovate in an emerging area like analytics.
  

• Leverage your C-suite relationships – by definition, getting value from analytics, especially as companies migrate from aspirational to experienced or experienced to transformed (as described in the research), clearly requires data or information to be collected across functional silos and/or across multiple business units. Whether or not the data collection and management moves to the point of being centralized within the enterprise, there needs to be an integrated and shared view of who is doing what, and how they data can be cleaned, verified and leveraged across the silos. This is an important opportunity for CIOs to leverage your hard-won C-suite relationships, and reach out to connect on an integrated view of the possibilities to move to value in your enterprise. One partnership in particular that Katharyn mentioned – the one with the Chief Marketing Officer – struck me as interesting for CIOs to consider. Analytics is at the forefront of where marketing and technology are coming together, and the partnership represents an emerging opportunity for CIOs to truly push the needle on analytics and how the company goes to market.
  

What are you doing in your organization to move the needle on the path value through analytics? What lessons can you share with others?

I wanted to underscore the comments made by Katharyn White, in the Virtual Roundtable "Partnering to Drive Change through Analytics" on March 23.  In my experience, surfacing IT Cost Transparency analytics for a large financial firm, the reporting alone was not the big win.  What took equal if not more effort, and helped produce actionable results was the leadership messages coming from IT to frame the new information and reporting—that this was a process that would transform the internal budgeting and cost allocation process, not simply another element added to the existing process.

The ability for a business partner to see exact detail of their IT spend is only valuable if the costing context is provided and the variables explained. So the CIO's role is far beyond finding the resources to get the job done, but must lead the transformation and communicate and manage expectations clearly across the organization.

On behalf of the MITSloan CIO Symposium’s organizers, sponsors and partners, you are cordinally invited to visit The MIT Sloan CIO Symposium - Video On Demand. It's Free..

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Our mission is to explore how innovative technologies and leading-edge academic research can help address the practical challenges faced in today’s changing volatile business environment and economy. We trust that this new addition will be an important contribution to the IT and Business community globally. Senior IT decision makers engage with each other and with thought leaders from academia to find better ways to sustain their leadership in the effective use of technology to improve business performance.  This is where the future is made.

Please feel free to contact me should you have any question.

Abbie is one of my favorite people to follow in this cyber world.  Abbie currently runs her own firm Lundberg Media LLC and describes her current mission in these words:

“As President of Lundberg Media, Abbie helps CIO's and their senior teams translate complex issues into clear messages to speed organizational buy in and delivery of results. Whether introducing a new technology, delivering a new capability or rolling out a whole new strategy, meaningful communication is central to a CIO’s ability to effect change. Few communication consultants offer the depth of business technology insight that Lundberg Media provides, and few technology consultants can match our communication strengths. We are uniquely positioned to provide this essential service to CIO's and their teams.”

I couldn't agree more.  Abbie was the Editor in Chief of CIO Magazine for 13 years and I can not think of anyone who has greater knowledge of Business/Information Technology and the ability to communicate in non-technical everyday language.  I strongly recommend Abbie if your talents as a communicator aren't your strong suite.

Here is Abbie’s information to add to your list of “Who’s Worth Following”:

• Twitter - @abbielundberg
• Facebook - Abbie Lundberg
• LinkedIn – Abbie Lundberg
• Web Site: http://lundbergmedia.com/

I continue to update the list of people I’m following and based upon the number of views of my posts it appears this is a helpful service.  Let me know what you think.

Bill

William A. Crowell

william_crowell@hotmail.com

Twitter: billcio

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