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.

Harvey Koeppel and the Center for CIO Leadership were the hosts for the Virtual Roundtable, which focused on the ongoing education of CIOs, by providing real life examples from industry leaders from all facets of the industry.  Today’s session - Next Generation IT Governance continued to prove that Harvey has the right pulse on the industry and ongoing CIO needs. There were several key take-aways that surfaced from the conversation.

Leaders from Cranfield and Yale Universities led the group in a discussion regarding the need for IT Governance and in how to structure decision-making and create accountability when forging down the IT Governance path.  Having transparency and a framework for effective communications, aids in changing the organization’s behaviors that are necessary to implement successful IT Governance programs.  Another facet of the model is the need for companies to co-exist in a collaborative environment and to have a set of metrics and scorecards to promote the current state of the organization.

The speakers and participants shared their perspectives on this very important topic. How are you looking to evolve IT Governance and enable your businesses to succeed and thrive in this-hyper competitive environment?

Sue Bergamo

CIO

BTE Consulting

Carlos Francavilla, Director, BITCompany, Argentina.

Business & Technology Advisor, more than 25 years of working with IT to enable business transformations.

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 predictions for the top 3 CIO priorities for 2012?

1. Using IT to attract and retain customers.
   Innovation and transformation of existing and new products will be used to satisfy the very fast change in the behavior of customers who are becoming more IT savvy, global, and connected – any time, any place, and with any gadget.
   The CIO will need to combine their knowledge of the entire value chain and processes of the company with the unique awareness of technology's capabilities to push the company beyond merely what is has been and toward what it must become.
   What does this mean?  IT is not aligning with the Business; IT is part of the Business.
   Do you present budget proposals for IT, or budget proposals for growth and innovation and bigger customer engagement enabled by IT?
2. Technology Diversity.
   The old days of a central IT Organization dictating and imposing which Technology is the right to use is gone forever.
   Consumerism of IT will become a reality and the IT Organization needs to be flexible and support any device that the market is producing, and that the people in the organization will choose to buy and bring to the enterprise.
   This process starts at the Board and includes all the people in the organization.  Today which technologies to use is becoming a business and a personal decision, IT must transform itself to be an “advisor” to people in the organization about the capabilities and the risk of the technology diversity and prepare the IT operations to understand this new reality and support it.
3. People Skills.
   The central IT unit with a focus in Technology is leaving room for an IT Organization with more people closer to the rest of the company and the CUSTOMERS.
   Do you have the right people for this this job?  Do you have an IT Organization with a lot of certifications in any international standard or framework for IT that are in the market? Would you be proud of the culture of the IT Organization?
   Prepare the IT people to be an “Advisor” and work head to head with all the other departments in the company.  Think for a moment, with which Business Unit do you work more closely, today?  Operations?  Marketing?  Finance?  You guessed it; Operations will be the answer in more than 60% of the IT Departments!
   Your Department needs new skills far beyond the comfort zone of the IT people, prepare for this transition, embrace the challenge and be proud of your people. 

How will 2012 be different from 2011 for CIOs and IT?

The convergence of the Internet, Web 2.0, and mobile technologies has created a disruptive shift in business.  The era of Business-to-Person (B2P) communications driven by all social (social media, social networks, and social influence) things has emerged as a new model for engagement.

In today’s global environment;

• One billion people connected to Internet
• Four billion have mobile phones with data capable smart phones now providing over 50% of new phone sales
• More than four hundred million people are sharing billions of pieces of content and experiences each week via online exchanges

Social Media have changed the way we do business (customers, partners, prospects, and employees).  We use social media as a platform for discussion of ideas, experiences, and knowledge-exchange. A s we enter the era of business-to-person (B2P) customer relationship systems, those organizations that harness Web 2.0 technologies and platforms to enable B2P communications will be the winners.

As a CIO and leader of an IT Department, are you embracing this disruptive shift?  Are you sharing with your colleagues what you know most, technology capabilities and how to use them in this new Social Media World?

2012 will differ from 2011 in a way that if we as a CIO couldn’t move the Company fast enough in that direction, others will be doing it.

Come on, tweet now with the CMO and other CxO colleagues and start working together to transform the company processes to this Business to Person communication.

Your Board and CEO will be glad to approve your investments when you walk together to the corner office and talk about this transformation.

What business shifts are you expecting in 2012?

Uncertainty will be the word of 2012 and the CEO and Managers will be looking for ways to defend the company against this threat and/or taking advantage of this world in recession.

Are you applying IT to enable the business so that you and your colleagues find the answers?

Are you helping the company to choose the right strategy?

According to Mckinsey, are you thinking about your decisions being better for a company’s competitive position, trying to influence, or even determine, the outcome of crucial and currently uncertain elements of an industry’s structure and its conduct?  Or is a wiser course to scope out defensible positions within an industry’s existing structure and then to move with speed and agility to recognize and capture new opportunities when the market changes?

IT can enable companies to change the structure of entire industries and/or gain speed and agility to companies.  Are you ready for these business shifts?

Are you enabling that your company play and win in the Champions League of your Industry?

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.

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?

CIO 2.0

Pim van der Horst, Managing Partner (COO/CIO) Addition Knowledge House (a KAS BANK company)

Introduction

Times are changing… As a matter of fact, continuously change has become a reality. How is today’s CIO dealing with change? Is the CIO changing or is his role changing?

In my view, CIOs need to change dramatically. Here is my view on the journey and what is next for the CIO role: the CIO 2.0.

CIO 1.0

The “first generation” CIOs had been IT Managers. Then when it became “en vogue” to become a Chief (Chief Executive Officer, Chief Financial Officer, Chief Risk Officer, Chief Procurement Officer , Chief Marketing Officer, Chief Operations Officer, Chief Technology Officer, etc.) there had to be a Chief Information Officer, CIO! So, the IT Manager/Director changed his business card. His job and responsibilities stayed the same; he or she just had a new title.  These early CIOs were what I would call the CIO 1.0.  The CIO 1.0 concentrated on keeping IT running, focusing on internal operations. In this environment, it was challenging for IT leaders to reach beyond the scope of day-to-day IT operations to get involved in other aspects of leading the business. When the CIO 1.0 tried to get connected with the other “chiefs”, he often found it difficult to communicate with anyone besides the CFO and the COO.  And in the case of the CFO and the COO, in many cases one of them was his direct boss. For those CIOs who aspired to connect as peers with the CFO, the COO, and the rest of the “chiefs” to get involved in running the business, many of them struggled. Only a few CIO’s made it into the boardroom…

Getting to the boardroom

How could the CIO 1.0 get into the boardroom in this environment? Not by doing the same old job: keep IT running and saying “no” to commercial projects…

One of the challenges for the CIO 1.0 is that when he was successful (i.e. keeping IT running at a high percentage of availability) it was difficult to showcase the potential to help the business, since a well-running IT function is largely invisible. Then as technology continued to rapidly evolve and data management began to explode, the domain of the CIO 1.0 expanded. The CIO 1.0 had more visibility as these changes profoundly impacted the way the business was run. He (or she) was educated in a “hardware” and “infrastructure” world with more influence on the enterprise: his (or her) systems were running on his servers, in his datacenter. Working in this environment gave the CIO more confidence and in this environment he was able to show his (added) value.

Change is there, again!

Then things started to change again for the CIO. Decentralized IT. Knowledgeable end-users. Many external IT-services suppliers. And worst of all: the Internet.  These organizational and technology advancements disrupted the carefully managed world of the IT organization. The CIO 1.0 tried to regain control by demanding strict rules regarding the use of IT across the enterprise. This worked… for a short while.  At the same time, he had to build a “bridge” between his IT department and the end user (internal customer): business-IT alignment became a top priority.  CIOs started to try to speak the language of business and connect to the end users, but were at the same time confounded by the challenge that IT’s  “internal customers” were now buying IT services through the Internet and exploiting the opportunities now available on the Internet without informing the CIO.

It is not completely fair to say that the CIO 1.0 didn’t (try to) innovate or didn’t lead  challenging IT transformation projects. Some examples that resonated with the C-suite were:

• Virtualization (of servers and desktops) or “doing the same with less, by centralizing and consolidating IT processing”;
• Outsourcing;
• Back-sourcing or cancelling the previous outsourcing.

The CIO 1.0 kept IT running, but still his (internal) customers were not satisfied. Instead of promoting and supporting technology innovation, the CIO 1.0 has become one of the major hurdles in IT transformation.

CIO 2.0: rise!

As these changes to technology and the marketplace continue and accelerate, I believe a new CIO is needed- one focused on business priorities and enterprise value and transformation. But what are the core competencies to enable this CIO 2.0?

Some trends are emerging to answer this question. A renowned head hunter has put the following text on its website:

Given the Chief Information Officer’s (CIO) responsibility for the “central nervous system” of the corporation, filling a CIO vacancy is one of the most critical leadership decisions an enterprise can face. While an acceptable CIO might be able to reliably “keep the lights on”, a world-class CIO will be able to leverage information technology to drive process improvements, cost reductions, actionable competitive intelligence and revenue expansion opportunities. Because of the increased demands for talent, skilled CIOs are continually presented with opportunities, and so even companies currently thoroughly satisfied with their current IT leadership need to have a well thought out approach to CIO succession whether through promotion from within the IT function, rotation of a non-IT executive from the business to bring a user’s perspective to the role or through external recruitment.

It is clear that CIOs need to play a key role in the strategic direction of a company, and in order to do this effectively they need to understand the business and the elements that drive the business. Communication skills are of the utmost importance. For different organizations in different industries, different communication skills apply.  In particular, the CIO 2.0 needs to be able to communicate effectively across the enterprise, and with all of the other “Chiefs” in the C-suite, in business language and from a business perspective. In fact, some companies have now appointed business people (without much technical back ground) as the CIO… These have discovered that technology skills are less important than the skills to understand how the business works and communicate with the rest of the enterprise.

Another indicator of the new business-oriented CIO 2.0 is the set of priorities he or she has. One CIO of a Fortune 50 company that I admired, at one point published his 5 top priorities as:

• aligning business and IT
• integrating the enterprise
• driving long-term revenue growth
• fueling innovation
• developing employee skills

One thing that is most notable is that there is not much technology in this CIO’s priorities… They focus on connecting with the business, increasing competitive advantage, looking for opportunities. In short, the listed priorities show a common factor: transformation!  As I see it, the CIO 2.0 is a transformer- a transformer of the enterprise to a new level of competitive advantage and business success. And on a final note, I would also say that when this new CIO has finished the transformation he should move on to the next role: the CIO 2.0 is not the right person to keep IT running. The CIO 2.0 drives transformation, which drives the business.

CIO 2.0: forget IT, think business!

My closing question to Center members: what are your observations on CIO 2.0? Is your role evolving to business transformation leader?

The Trojan horse outside the walls of Troy had an alluring appeal, but it was the stratagem that allowed the Greeks finally to enter the city of Troy and lead to the capture of the city.

This story is an extreme view point of some IT people on the concept of IT Consumerism. On the other side of the balance it may well be an over-bloated and melodramatic view of this new paradigm shift.

It may be necessary to try and introduce/define the concept to create some context. Generally speaking IT Consumerism refers to the increasing influence that technology experiences of individuals as consumers—both hardware and applications—have on the technology that they expect to use at work.

I would bet that most of CIOs are already experiencing some form of this in their organizations. How many CIOs can still fetter access to internet usage? Or block access to IM and social networks like Facebook, Twitter, etc.?

The reality, however, is that employees already use these technologies as part of their everyday lives. With the pervasiveness of technology and the increasing always-on connectivity of devices and end-points, users come to work expecting the same experience, convenience and flexibility they have elsewhere in their lives. Unfortunately, at work they meet the strong wall of opposition -- namely “IT Governance” -- that spells out what can and cannot be done within the corporate network.

The real challenge is that the enterprise has suddenly lost the monopoly of “cool, cutting-edge, and latest” gadgets as users today now experience the “latest” in terms of innovative technology and applications even before corporate IT can offer it. This is partly due to the conservativeness required to secure the enterprise and also the cost-benefit challenge of multiple needs and demands competing for an ever reducing IT budget. Added to all the mix is the increasing influence on the work-force by the “X-generation folks”, who have never been held back from experimenting with and experiencing technology growing up, and typically take inter-connectivity as given.

What does this mean for enterprises? It means that the influence of consumer technologies on the corporate workspace and the workforce is unavoidable – with implications on enterprise security, employee satisfaction and retention. Gone are the days when IT dictates which technologies the enterprise implements without push back and discussion. Going out the window very quickly is the “veto-power” of IT in making decisions on IT investment. So many users are already marking those technology choices and decisions in their private and personal lives, they cannot understand why they should not have such powers within their companies.

Since this is a trend that we cannot run away from, I would say that the relevant question is how do we leverage it for the advantage of the organization?

For my own view on this, truthfully, I am undecided. I do appreciate that federating IT and empowering users has productivity value, and that ignoring the consumerization of IT trends possess some risk. Benefits to consider include:

• The impact on employee productivity.
• Using social computing to engage customers.
• Integrating social computing with enterprise business processes to unlock new value

But at the same time how do you:

• Ensure you don’t lose control of the enterprise environment and expose the organization to unnecessary risk in the bid to provide user convenience and flexibility?
• Strike a balance between enabling new technologies and securing data?
• Establish clear policies for the use of social networks?

The responses I’m looking forward to getting from this blog are: how would you approach consumerization of IT? And how can you help embrace the trend to help boost productivity and increase your competitiveness and flexibility of your IT organization?

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

Facebook: William A Crowell

LinkedIn: Bill Crowell