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The board expects

Pro

6 January 2012

That well-worn phrase about ‘keeping the lights on’ is well past its sell-by date in concept as well as wording, according to all of the practising CIOs we asked for their insights into their roles and what is expected of them in very different organisations and sectors. Uptime and reliable and quality performance of systems is just a given, so much so that in many respects it is hardly recognised as part of the role and responsibility at all now that ICT in the person of the CIO is up there at leadership level. Sharing the corporate vision and strategy, helping to develop it-and the smart systems to deliver on the shared objectives-and always looking forward is perceived as the key role. It is strategic and not operational.

Tim Buckley started as director of IT in United Drug two years ago and six months later agreed with his board the change to ‘Director of Business Technology and Services’. "That was to reflect the actual emphasis on the business contribution of the role rather than the tech side. I have an agreed set of seven focus areas and priorities, starting with business growth, business efficiency, information for leadership and management and then employee productivity. There are business KPIs for those, similar to those in other areas and functions. After that came the responsibilities for ICT efficiency, enterprise security and what I call ‘data centre and plumbing’ which all carry the standard ICT KPIs."

Wide spread
United Drug today is an Irish multinational which has expanded from pharmaceutical distribution into a healthcare and life sciences service provider that specialises in supply chain, packaging, sales and marketing, medical and regulatory services. It operates in the UK, Western Europe and the USA. "We are currently heading towards 5,000 employees, €2 billion in sales and our declared strategy is to double our size over the next few years," Buckley says.

"We are well into a business transformation programme with a time horizon of five to seven years, working in rolling two-year cycles. A key part of that for me is our SAP implementation just started, which has eight other ICT programmes associated with it. Apart from some of the workers in our warehouse operations, the vast majority of group staff depend on smart ICT for their daily work. In the UK, for example, we have 1,200 reps on the road with laptops as their essential kit."

United Drug is very clear that its business transformation strategy is firmly based on the right technology architecture. The board’s concern is generally about the governance of the ongoing ICT projects, Buckley says, and having confidence in the control of costs and timing as well as realising the benefits. "We do not let IT projects run along and have proven that a couple of times, calling stop when that was the right thing to do. Each project has its own business case, on which it has to deliver, and carries us forward incrementally, within the overall architecture strategy."

Beyond old roles
Buckley believes that all CIOs today-and the actual title does not matter-have to turn away from the old IT role based on servers and comms and technology. "The focus must be on business capability, business services and adding value. That is what your board and your peers want to see. As it happens, I think when you are driving added value capabilities it makes it easier in some ways to adjust the platforms underneath and control costs because you are delivering business value."

Brona Kernan, Irish Times CIO, and formerly Ryanair’s head of IT when it was transforming itself into a web-based giant, reckons the ‘keeping the lights on’ responsibility is still there but actually taken for granted. "After that the priorities and cultures can be very varied, as can the expectations from ICT and the attitudes of people in other business functions. It was very noticeable in Ryanair, for example, that engineering and operations and flight planning worked very well with IT and understood what could, and should, be delivered.

"In general, I’d say that is true of operational people and departments working with IT and of course it’s a two-way thing. With sales and marketing and the soft skills people, on the other hand, there are challenges because they genuinely very often are not sure what exactly they need or want until they’ve tried it. A sales culture allows for trial and error, learn from it and move on. They don’t see that process as failure. IT people do and they do not like to fail!"

Fail cheap, fail quick
On the other hand, Kernan believes, ICT has become more flexible and adoptive. "Cloud, for example, may be a bit over-sold but it does allow a development to fail cheaply and quickly-or to scale when it is successful. Our general strategy is that roll-your-own is past and there are well-proven platforms from which you can build out. The interface with PayPal, just to pick one quick e-commerce example, has been done and most successfully so why would you re-invent it?"

ICT today has become a world of platforms, she says, with ecosystems that offer a huge variety of solutions and elements of solutions. "There are also competitive markets with skilled and experienced developers who can deliver speedily. That is potentially valuable when you are making progress incrementally, trying and testing in smaller chunks before moving on. In any organisation that is a good way to innovate, moving on and changing in increments. Innovation in business is not invention, flashes of inspiration. It is more like making forward progress in small steps and then being able to look back and see how you have actually come."

Kernan believes in selective outsourcing, she says. "That old mantra ‘Do what you do best and outsource the rest’ has a lot of validity except that in IT I think what you are going to retain is the core, critical stuff that a third party is simply not going to care about as much as you do. That links in to the idea that a key element of the CIO’s job is to judge and manage the dependencies, the layers of risk, and to make the best choices.

"So I can see functions and activities like e-mail or Exchange server being commoditised and outsourced to trusted third parties, for example. But the critical functions, in our case the production of the newspaper over several hours six nights a week, are just too important to allow even marginally out of your direct control."

All in all, she says, those are the kinds of things that are expected of the CIO by the business management: clear strategy, good decision making about important choices, delivery to the organisation of the benefits of technology and above all tight control of the risks involved.

ICT backbone
Conor O’Brien is both CIO and COO in Ireland of financial services BPO company Capita, a dual role he previously filled in Irish Permanent. "It works because ICT is simply what our business runs on. As for the view of the CIO and ICT from other managers, I’d say the vast majority across business don’t really want to know except for ‘Why does it all cost so much?! When it is business as usual we are probably invisible but when large projects come around the level of interest rises dramatically."

On the other hand, O’Brien says, innovation is a strong requirement of the job. "We are in a world of outsourcing which is very competitive. We will not win new contracts by doing the same things in the same ways. Clients and prospects are looking for innovative services that will somehow save them money and reduce risk.

"Internally, we do get some curiosity and interest from time to time about devices, especially the newer sexier stuff, not too surprisingly. We do have fairly sophisticated remote access and we are piloting Apple devices, chosen for their better security and stability in our industry. Outsourcing in financial services is very sensitive."

O’Brien feels what his board and colleagues expect from him is really very straightforward. "Solid reliability of stable, secure ICT infrastructure is basic-and as everywhere else it just does not show unless some issue arises. We have a 100% virtualised infrastructure and deployed technology, which means we are solid but can also add and change things readily enough when required. That is the other and more visible expectation. We have to be seen by the market as innovative, go-ahead, superior in technology as in our services. We have a small IT team, and that’s over to us."

Diversification
The Sisk Group has been diversifying for some years while the downturn in Irish construction has led that division into new markets from Poland to the Gulf. "We have three contracts in Poland and two finishing in the UAE and we also had an involvement in the refurbishment of Wembley Stadium," says Sisk head of IT Ken Kennedy. "We also have business in Germany and Belgium, Saudi Arabia and of course Ireland north and south. From an IT infrastructure point of view we are centralised in an Irish data centre with a private cloud and remote access for all users for about a year. Overall we have just over 1,200 IT users, many of them mobile or in various locations temporarily."

The board and the CEOs of the individual businesses expect the CIO to understand how they retain and grow business and to provide the ICT base for whatever they might need or decide in the future. "We have our ICT strategy in place for the next 12 to 24 months, reviewed regularly. I would not like to go much further out. Change happens quickly and we now have a great deal of flexibility in our infrastructure and systems to cope with the unexpected. When they ask ‘Can we do this?’ my colleagues expect Yes, No or ‘not right now and these are the cost and timing parameters.’

"They expect ICT to keep us current and have a good understanding of what might be relevant and make a useful contribution. We are currently looking at BYOD, for instance, and have a unified communications solution about 90% rolled out to give us a single domain with internal presence, instant messaging and potentially a virtual PABX. We see that as investing in communications, not boxes. We are also placing a major focus on information processing and analytics and high quality information for decision makers-you can never have enough BI!"

Above all, Kennedy says, his senior management colleagues expect him to be concerned with business value and marrying technology to the corporate business strategy and its priorities.

Operation officers
In the context of O’Brien’s dual role, a recent Harvard Business Review pointed to a decline in the number of COOs in US corporations in recent times. From a base line in the mid-80s, there is now just 40% of the then total. Highlighting this, Mark Lillie, Deloitte partner and head of IT strategy, says that it points to the broader span of the CIO as technology underpins so much of all business activity. In many organisations, the CIO has effectively become the deputy CEO. But another context that has become relevant in top management is that in roughly that same period since the 80s the average number of executives reporting to the CEO has risen from 4.7 to about 10 today.

"ICT is so important today that everyone in senior management looks to the CIO to provide the corporate business solutions that will enable them to meet what is expected of them. Sales and marketing, for example, are now operating in super-competitive markets where channels to customers have gone from multi-channel to omni-channel. Market segments have to be matched all the way down to the market of one yet they are all looking to decrease the costs of successfully serving their customers."

Divisional interests
The CIO has to be the solution provider across all of the divisional business interests. He or she also has to be completely aware of risk management and may even be the effective chief risk officer if there is no one designated. "The salient point is that today’s CIO is expected to be business-focussed and even customer-focussed. The CIO has to work as a true partner and team member with the C-suite colleagues," Lillie says.

"Most of them will be quite tech-savvy and understand well what technologies are generally being used in their business areas in other organisations, definitely including the competitors, and what advantages can be delivered. In other cases the CIO will be the bridge between people of different levels of understanding and even generations. But they will all look to the CIO to deliver the forward momentum on which their performance and their achievement of business objectives will be realised."

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