Robyn Bennett Vice President, Marketing Programs and Enablement IBM Global Technology Services IBM Corporation
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1 Robyn Bennett Vice President, Marketing Programs and Enablement IBM Global Technology Services
2 IBM C Suite Studies provide insight and context into the mindset of senior decision makers. Over 5,300 Face to Face Interviews Conducted Inaugural Global CIO Study 2009 Released September 2009 Global CFO Study 2010 Released March 2010 Global CEO Study 2010 Released May 2010
3 In the largest known sample of face-to-face interviews, we spoke with CIOs to understand their goals and challenges Between January and April 2009, IBM conducted 2,598 face-to-face interviews with CIOs Represents different sizes of organizations in 78 countries and 19 industries Analysis incorporates Profit before Tax (PBT) growth data, relative to peers in their industries, to associate CIO organizations with one of three growth levels: High, Medium or Low. Context (Low-growth v. High-growth) reflects environment in which CIO operates Geography Sector Organization Size Rapidly Developing Markets 32% Western Europe 38% Communications 11% Public 18% Others 2% Distribution 24% >10,000 Employees 34% <1,000 Employees 16% 3 Japan 6% North America 24% Financial Services 21% Industrial 24% 1,000-10,000 Employees 50%
4 Our analysis provided insights into how CIOs can make the biggest impact on behalf of the entire organization CIOs are much more actively engaged in: Setting strategy Enabling business flexibility and change Solving business problems, not just IT problems CIOs spend an impressive 55% of their time on activities that spur innovation: Generating buy-in for innovative plans Implementing new technologies Managing non-technological issues However, CIOs universally acknowledge that some of their most important objectives sometimes seem to clash How can we support the introduction of new services while avoiding the disruption of existing services? How can I reduce costs while improving services? How will I balance the need to influence business strategy with the need to provide top-notch IT support? 4
5 Successful CIOs blend three pairs of roles that seem contradictory, but are actually complementary Insightful Visionary Savvy Value Creator Collaborative Business Leader Making Innovation real Raising the ROI of IT Expanding business impact Able Pragmatist Relentless Cost Cutter Inspiring IT Manager 5
6 Making innovation real Insightful Visionary and Able Pragmatist Innovation should be based on practical technology that can deliver business objectives within reasonable time and cost, which can be absorbed by the business. Life insurance CIO, India 6
7 As Insightful Visionaries, CIOs are active members of the strategic team Visionary CIOs recognize that successful innovation requires deep involvement with the business For us, innovation means generating 64% diverse ideas to address a particular need. +94% Then we distill them into an actionable plan 33% that results in business improvement. Energy and Utilities CIO, United States High-growth CIOs reach out much more to the business to co-create and champion innovation +40% 48% 67% The CEO s message to the board is that IT is necessary to be better as a company. Insurance CIO, Mexico... and are more often members of the most senior management team +35% 62% 46% Source: IBM Global CIO Study 2009; n = 2598 Low growth High growth 7
8 Innovation is not limited to IT solutions: Business-oriented plans rank high among CIOs visions of enhancing competitiveness Ten most important visionary plan elements Interviewed CIOs could select as many as they wanted Business Intelligence and Analytics Virtualization Risk Management and Compliance Mobility Solutions 80% 77% 76% 73% 70% 71% 66% 86% Customer and Partner Collaboration Self-Service Portals 64% 63% 71% 73% Application Harmonization 67% 62% Business Process Management 61% 70% SOA/Web Services 55% 68% Unified Communication 57% 63% Source: IBM Global CIO Study 2009; n = 2345 Low growth High growth 8
9 As Able Pragmatists, CIOs make it possible to bring innovative plans to life while "keeping the engines humming" High-growth CIOs are expected to spend more time to enable the business and corporate vision Business and corporate vision enabler +87% 28% 28% Core Technology services provider 23% -42% 15% 40% High-growth CIOs actively use collaboration and partnering technologies +60% 33% 53% IT Organization 22% Source: IBM Global CIO Study 2009; n = % 41% Entire Organization and use third party business or IT services more often to improve their business agility Like many other companies, we are always 56% exploring the possibility of +22% utilizing external entities to help manage the day-to-day 46% IT operations so that, internally, we can focus on more strategic initiatives. Kurt Rao, Time Warner Inc. Low growth High growth 9
10 Client Perspective: John Clarke, Senior VP & CIO, Nokia Providing Insight to the Business" 10
11 Raising the ROI of IT Savvy Value Creator and Relentless Cost Cutter We do recognize the strategic advantage of using data to support improved decision making this is a key plank of our strategy going forward. Consumer Products CIO, Ireland 11
12 As Savvy Value Creators, CIOs are skilled customer advocates that create value by truly understanding what customers want High-growth CIOs proactively craft data into actionable information 36% 58% +61% Having a strong data governance model that allows for a single view of the truth through accurate data is a strategic imperative. Financial markets CIO, United States In five years, CIOs expect endcustomers to continuously explore new channels and anticipate much greater levels of integration and transparency with customers +37% +55% 54% 74% 68% 44% Source: IBM Global CIO Study 2009; n = 2598 Low growth High growth 12
13 As Relentless Cost Cutters, CIOs are perpetual seekers of savings who reduce costs through infrastructure and process standardization Across our entire sample, CIOs spend about 14% of their time to take costs out of the ongoing technology environment Of the 60 or so hours per week, some 9 hours are spent cutting costs The balance between new projects and cost control is the dichotomy of my life. Retail CIO, United States Many CIOs foresee a strongly centralized infrastructure in five years and think business processes will be completely standardized and low cost 76% 76% 50% 61% +22% Expectations have changed. It is about delivering a service through a simple process that can be repeated. CIO, United Kingdom Source: IBM Global CIO Study 2009; n = 2598 Low growth High growth 13
14 Client Perspective: Donagh Herlihy, Senior VP & CIO, Avon Using information to Solve Business Problems " 14
15 Expanding business impact Collaborative Business Leader and Inspiring IT Manager IT is now seen as a key enabler to business goals and mission, and is engaged in delivering business strategy. Managing with defined goals and intent makes it easier for IT to align to business needs. Chris Ferguson, CIO, Elders Rural Services 15
16 As Collaborative Business Leaders, CIOs are true partners with other executives, jointly defining better business models CIOs in high growth organizations more often receive high marks from their senior management team High or very high score by the entire senior management team for technology s contribution to the business 53% 78% +47% High-growth CIOs are more closely involved in co-creating the business strategy with their fellow business leaders Create business strategy as member of the team 61% 74% +21% Present business strategy jointly with others on the senior management team 53% 66% +25% Decide on business strategy as a member of the most senior management team 46% 62% +35% Source: IBM Global CIO Study 2009; n = 2598 Low growth High growth 16
17 As Inspiring IT Managers, CIOs are consummate IT experts who foster IT expertise to extract and preserve critical business data High-growth CIOs create IT centers of excellence to help realize business and technology innovation We have centers of excellence 44% for ERP and business +69% applications, collaboration and 26% security - some are more formal than others." Government CIO High-growth CIOs do more to improve users access to data, as well as its quality +31% -67% Data is readily available for relevant users -51% Data is reliable and secure 66% 81% +23% Source: IBM Global CIO Study 2009; n = Low growth High growth
18 Client Perspective: Tom Greene, CIO, Colgate-Palmolive Providing Information in Time to Make a Difference" 18
19 Tuning to context A CIO s Reality 19
20 The most effective CIOs consider the full range of possible influences when evaluating how each pair of roles should be prioritized Macroeconomic factors Regional conditions Industry characteristics Organizational influences Personal aspirations Stay abreast of market forces Pay attention to geographical and regional particulars Know the availability of industry-specific skills Understand how customer expectations are changing Know where competitive threats exist Understand how customer relationships are evolving Understand the organization structure and culture Evaluate the overall business and IT situation Request input from end users and IT colleagues to identify areas of strength, as well as improvement opportunities 20
21 Despite multiple forces in play, our findings show that CIOs are focusing on what matters most for them and their organizations CIOs acknowledged the constant tension of integrating actions that sometimes seem oppositional Over time, we expect CIOs to regularly assess how much emphasis is appropriate on each of the three pairs of roles in order to make innovation real, raise the ROI of IT and expand business impact Continue the conversation at ibm.com/voiceofthecio 21
22 Questions 22
23 Additional information For more information related to the IBM Global CIO Study, visit ibm.com/voiceofthecio Read industry and regional CIO perspectives on the IBM Global CIO Study's insights Watch respected CIOs from around the global share their lessons learned as they relate to the study results Take the CIO Study questionnaire yourself and see how your results compare to those of the IBM Global CIO Study For other details on CIO strategies and insights, visit ibm.com/cio 23
24 IBM Institute for Business Value The IBM Global CIO study is part of our C-Suite series 2004 Study 2006 Study 2008 Study 2010 Study CEO Studies Total Interviews: 456 Total Interviews: 765 Face-to-Face: Study 2005 Study Total Interviews: 1130 Face-to-Face: Study Total Interviews: 1564 Face-to-Face: Study 2009 Study CFO Studies CIO Studies Total Interviews: 450 Face-to-Face: 450 Total Interviews: 889 Face-to-Face: 267 Total Interviews: 1230 Face-to-Face: 619 Total Interviews: 1917 Face-to-Face: 1485 Total Interviews: 2598 Face-to-Face: Study 2007 Study 2009 Study CHRO Studies CSCO Studies Total Interviews: 320 Face-to-Face: 320 Total Interviews: 404 Face-to-Face: 337 Total Interviews: 393 Face-to-Face:
25 How do the priorities of the CEO, CFO and CIO align to address uncertainty and complexity? CIO Study CFO Study CEO Study Raising the ROI of IT Enterprise Cost Reduction Build Operating Dexterity Aims for completely standardized, low-cost business processes Foresees a centralized infrastructure Focuses relentlessly on taking costs out of ongoing technology environment Standardizes processes Enterprise-wide Shared Services / COEs or Outsourcing Adoption Rationalizes and standardizes analytical technologies Improves asset utilization Simplify operations and products to better manage complexity Use iterative strategies, make quick decisions and execute with speed Integrate globally, increase cost variability and exploit partnering to increase agility Expanding Business Impact Drive Information Integration Reinvent Customer Relationships Proactively crafts data into information Adds value by proactively suggesting better ways to use data Does more to improve users access to data, as well as its quality Knows that end-customers expect no less than world class integration and transparency Uses different approaches to help the enterprise make decisions Improves information delivery Drives data integrity Getting closer to customers is the single most important theme in the organization Better understand customer needs through collaboration and information sharing Exploit the information explosion to deliver unprecedented customer service Making Innovation Real Manage Risks Embody Creative Leadership Truly integrates business and IT to innovate Proactively reaches out to the business to cocreate and champion innovation Has a clear view of the top technological priorities that will enhance competitiveness Does practical things to help enable the business and corporate vision, as business leaders expect Combines insights from operational and financial data with external factors to better navigate uncertainty Drives risk management through CFO direct reports of Controls and Risk Management Improves compliance on security and privacy Creativity is #1 leadership quality Drive change in the organization to stay ahead of market and use of wide range of communication styles and tools Break with status quo of industry, enterprise and revenue models
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