Roundtable Participants:
- Andrew Woyzbun, VP Corporate Services and CIO, C1 Communications Inc.Gale Blank, VP Information Services and CIO, The T. Eaton CompanyMark Saunders, CIO, Nesbitt BurnsPeter Watkins, CIO, Canadian Imperial Bank of CommerceGeoff Relph (moderator), Executive Director, Business Development, DMC Inc.David Poirier, Executive VP and CIO, Hudson’s Bay CompanyJim Reynolds, Senior VP and CIO, Cott CorporationDon Parker, Executive VP and CIO, Manulife Financial
RELPH:As CIO, what do you consider to be the highest value activity that you perform for your corporation? Do you spend enough of your time doing it, and if not, what prevents you?
PARKER: If I took the executive or board approach I’m sure Y2K would be the highest value activity right now. Personally, I think my greatest value is in seeing that we attain higher levels of IT competence across the organization. And I’m really more concerned about the competence outside of the IS organization, as opposed to inside, where I have control. You have to be in a leadership role to try to raise the bar in terms of competence out there in the line organization, and it’s very hard to spend enough time on it. People have to see you as having that role, and be willing to accept leadership from you. The light is only starting to come on that IS isn’t simply those folks running the networks. The biggest obstacle in spending enough time on this activity is recognition of its importance in the broader community of a large organization.
BLANK: What the CIO does that is uniquely important for a corporation is integrate technology in business to create outcomes that add value to the bottom line. If there is a skill that you have to bring to the table, it’s as the translator or the Rosetta stone between technology and business. We are the people uniquely bringing that to the executive suite. When we sit at the executive table, what we bring to the conversation is really process, technology, and integration between the two. That’s where I view my unique value. Do I have enough time to do it? It’s the context in which I work. I can’t think of an instant when I’m not doing that, even when the network is dying, because my thinking is, if the network isn’t working I am not going to have the credibility to sit at the table.
WATKINS: From a tactical point of view, the CIO has three primary responsibilities. One is strategy – ensuring that the business units are in a position to speedily respond to a future environment that is being transformed by technology. The second is governance of the enterprise in terms of technology expenditures – getting full value for the money you are spending. The third is management of the technology risk. Two other areas that encapsulate the responsibilities of the CIO are the enterprise infrastructure, and enterprise-wide knowledge which no business unit would naturally take responsibility for putting in place. So the CIO’s focus is strategy, governance, risk, infrastructure, and knowledge. In terms of getting enough time to spend on those things, I’m getting the board and the management committee to accept that those are the mandated responsibilities of the CIO – that’s the first step. Then a negotiated dialogue takes place around how you structure the activities around those things to produce results.
SAUNDERS: In my view the most important CIO activity is working closely with the business leaders to ensure that technology achieves its value proposition by supporting their business and business strategies, and therefore ultimately supporting the bottom-line profitability of the corporation. It’s a double-edged sword, though, because we all have the challenge of trying to manage the day to day operations, while at the same time trying to manage the strategic things. It doesn’t matter how good the new ideas and strategies are – from a user’s point of view, if the technology on his or her desk isn’t working when they arrive in the morning, obviously I have a problem. So we have to find a balance between the day to day concerns and the strategic.
WOYZBUN: It seems to me that the key thing we do as CIOs that can’t be done by anyone else at the management table is make decisions around which technologies we are going to pursue and deploy. There is no shortage of folks out there with potential solutions, but the hard part is to make the right choices. We can have all sorts of staff and advisors but ultimately the buck stops with us. In response to the question as to whether or not I’ve had enough time to do that, the answer is no. I wonder if in fact it is possible to encapsulate in one organizational structure this whole spectrum of innovation at one end and the day to day at the other. Can one individual find the appropriate balance between those activities?
RELPH:At a time when technology is emerging as such an important part of the organization, is there an opportunity for the CIO to assume the role of Chief Innovation Officer to drive change, innovation and transformation? Does this idea have merit?
POIRIER: I don’t think CIOs are on a natural path to inherit the title of chief change agent for the organization. The opportunity is there, but many other functions within the business can assume that role as well. It really depends on the skills of the individual as to how he or she can effect change in a broad way across all of the critical elements of the business – elements such as organizational alignment, operations management, and investment strategy. CIOs are in an excellent position to be able to manage and contribute to those elements and keep the organization focused on integrating them.
WATKINS: The future is evolving in a fashion that’s reasonably definable – faster than we are evolving our organizations internally. In 18 months, without any focus on the Canadian market, Amazon.com has become the third largest book retailer in Canada. So what we are seeing happen in the digital marketplace is a mass consolidation around a few suppliers. If you look at the way the world is very quickly evolving and relate that to our role in the organization, our challenge is less about being an innovator and more about how we craft strategies to win and play in a marketplace that is becoming very well defined. This is particularly true in the digital marketplace, where strategies around mass of scale and speed to market are the key success drivers. Internally, we need to organize the capability to deliver that.
REYNOLDS: My interpretation of innovation is: can you do something in an organization better than anybody has done before in a way that creates better customer service and a stronger competitive position for the organization? Part of the challenge is how you come across when you walk into the executive management meetings. Are you seen as an information technologist or a business person first? We have to come in as business people whose area of expertise is in the technology field – that’s the key thing. If you want to help innovate or create sustainable differences in the organization, that’s where the role of the CIO has to migrate. If you are going to have an influence, you have to compete inside the organization for that role. You have to bring part of the resources that you have responsibility for into the equation in a way that helps the sales organization be successful, or the manufacturing organization improve supply chain efficiencies.
SAUNDERS: I don’t think that one individual with the grandiose title of Chief Innovation Officer can actually fulfill that role – it would be yet another example of ‘mission impossible’. However, I do think that the CIO has a responsibility as a member of the executive team to be a thought leader in terms of working in partnership with business colleagues around what’s possible. From a technology standpoint we have the expertise to be able to say, “This is not possible now because it’s not mature enough – it’s too bleeding edge – so let’s not go there just yet.” We can also act as the broker to help bring solutions together, perhaps by means of strategic alliances with other companies. Those are the kinds of innovative ways in which the CIO can add value to the organization.
PARKER: I don’t think as a CIO that I own technology or information in the corporation and I certainly don’t own innovation. What I do own is seeing that the organization has the competencies it needs in order to use technology well, manage information well, and innovate well. When the fellow running the Canadian division tells me about a new product he is going to introduce, and I can see that it’s got back-office technology issues, mid-office issues, and it stretches us way outside of our people or technology capability, my job is not to say no. My job to help him innovate around that as rapidly as he can – share that risk with him in terms of making it happen. In that case, he owns the title Chief Innovation Officer and I own the title Chief Enablement Officer.
RELPH:As we move towards the future, what barriers does the CIO face in fulfilling his or her role in the organization?
BLANK: The first thing the CIO must do is create credibility. There are a couple of things that you have to be credible on. You have to effectively run the hygiene stuff – keep the business support things running – and at the same time you have to establish your credibility sitting at the table with the rest of the executives. You have to create a sense of trust that if you say that this is the right way to go, people believe you – you can speak their language. I think the barriers for the CIO at the executive table are the same as they are for any other executive – you’ve got to have a good ROI. The only difference is that we are new to the table. Some industries are still archaic and treat IT merely as a cost centre – just go away and reduce your budget. It’s the CIO’s role to change that.
REYNOLDS: The CIO establishes his or her credibility in the organization by taking on some challenge, executing it and teaming up. You can’t establish credibility just by doing a good job of implementing a network. You must team up with one of the user community groups. You have to get involved, be part of the business unit. Sometimes you have to ask for inclusion. People just don’t think about including IT in a lot of discussions so you have to be out there. In order to do that, you have to manage your time well and really be organized. I find that if you can build a strong flexible infrastructure and delegate it to good competent managers that frees you up from the day to day activities.
POIRIER: Just as the business’s functional silos are evolving into process management, the information services ‘silo’ is becoming more integrated in the business and the responsibility is shifting to managing IT within our organization rather than managing the IS function. The latter is still a component of it, but a much bigger challenge is to manage the IT set of activities within the organization. So the role of IT has certainly changed as everybody begins to recognize how critical it is in accomplishing the enterprise’s goals. The challenge we face is that we have to stay not just at the 40,000 foot strategic level of conceptualizing the ultimate organization or marketplace, we also have to be able to get right down to the ground and talk about practical applications and create alignment amongst all of the business’s functions in a very practical form.
SAUNDERS: One of the challenges we face is that we end up with more projects and more work than we can possibly deliver. Money is not the issue. The issue is actually making it happen – being able to deliver, and to keep any number of balls in the air at the same time. How much capacity does the IT organization have to be able to parallel process everything that’s coming at it? That’s a real challenge. And one of the strategies we’re employing to deal with it is using externally sourced workers when we need specialized skill sets. You have to be able to bring in the right people at the right time for the right project because you don’t always have those people in your own shop.
WOYZBUN: With the technological change that’s going on, it’s probably easier to get a higher quality of technical solution outside your organization than trying to create it internally. So you have to become quite effective at choosing and managing your external partners and developing the kind of relationships with them where you get value for the money and your partners are open about the opportunities, risks and problems they are running into. So I think that the IT organization of the future is one that consists primarily of people who are bridge builders – who don’t get their jollies by being the technologists who developed the system – who are quite prepared not to build it here necessarily but to put together the different pieces that are available in the marketplace. So the IT organization must become an effective set of brokers between the business and the outside.
WATKINS: As you look at the way things are going to be in the future, you have to engineer the organization, including the IT organization, to map to the future. For example, 75 per cent of our technology expenditure deals with sustaining our current infrastructure and operations, and 25 per cent goes to creating new value in the organization. For us to succeed in the future, we have to spend 75 per cent of our technology expenditure on bringing value to the organization and 25 per cent on sustaining. So consistent with that theme, you’re driven to structure ways of supporting the lines of the business that allow the organization to map its future.
RELPH:How is the IT organization changing? Will it look the same in the future as it does now?
PARKER: think the definition of what your job is, for all people inside IS, is changing quite radically. For example, we’re continuing to change the way we define and measure performance, and the way we incent performance internally. That’s a big change in IS organizations: getting away from complacency and constantly raising the performance bar. At Manulife we’ve introduced various customer satisfaction surveys, and we’re compensating people on their customer satisfaction in many different ways. That kind of change is very much on all our plates.
BLANK: One of the things that’s absolutely important for the people in my IT organization to understand is that their responsibility is to our shareholders. It’s a real struggle because customer satisfaction is something that they have been trained on and it’s absolutely essential in a resource-constrained environment to be able to just say no. It takes a huge education of the staff to understand the value proposition that the business has with it’s shareholders and it’s customers – being able to understand that that fourteenth thing for Finance should come below the store operations person in Vancouver whose POS terminal is down.
REYNOLDS: I think we need to make IT staff more into business agents or business partners with the users. They should have the ability to get out of the computer room or the programming environment and go out and talk to the people in the business community. I’ve found for some our IT managers that taking a few business awareness courses is valuable. Those types of things help them really appreciate what’s going on in the departments. You’ve not only got to be strong technically, but you’ve also got to start to grow in your interpersonal and business skills.
WOYZBUN: I think we’ve got to move away from the model of the ‘man for all seasons’ systems professional who understands technology, understands the business, understands project management and has wonderful people management skills. We really need to zero in on a high level of competency in particular areas and recognize that those people may in fact be rather one-sided. The true project manager is a relatively rare commodity. We have to look at what skills we need to be extremely good at internally in order to fulfill our responsibilities and maintain our credibility with our management team. We are going to have to get people who are better and better at less and less.
WATKINS: The skill sets of the external environment have improved dramatically. In many cases external providers have outstripped the capabilities of the internal organization to match them. So if you give your business units the ownership and enable them to make the technology choices that are in their best interest, the internal capability must match or exceed the capabilities of the external market. Which means that the IT organization has to focus on its core competency – things it can do more effectively than the external markets to add value. So the drive towards professional quality has to escalate dramatically within internal organizations, or else they will be diminishing shareholder value in the company.
POIRIER: Rather than a linear trajectory towards centralization or decentralization and autonomy or synchronicity of decision-making, I think we’ll see these management aspects having a far more cyclical nature. We’ll see cycles of outsourcing things, followed by bringing products and services in-house. I don’t think that it’s going to rest in any one place over the next five years. It’s going to continue to evolve, and it will evolve differently according to industry. In the retail sector, for example, we are considerably behind what the financial sectors are going through right now, so we’ll use them as a model of what to do and what not to do.
I subscribe to the school that says there is no competitive advantage any more. We might come out with something before our competitors but it will likely be only a couple of months, or even weeks or days, before they have something similar. Everybody can make the same things happen. So what we are all doing is peddling like mad to stay in the same place because we are not actually getting ahead of the next guy. We’re on that stationary bike going like hell. We are all off trying to innovate but it’s a tough game. Keep peddling.
CIO Canada would like to thank Geoff Relph, DMC Inc., and Benchmark Communications for their assistance in hosting this CIO roundtable.