The CIO in 2012The End or a New Beginning?

TASSCC State of the State November 18, 2011

Richard TaggartPartner, SHI

WWW.SHICLOUD.COM

The Life of a CIO….

CEO: "In this job we need someone who is responsible."

CIO: "I'm the one you want. On my last job, every time anything went wrong, they said I was responsible."

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The debate begins….

“As IT (Information Technology) becomes cheaper and more standardized, as its power and capabilities begin to outstrip most companies’ needs, the advantages it once provided are dissipating, and its great transformational power is starting to fade…..History reveals that IT needs to become ordinary – needs to lose its strategic importance as a differentiator of companies – if it is to fulfill its potential.”

Mr. Carr’s Conclusion: Spend Less Follow, Don‘t Lead Innovate When Risks are Low Focus more on Vulnerabilities that Opportunities

From: Does IT Matter? Nicholas Carr, 2004

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The debate intensifies….

“In the long run, the IT department is unlikely to survive, at least not in its familiar form. It will have little left to do once the bulk of the business computing shifts out of the private data centers and into “the cloud”. Business units and even individual employees will be able to control the processing of information directly, without the need for legions of technical specialists.”

The Big Switch, Nicholas Carr, 2008“The Most influential book on Cloud”, Christian Science Monitor

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Resulting in…..

• “As IT roles migrate to business services, evolve into business roles, or are externalized, the scope of the IT function will diminish and its headcount [will] fall by 75% or more.”

- The Future of IT, Corporate Executive Board

• The “material trend that will most dramatically impact the shape and deployment of the IT workforce is cloud labor. The labor component of IT will be virtualized, just as servers, storage and desktops have been. “

-The shape of the IT workforce in 2020, Thorton May

• “Computer programmers go the way of the typing pool.”- IT Careers in 2020 – Cloudy Days Ahead, Julia King

Question of the day…..Will the role of the CIO be reduced to head of information supplier management, overseeing a small team orchestrating (largely non-differentiating) externally obtained services?

Will Computer programmers go the way of the typing pool?

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Wither Software Jobs?

“Overall, employment of computer software engineers and computer programmers is projected to increase by 21 percent from 2008 to 2018, much faster than the average for all occupations. This will be the result of rapid growth among computer software engineers, as employment of computer programmers is expected to decline.”

-Bureau of Labor Statistics

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National Academy of EngineersGrant Challenges requiring software engineers:• Advanced Health Informatics• Individualized and Personalized Learning• New software tools for Advancing Basic Science• Virtual Reality• Secure Cyberspace• Reverse Engineer the Brain• Smart Cars• Advanced Robotics• The Data Deluge• Smart Bodies

Have We Invented Everything That Needs to be Invented?

(Courtesy Ignatios Vakalis, Chair Computer Science, California Polytechnic University)

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Conclusion:

• Software is the core of many innovations, and necessary to nearly all• Hyper competition will cause businesses and business models to continue

to evolve• The focus in “Information Technology” will move from:

Information Technology to Information Technology

• Quality Information will be a strategic differentiator• The CIO becomes the Chief Innovation Officer!• I.T.’s Best Years are Ahead!

Adapting to Change

Business Tested Ideas for Thriving

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Check your current Value Proposition

• How is your staff really spending its time?• What projects are adding business value?• Is there a fire hose of activity, but a trickle of

value?

I.T. “Tasks” Laundry List

Evaluate your current Services Offerings

• Are your IT Services (Catalog or other) clear to the Business?• Does every stakeholder know how to obtain IT Services?• Is there a relief valve (an informed human being!) should all

else fail?• Find and Fill Services Gaps that Drive Satisfaction

Calendaring and Meeting Management (of all things!) Personalized Device Helpdesk

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Review your current Funding Model

• How transparent are your IT Costs?• How can the business adjust their IT Costs?• Who holds which pieces of the Technology

Budget? 10%

5%

15%

70%

Budget

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Strengthen Governance

• Is your governance model empowering or a logjam?

• Are decisions made at the right level and with the right leadership? With transparency of process and decisions?

• Are you promoting the right organizational behaviors?

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Business Rule

DifferentiateSegment IT

LeverageEnterprise and

Segment IT

OptimizeEnterprise IT

MandatoryEnterprise IT

Topics BU/Segment Infrastructure

Vertical Applications (Front of House

IT Best Practices Financial Planning Enterprise Infrastructure Horizontal Applications

(Back of House) Architecture Disaster Recovery Strategic Sourcing

Security Network Sarbanes-Oxley

compliance Other Compliance (e.g.,

legal, records retention, etc.)

Initiatives Financial Planning & Management

HR Protocol Architecture & Standards

Declaration & Deployment

Applications Strategy MTB Engagement Model Strategic Sourcing

Governance Bodies

Segment/Business Unit

IT Leadership IT subcommittees

Enterprise Services IT Leadership

Enterprise Services

Degrees of Freedom

3 2 1 0

Clarify Decision Rights

Ensure coverage of New Value Areas

• How well are you supporting:• Agency Mission?• Programs and Services?• Constituents?• Accountability?

• What percentage is spent on Administrative systems versusDriving New Value?

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Agency Mission

Do you have a Digital Platform?

• Do you have or are you building a strategic digital platform to mechanize your most important business processes?

• Are you fully leveraging it?• Is it achieving the required business agility?• How many of your systems are Assets versus Liabilities?

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Platform Leverage Agility

Consider Process Information Officers

When there is a need to create an end to end digital platform within a major functional area:

• Recruit proven, high level IT executives to reshape critical processes.

• Harmonize processes, lay the foundation for strategic systems platforms

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Process Strategy Performance

Are you Measuring and Communicating?

• Producing Periodic “State of IT Reports”?• Specific to organization, but consider including metrics on:

Operational Excellence Business Performance Talented Staff Innovation Collaboration Creating Assets (Reuse of the digital platform)

• Watch out for Unintended Consequences!

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Do you have a strong Innovation Team?

• Could be CTO and team or similar.• Give them freedom to experiment with technology to

enhance business success, liberated from day to day operational concerns.

• A good measure of success is percentage of total projects undertaken that make it to production somewhere in the enterprise. (Patents developed are a good measure too!)

• OK to have multiple Innovation Teams!

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Are you Rethinking Outsourcing?

• Majority of CIOs dissatisfied with current outsourced arrangements

• Consider shortening agreements• Consider multi-sourcing and out-tasking• Consider cloud based services and alternatives

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Are you leading in the use of Cloud?

• IAAS incorporates strong technology standardization and massive economies of scale

• PAAS can provide rapid deployment of development environments

• SAAS can be appropriate for selected business functions• Private Cloud can reduce or eliminate data / security concerns

and modernize your data center• See WWW.SHICLOUD.COM

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Summary

• Innovation in software is primary to innovation in the world’s competitive economy

• After the first 50 years, IT is shifting gears from first to second, from “Information Technology” to “Information Technology”

• While no one knows the future, you can shape it. • Adopt the best from the some of the most successful

CIO’sBecome a Chief Innovation Officer!

Checklist for 2012

Discover or re-discover what tasks your staff is really doing Evaluate your IT services model Review every year your funding model Strengthen Governance Clarify Decision Rights (and re-clarify with organizational change) Provide superb IT coverage to Marketing, Sales, R&D and other Revenue generators Consider hiring a Business Technology Partner as your turn around specialist Ensure you are leveraging or are building a digital platform for the most critical business

functions Consider developing a PIO Function(s) as catalyst to process and digital platform

engineering Build or re-energize an Innovation Center Measure (wisely, remember unintended consequences!) and Communicate Often Re-visit Outsourcing Contracts Early Lead in Cloud Leverage and Use Call SHI!

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Interesting Reading!

The Innovator’s Dilemma, by Clayton ChristensenThe Innovator’s Solution, by Clayton ChristensenIT Governance, by Peter WeillIT Savvy, by Peter WeillBlue Ocean Strategy, by W. Chan KimThe Singularity is Near, by Ray Kurzweil

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Thank You!

Richard TaggartPartner

Richard_Taggart@SHI.comWWW.SHICLOUD.COM

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