The contribution of information technology to business strategy has become too important. At the recent Canadian Information Processing Society’s Informatics conference in Victoria, Computing Canada editorial director Martin Slofstra moderated a panel consisting of five CEOs and CIOs from the Victoria area. The consensus: A good strong relationship between the CIO and CEO is an essential first step to staying competitive. And to continue to be successful, a CIO must strive to build and maintain relationships with those in the business units.
Computing Canada: Please talk about your relationship with your CEOs and CIOs.
Rick Pura: When we started, we didn’t have distinctions like CEOs and CIOs. We had a chief cook and bottle washer, and if we had to do things like laying a carpet in the new office, we did that too. Now I think that is one of the best things that we could have had because one of the things we see happening in the industry is less compartmentalization all the time.
The CIO is not the member of the team with a thick set of glasses on, sitting in a separate room. (CIOs are) just as much or more a member of the executive team in that their decisions will affect not just what your company does but what it will be capable of doing.
Peter Gustavson: We were falling behind in our technology and I could see we weren’t processing transactions fast enough. I asked a friend what I should do? He said, “You are running on something called FoxPro and what you really need is a CIO, somebody with the skill sets to take your business plans, look at them and ask what kind of infrastructure you need.”
Eugene Nizker: I absolutely agree that the CIO is a very important part of the senior executive team. And one of the things I have been saying is, “You know guys, if you still need to convince your CEO that you need to be at this level, then you should update your resumés because your company won’t be around that long anyway.” If business leaders don’t understand the place of technology today, their company is doomed.
Jacques Van Campen: Interestingly enough, we started out as exactly the same thing that Rick (Pura) described. In the early days, you did whatever job came to you. Over time, the roles become more structured in nature and more siloed.
Jordan Dagg: I agree. Be a business manager first and then technology can fit in from there.
CC: Each of your companies seem to have good strong rapport at the CEO/CIO level, how do you get this to trickle down to your user and IT folks where in many cases the relationship tends to be adversarial?
RP: You would have an adversarial relationship because the IT department wanted more money to do it faster and the rest of the company is saying, “What do we need that for in the first place?” My business would not have existed without IT in the first place so you get integration by default. You get the spirit of cooperation today because the problems are different. It’s not just about how to do it faster, it’s also about how to do it differently. I think what a lot of people don’t do on either side is a cost-benefit even if it is a simple mental calculation. A lot of people seem to instinctively avoid that but it helps to lay it out and when you do that, most people will agree.
JVC: I think shared goals are incredibly important and the common language we used for shared goals is profitability and the organization . . . The technology is not the first piece, it is the last piece.
PG: My advice to you is that your job is not only to manage the IT department, it is also to be a great communicator to the operations side of the business.
EN: One of the first things we established was IT governance, a steering committee with all senior executives participating in it. When it comes to making strategic IT decisions, and the shuffling of IT projects in our portfolio, that is the committee that makes the decisions. It is not IT that prioritizes and it is not IT that pushes its own agenda.
CC: This brings us to the ownership question, and in some places, this is a big one. Who ultimately is responsible for these systems, IT or the business unit, and how is accountability put into place?
EN: In our organization, IT is in charge of all the systems and infrastructure but when it comes to IT projects, these are all mutual projects with business. We work very closely with our internal users on all major projects, not always as close as we like to, but we have to appreciate there are other challenges.
There are a few qualities we look for in the business person, they have to be passionate about the project. They have to have the time to communicate and they have to have a certain weight and authority in the company so that other parts of the company trust (that person).
JVC: I certainly agree . . . that the systems and the tools are the purvey of IT. But there is really no line in the sand that I can clearly cast because we operate in a very fluid system. I look at it as a federal- provincial system with push and pull, if you will. There are many things that are done well at a federal level and that is where IT comes in. Those things are done well at a core level. However, some of the sub-functions are done better at a provincial level because they are nimble and there is good control locally. Our ERP and CRM systems are federal, for example. At the provincial level, you may want to define that as quality. Manufacturing has their own systems so that might be provincial. Ownership is defined depending on what makes sense.
CC: CIOs, do you have metrics in place that you can use to measure the service you provide to your business users, and CEOs, do you hold your CIOs accountable to these standards?
EN: I am hesitant to talk about it because I am quite skeptical when it comes to IT metrics. There are lots of metrics around, we know that, but are they applicable especially when your organization is so dynamic and nimble. Therefore we use a few, what I would say, are subjective measures. We poll our users from time to time, we listen to their complaints, we log their complaints, but I wouldn’t say we are very formal in this way. I’ve been in IT since 1975 and I have seen a few generations of metrics and all of them have failed one after another.
JD: I’ve struggled with metrics and what to put out there – not because there are no good metrics to use. The struggle is that if you are going to go with metrics, that is the goal for the business because those people will concentrate on that metric. You need to put a lot of thought into those metrics and it is not just server uptime. I agree that the CEO is going to want metrics, you have to have some way of measuring a department. I do agree that something needs to be in place but I think it has to be right for your organization, and it has to make sense to your people, or they will lose sight of the business.
PG: Probably one of the hardest things for non-IT people to do is to measure the effectiveness of their IT department and their IT investment. And it is a constant challenge. We set a strategic direction, and write business plans, and milestones are set within that but we are quite entrepreneurial and it’s very dynamic. So to say that you are rewarding some milestone that was set way back in January when it is now June. What we try to do now, and this is an initiative that Eugene is involved in, is get some outside expertise and just ask the question: “Are we being effective and efficient with our IT?” These are very general questions, almost like a peer review, and that gives us a comfort level that, as CEOs, things are being done effectively.
It’s scary. We have a $12 million IT budget and so, should it be $2 million or should it be $20 million. We don’t know.
RP: One of the dangers of metrics is that not everyone does the same job in the same way. Some people would turn out a program in a day, some would turn it out in a week, but which is better quality? You can’t just use it in the form of a measure, you have to use judgement to balance the two.
JVC: I’m fascinated by the fact that the IT managers here don’t want metrics, but I agree. Sometimes, they are an end unto themselves rather than a means to an end. The further away you are from senior management, the more you can be driven by metrics. Your decisions can be driven by, “I have got to get to this 95 per cent,” and they are actually defeating the business rather than supporting it. In the generic, metrics should really be seen as a way of checking your business, it should not be an end unto itself.
CC: Some CIOs are so busy dealing with infrastructure issues, and guaranteeing the network is up 99.999 per cent of the time that they may not have the time to deal with business strategy or users. What do you say to them?
JD: You should be able to measure those things fairly easily whether it’s network downtime or calls to the help desk. But I believe it’s the customer that is going to determine which metric you should look at. The foundation of basic metrics is that you should be able to show “Yes, we have been very good in all these categories.” But I also think you need to look at the business side of things that says, “Where are we successful and are we getting the projects out on time and the proper product to the right department.” Then go back after the fact and make sure there is customer satisfaction after the process is complete and continues into the maintenance phase.
EN: You have to make sure first that the infrastructure is very solid. As you put more bricks onto it, it is going to fail anyway. But you have to make a separate decision about how many nines you want, because every time you add a nine, your cost goes up very quickly. But yes, customer satisfaction is the ultimate metric that we all use.
CC: How much does the CEO really need to know about IT given technology becomes obsolete so fast and can change so quickly?
JVC: So if I can change the question a little bit, what happens when the world throws you a curve ball? You have to react to it, of course, so build me a road map that sets me a direction but acknowledges that things could change. You still have to establish a general direction but also, when the world changes, you can react to it.
The second thing is how much does the CEO need to understand the CIO, and obviously, the CEO is a busy person who has many different functions. It has to be communicated in the language of the CEO and I would suggest to you to use economic terms.
The CIO needs to understand the technical terms and the environment but both sides need to come together on that. I would strongly encourage CIOs who don’t have a firm grasp of that because that is the language of the CEO and that is what is going to get heard.
PG: What I’ve learned over the years is to try to give to the CIO as much as is possible the information that I have about potential changes to the road map or potential opportunities that we might have to exploit rapidly.
CC: What do you say to a CIO who may be stuck with an operational role and is not able to contribute to the business side of the operation?
RP: That is an opportunity lost.
JD: As I said earlier, it’s communications. You can be in a meeting and take the best notes, and communicate your view of what that meeting is, but you are going to miss out on some key information. Not having an IT professional at the level who at least understands what can be done and what can’t be done from a business perspective is pretty dangerous, and I think that danger exists at every level as you go from the CEO down to the employee where the business decisions are made.
PG: I really think it depends on the skill sets of the CIO too. If you really want to be successful as a CIO, my advice is to round out those skill sets, to read a financial statement, to go out with the sales people on a sales call, and talk to the customers. Sit down with the accountants. This is important. If you really want to be a successful CIO, don’t just live in a narrow hallway called IT. Try to interface with everybody and really understand them, and that will give you the skills to be at the governance level.
JD: I’d like to echo that point. Be a business leader first. Be a functional leader second. That will get you the language of dollars and cents. It is a way to earn a place rather than be placed. Too many times we are in our own silos and we don’t understand the business. How many times have you rolled out a technology only to find out later you don’t understand why they aren’t getting the best use of this product. Most of the time it’s because you didn’t understand the business side. You did not understand what that person is using it for.