IBM Institute for Business Value
New Zealand
CIO Study 2011 Comparative Deck
Insights from the
Global Chief Information
Officer Study
1
© 2011 IBM Corporation
IBM Institute for Business Value
Our ongoing CIO research focuses on activities deployed by the CIO
as part of their ongoing efforts to grow authority and impact
WHAT are CIOs doing?
2009 CIO Study: The new voice of the CIO
WHY are CIOs doing this?
2010: Connecting across the C-suite
HOW are CIOs doing it?
2011 CIO Study: The Essential CIO
2
© 2011 IBM Corporation
IBM Institute for Business Value
Results were compiled from more than 3,000 face-to-face CIO
interviews
The study represents a diverse group of organisations
in 72 countries and 33 industries in 5 sectors
Geography
Sector
North America
(16%)
Japan
(6%)
Public
(15%)
organisation Size
Communications
(12%)
Europe
(35%)
Industrial
(25%)
Growth Markets
(43%)
Over 10,000
employees
(33%)
Less than 1,000
employees
(28%)
Distribution
(26%)
Financial Services
(22%)
Between 1,000 and
10,000 employees
(39%)
Note: Growth Markets include Latin America, Asia Pacific (excluding Japan), Middle East and Africa
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© 2011 IBM Corporation
IBM Institute for Business Value
Strong public sector and Distribution representation in NZ results
New Zealand comparative deck represents a group of organisations in 5 sectors
Sector
organisation Size
Communications
(6%)
Public
(35%)
Industrial
(18%)
Over 10,000
employees
(6%)
Less than 1,000
employees
(44%)
Distribution
(29%)
Financial Services
(12%)
Between 1,000 and
10,000 employees
(50%)
Source: 2011 CIO Study; New Zealand, n=54
4
© 2011 IBM Corporation
IBM Institute for Business Value
As the world becomes more instrumented, interconnected and
intelligent, the CIO role holds even more importance
Business needs and expectations drive the CIO’s mandate to use technology
58%
68%
CIOs report their organizations have largely integrated
business and technology to innovate
CIOs have a seat at the executive table to help infuse technology into
products, services and processes
Senior management would rank technology as totally
critical to the success of the business
A clear mandate empowers CIOs to help the business get the most out
of technology
“We will provide the appropriate technology for the continuously changing business
environment and more accurate information to the business.“
Zsolt Rasztovits, CIO MKB Bank Zrt.
Source: 2011 CIO Study, Questions D.C: “To what extent has your organization integrated business and technology to innovate?”; D.E: “What score would the entire senior
management team give technology for its contribution to the business?” (n=3,018)
5
© 2011 IBM Corporation
IBM Institute for Business Value
Agenda
CIOs align strongly with the CEO
Distinct CIO mandates help to grow
“Authority and Impact”
The Essential CIO
6
© 2011 IBM Corporation
IBM Institute for Business Value
Two years have significantly changed CIO assessments of external
forces with responses that are similar to the 2010 CEO perspective
2009 CIO
2011 CIO
2011 NZ
2010 CEO
1
1
1
Market factors
2
2
2
Technological factors
3
3
3
Macroeconomic factors
4
4
4
People skills
5
6
5
Regulatory concerns
6
8*
6
Globalisation
* Budgets (Public Only) was ranked #5 in New Zealand
“New technologies are about to disrupt
the industry.”
Industrial Products CIO, Germany
Source: Quarter 4 2010 responses derived from Question 1 were weighted due to a ranked response in the 2011 CIO Study questionnaire; Q1: “What are the three most important
external forces that will impact your organisation over the next 3 to 5 years?” (n=3,018)
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© 2011 IBM Corporation
IBM Institute for Business Value
The trend is also reflected in New Zealand
Expectation of complexity and change in the coming 3 to 5 years
2011 CIO Study – New Zealand
55
8
24
Less
%
%
%
Less
54
7
20
%
More
Complexity
19
%
Change
Change
%
More
13
Less
More
2010 CEO Study
%
%
Less
More
Complexity
Source: CEO study 2010, based on face-to-face conversations with 1500 CEOs / CIO study 2011, based on face-to-face conversations with over 3,000 CIOs, New Zealand ,n=54
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© 2011 IBM Corporation
IBM Institute for Business Value
CEOs and CIOs are both highly focused on insights, clients and
people skills
CEO focus over the next 5 years
CIO focus over the next 5 years
79%
83%
Insight and intelligence
Getting closer to customer
88%
People skills
81%
Insight and intelligence
71%
63%
Client intimacy
76%
66%
56%
People skills
Enterprise model changes
57%
Risk management
55%
Industry model changes
54%
Revenue model changes
Internal collaboration &
Communications
Risk management
50%
31%
54%
Enterprise model changes
Industry model changes
Global sample
64%
50%
New Zealand
Revenue model changes
48%
50%
39%
41%
35%
26%
Source: 2010 CEO Study Q13: “Which of the following dimensions will you focus on more to realise your strategy in the new economic environment over the next 5 years?”,n=1,523;
2011 CIO Study, Q13: “Where will you focus IT to help your organisation’s strategy over the next 3 to 5 years?”; Global sample, n=3,018; New Zealand, n=54
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© 2011 IBM Corporation
IBM Institute for Business Value
Business intelligence and analytics play a key role in NZ CIOs’
visionary plans
Most Important Visionary Plan Elements
(Interviewed CIOs could select as many as they wanted)
83%
Business Intelligence and analytics
98%
74%
78%
Mobility solutions
68%
Virtualisation
Cloud computing
Business process management
Risk management and compliance
Self-service portals
Collaboration and Social Networking
Global sample
80%
60%
61%
60%
70%
58%
70%
57%
83%
55%
61%
New Zealand
Source: 2011 CIO Study, Q12: “Which visionary plans do you have to increase competitiveness over the next 3 to 5 years?”; Global sample, n=3,018; New Zealand, n=54
10
© 2011 IBM Corporation
IBM Institute for Business Value
Agenda
CIOs align strongly with the CEO
Distinct CIO mandates help to grow
“Authority and Impact”
The Essential CIO
11
© 2011 IBM Corporation
IBM Institute for Business Value
CIO response patterns associated with business expectations of IT
fall into four categories we define as “The CIO Mandate”
The CIO Mandate
Empowerment of the CIO to achieve the organization’s
goals by leveraging business and information
technology




Agreement between business and IT
Explicit, open and broadly communicated
Applicable across industries and sectors
Changes when the organization’s needs change
"Importantly, the role of CIO is not being looked on as 'Chief IT Mechanic.' It is
recognized as a means to extract value from technology and gain insight from
complex systems.“
Mark Hale, Director of IS for Food Retail, The Co-operative Group
Note: Outperformers and underperformers in each mandate were identified by answers to questions about their organization’s competitive position. Those who selected “substantially
outperform industry peers” were identified as top performers, those who selected “somewhat or substantially underperforming industry peers” were grouped as lower performers.
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© 2011 IBM Corporation
IBM Institute for Business Value
CIO Mandates come with distinct characteristics that line up with the
organisations’ goals and strategy
Leverage Mandate
Expand Mandate
Streamline operations and
increase organisational
effectiveness
Refine business processes
and enhance collaboration
Successful CIOs
understand the business’
strategic needs and deliver
on the related mandate,
using the best mix of
activities
Mandates are defined by
strategic needs of the
business
Transform Mandate
Change the
industry value chain
through improved
relationships
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Pioneer Mandate
Mandates can change –
when the business needs
change
Radically innovate
products, markets,
business models
© 2011 IBM Corporation
IBM Institute for Business Value
Leverage mandate: optimise and grow IT fundamentals and enhance
organisational process efficiency
Key focus areas based on
Leverage mandate CIO responses
Leverage
Global
(14%)
New
Zealand
(28%)
Provider of
fundamental
technology services
52%
57%
1. Continually review and update legacy
environment
Facilitator of
organisational process
efficiency
28%
24%
2. Renewed emphasis on information sharing
and collaboration with internal customers
3. Leverage data to measure basic business
and IT metrics
Business view of IT
Provider of industry
specific solutions to
support business
14%
13%
Critical enabler of
business/organisation
vision
6%
6%
Enhance organisational efficiency
and effectiveness
“We anticipate information technology to impact
our industry and company significantly.”
Electronics VP and CIO, United States
Source: 2011 CIO Study, Demographic Question D: “How does your business look at the role of IT?”; Global Leverage sample, n=417 and full analysis of all responses by Leverage
mandate CIOs ; New Zealand total, n=54; New Zealand Leverage, n=15
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© 2011 IBM Corporation
IBM Institute for Business Value
Leverage mandate CIOs continually review their legacy environment
- NZ Leverage CIOs favour bold action
How CIOs plan to control / reduce legacy cost
(allocation of 100 points across 7 activities)
Global sample
Rationalise application portfolio
Use outsource partner
Utilise cloud services
22%
23%
Gradually alter hardware (5 to 10 years)
Radically and totally renew IT environment
New Zealand
18%
5%
18%
15%
13%
10%
19%
12%
Use SOA to modernise / replace legacy
8%
10%
Wrap / isolate legacy environment
7%
9%
“Remove Legacy - it is taking more and more time
“Legacy rationalisation, simplification and product
to support, tying up resources needed to support
new clients on new technologies.”
agility is the way that we will capitalise on the
increasing complexity and change management.”
Travel & Transportation CIO, United States
Insurance CIO, NZ
Source: 2011 CIO Study, Q16: “How do you plan to control and/or reduce the costs of your Legacy environment in the next 3 to 5 years?”; Global Leverage sample, n=417; New Zealand
Leverage, n=15; percentages represent average percentage; Figures may not total to 100% as “Other” priorities have not been included
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© 2011 IBM Corporation
IBM Institute for Business Value
Delivering on the Leverage mandate
How to excel
 Open new communication channels: Make
it a high priority to improve communication
and collaboration throughout the organisation.
 Tap the right team: Carefully match the IT
and business talents to the tasks at hand.
 Standardise and consolidate: Standardise
the IT infrastructure and related processes
organisation-wide.
 Update and renew: Think ahead to develop
practical plans to gradually renew legacy
systems and hardware.
 Discover the dashboard: Establish
dashboards that measure key business and IT
metrics.
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Are you “Essential”?
In what ways will you enhance relationships and
improve communication throughout the
organisation?
What is your plan to get, keep and grow people
with the IT and business skills your organisation
needs the most?
How many disparate architectures does your
organisation currently have, and why?
Are you aggressive enough in rationalising
hardware and the application portfolio as part of
controlling costs?
How do your dashboards measure IT in terms of
business benefits?
© 2011 IBM Corporation
IBM Institute for Business Value
Expand mandate: strong focus on enterprise-wide optimisation of
technology for highest possible integration and effectiveness
Key focus areas based on
Expand mandate CIO responses
Expand
Business view of IT
Global
(50%)
New
Zealand
(48%)
Provider of
fundamental
technology services
27%
31%
Facilitator of
organisational process
efficiency
32%
25%
Provider of industry
specific solutions to
support business
27%
26%
Critical enabler of
business/organisation
vision
15%
18%
Improve competitive differentiation
1. Explore and identify outsourcing
opportunities for non-critical IT functions
2. Enhance internal communication and
collaboration
3. Review, analyse and implement business
process management
4. Continually review and update legacy
environment
“Bring IT from a cost center to a business enabler.”
Industrial Products CIO, Switzerland
Source: 2011 CIO Study, Demographic Question D: “How does your business look at the role of IT?”; Global Expand sample, n=1,508 and full analysis of all responses by Expand
mandate CIOs; New Zealand Total, n=54; New Zealand Expand, n=26
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© 2011 IBM Corporation
IBM Institute for Business Value
Expand mandate CIOs are focusing on the benefits from global
integration in key areas
Changing the mix of capabilities, knowledge and assets within the organization
Both
Maintain the
current mix
14%
Global sample
20%
66%
New Zealand
20%
Deeply change
the mix
53%
27%
“Strategic partnering with some of the more commoditised parts of the
business so we can focus on the differentiators.”
Travel & Transportation CIO, NZ
Partnering versus doing everything in-house
Both
Do everything 17%
in-house
20%
18%
Global sample
65%
New Zealand
27%
Partner
extensively
53%
“Our focus is on best of breed partners and strategic alliances rather than
outsourcing.”
Government CIO, UK
Source: 2011 CIO Study, Q7: “To benefit from global integration will your organization do the following?”; Global Expand sample, n≤1,214; New Zealand Expand, n≤15
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© 2011 IBM Corporation
IBM Institute for Business Value
Delivering on the Expand mandate
How to excel
 Enable state-of-the-art collaboration:
Evaluate and adopt tools to strengthen
enterprise-wide collaboration and exchange of
data.
 Tighten business and technology
integration: Increase two-way transparency
by involving internal clients in planning and
decision-making .
 Focus on the core: Rely on trusted partners
to handle non-strategic IT functions.
 Simplify, automate, integrate: Implement
advanced business process management.
 Advance the metrics: Provide sophisticated
dashboards through more advanced types of
analytics
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Are you “Essential”?
 What leading edge collaboration tools have
you implemented across the enterprise to
help integrate technology with business?
 How deeply are your internal customers
involved in your key planning and decision
processes?
 What is your plan to engage partners to
outsource information technology functions?
 Which persistently inefficient processes can
you eliminate or improve to increase
customer satisfaction?
 How do you work with internal customers to
ensure dashboards measure enterprise-wide
key performance indicators?
© 2011 IBM Corporation
IBM Institute for Business Value
Transform mandate: emphasis on IT optimisation to enhance the
organisation’s position outside the four walls of the enterprise
Transform
Business view of IT
Provider of
fundamental
technology services
Key focus areas based on
Transform mandate CIO responses
Global
(23%)
New
Zealand
(17%)
14%
20%
Change the industry value chain
1. Use of “Big” data to expand/enhance
customer and partner relationships
2. Simplification for clients and partners
Facilitator of
organisational process
efficiency
26%
20%
Provider of industry
specific solutions to
support business
34%
26%
Critical enabler of
business/organisation
vision
27%
34%
3. Enhancement and expansion of the value
chain outside the organisation
4. Enhance relationship with the organisation:
business-IT intimacy
“We are passionate about providing intelligent
information back to the business..”
Industrial Products CIO, NZ
Source: 2011 CIO Study, Demographic Question D: “How does your business look at the role of IT?”; Global Transform sample, n=688 and full analysis of all responses by Transform
mandate CIOs; New Zealand total, n=54; New Zealand Transform, n=9
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© 2011 IBM Corporation
IBM Institute for Business Value
“Simplify, simplify, simplify” is the mantra for Transform mandate
CIOs
How will IT drive operational improvements for the organisation?
Global sample
Simplify internal key
processes
1 15%
Simplify for clients
4 22%
Simplify for external
10% 39%
partners
New Zealand
0% 11% 89%
84%
75%
0% 44%
56%
51%
0% 44%
56%
No involvement
“Clients want better access to their own
information, so we will simplify and standardise
Support
Lead
“Trying to build ‘information trough’ where business
users can drink without effort.”
the “look and feel” across channels for client
interactions.”
Banking CIO, United States
Financial Services CIO, NZ
Source: 2011 CIO Study, Q10: “To enable and improve your organisation’s operations, how will you help drive the following initiatives?”; Global Transform sample, n=688; New Zealand
Transform, n=9. Some responses may add to over 100% due to rounding up
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© 2011 IBM Corporation
IBM Institute for Business Value
Delivering on the Transform mandate
How to excel
Are you “Essential”?
 Simplify, simplify, simplify: Make your
organisation easier to do business with.
Remove unnecessary complexity.
 What are your plans to simplify the customer
experience, products and services to
increase functionality, use and satisfaction?
 Make it real: Design dashboards that use
real-time data collection.
 Does your dashboard design include realtime metrics, such as internal and external
customer satisfaction levels, end-user time
savings and talent retention?
 Extend the value chain: Enhance and
expand influence throughout the value chain.
 Harness more real-time data: Generate
insights through feedback collection,
sentiment analysis and connection to social
networks.
 Analyse! Dive deep into advanced analytics
to develop insights into customer behavior,
value chain relationships and competitive
intelligence
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 Are you introducing social media and
collaboration capabilities to customers and
partners, as well as internal clients?
 How do you take advantage of Big Data and
new IT capabilities to achieve real-time
insights?
 In what ways are you exploiting leading-edge
analytical skills and technology?
© 2011 IBM Corporation
IBM Institute for Business Value
Pioneer mandate: CIOs and their teams optimise IT to radically
change products, markets, business models
Key focus areas based on
Pioneer mandate CIO responses
Pioneer
Global
(13%)
New
Zealand
(7%)
Provider of
fundamental
technology services
8%
10%
Facilitator of
organisational process
efficiency
14%
15%
Provider of industry
specific solutions to
support business
26%
28%
Critical enabler of
business/organisation
vision
52%
47%
Business view of IT
Radically change products, markets,
business models
1. Widespread use of predictive intelligence to
fundamentally change the business
2. Search for new sources of revenue
3. Take customer experience to a whole new
level using social network analysis and
related technologies
“Work with the business to find out what they need,
to guide IT strategy.”
Industrial Products CIO, NZ
Source: 2011 CIO Study, Demographic Question D: “How does your business look at the role of IT?”; Global Pioneer sample, n=405 and full analysis of all responses by Pioneer
mandate CIOs; New Zealand total, n=54; New Zealand Pioneer, n=4
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© 2011 IBM Corporation
IBM Institute for Business Value
CIOs with a Pioneer mandate are focusing on a wide array of
revenue and profitability metrics
Activities related to increasing revenue
Global sample
Product/service profitability
16% 15%
analysis
Product/service utilisation
16% 24%
analysis
Adding new sources of
21% 22%
revenue
Revenue model changes 27%
25%
Low transformative potential
New Zealand
50%
68%
60%
0% 0%
0%
100%
57%
25%
47%
25%
Average transformative potential
50%
25%
25%
50%
50%
High transformative potential
“We plan to increase revenue and profitability by
“Clearly focus on enabling the business to interact
providing the right platform to measure and analyse
data.”
with the client more effectively and efficiently, and
aligned with new product going to market.”
Jean-Daniel Renevey, Head of Information Services, APAC,
Roche Diagnostics Asia Pacific Pte Ltd
Telecommunications CIO, NZ
Source: 2011 CIO Study, Q8: “How will information technology impact your industry and organisation over the next 3 to 5 years?”; Q13: “Where will you focus IT to help your organisation’s
strategy over the next 3 to 5 years?”; Global Pioneer sample, n=405; New Zealand Pioneer, n=4; some responses may add to over 100% due to rounding up
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© 2011 IBM Corporation
IBM Institute for Business Value
Delivering on the Pioneer mandate
How to excel
Are you “Essential”?
 Innovate on the top line Build predictive
intelligence capabilities that can
fundamentally change the business
 Which channels can you leverage to share
ideas and co-create new products and
services that delight your customers?
 Act on deep customer understanding
Discover new sources of revenue through
provocative invention/re-invention and cocreation
 How will you leverage social media and
business intelligence to spot trends that
present new customer opportunities?
 Exceed the expectations Elevate the
customer experience by using social network
analysis and related technologies
 What are you doing to converge disparate
technologies for the benefit of your
organisation, customers, value chain and
beyond?
 Develop a culture of analytics Offer
dynamic dashboards using real-time data to
provide situational metrics
 How can you develop talent to apply
predictive intelligence to radically change
your business model, products or industry?
 Add dials to your dashboard
 How will you design dynamic dashboards
that leverage real-time data and predictive
analytics?
25
© 2011 IBM Corporation
IBM Institute for Business Value
Agenda
CIOs align strongly with the CEO
Distinct CIO mandates help to grow
“Authority and Impact”
The Essential CIO
26
© 2011 IBM Corporation
IBM Institute for Business Value
The CIO reporting relationship is in part driven by the mandate
CIO Reporting Chain
Other
COO
18%
16%
16%
21%
23%
12%
29%
11%
22%
CFO
11%
14%
25%
27%
9%
15%
CEO
56%
Pioneer
50%
Transform
40%
Expand
32%
Leverage
54%
New Zealand
Source: 2011 CIO Study, Demographic Question G: “As a CIO I report to the CEO/CFO/COO/Other“; Global sample, n=3,013; New Zealand, n=54
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© 2011 IBM Corporation
IBM Institute for Business Value
CIOs have identified three distinct key success factors when
implementing major initiatives, regardless of mandate
Global CIO
2011
New
Zealand
2011
1
1
Manage beyond line responsibilities
2
2
Create right conditions before starting
3
3
Build cross organisation constituency
4
4
Obtain budget for end to end realisation
5
5
Winning client / citizen support
6
6
“We will create value through the
Determine proper pace of activities
7
7
External stakeholders constituency
8
8
ability to manage beyond line
responsibilities and building
constituency across the company."
Guiding solutions through procurement
9
9
Having IT / business talent in place
“It's about organisation development
and skills competency. Bringing in
talented people to lead changes."
Travel CIO, Singapore
Cezary Kosewski, CIO, Sklepy Komfort S.A.
Source: 2011 CIO Study, Q20: “When you’ve been successful with a major initiative, which of the following actions have proven most important?”(n=3,018)
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© 2011 IBM Corporation
IBM Institute for Business Value
The most successful CIOs will be those who understand and
deliver on their mandates, aligned with the organisation’s strategy
Expand mandate
Refine business processes and
enhance collaboration





Outsource
Communicate & collaborate internally
Focus on business process management
Review and update legacy environment
Integrate business & technology for innovation
“ Internal collaboration is a must, cultural issues have to be
addressed, and knowledge has to be shared and used.”
Banking CIO, India
Leverage mandate
Streamline operations and
increase organisational effectiveness





“We need to cope with change by re-engaging with our internal
customers in a more intimate way - the solution is part
structural and part cultural.”
Government CIO, Australia
Transform mandate
Change the industry value chain
through improved relationships





Use “Big data” and real-time info
Simplify for clients/partners
Enhance and expand the value chain
Use risk management frameworks
Use visual dashboards to support informed decisions
“Using IT tools and applications to help the business units to
have better info and visibility to manage the risk, will help lower
costs and improve competitiveness.”
Electronics CIO, Taiwan
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Standardise infrastructure & processes
Control legacy costs
Implement collaboration tools for internal clients
Gradually introduce technology
Have the right business & IT team on projects
Pioneer mandate
Radically innovate products, markets,
business models





Pilot technology for social value
Explore new sources of revenue
Enhance customer experience
Pursue non-stop growth
Pursue non-stop growth
“When we improve or create new processes, we get closer
to the customer and generate new revenue sources.”
Automotive CIO, Brazil
© 2011 IBM Corporation
IBM Institute for Business Value
Continue the conversation at
www.ibm.com/theessentialcio
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