The CIO

1
The CIO
A look at the evolving role of the CIO. Vicky
HsinyuBill KellerNathaniel LarocheAaron
McMurry
2
For Our Purposes

• CTO
• Relied upon for IT architecture, infrastructure,
  etc.
• 80 IT and 20 Business
• CIO
• Integrates IT into the overall business strategy
• Introduces emerging technologies
• 80 Business and 20 IT

3
Introduction

• Demographics of todays CIO
• An interview with Bryan Doerr, CIO/CTO of Savvis
  Communications
• An interview with Greg Anstead, CIO of Citi Home
  Equity
• The evolving role of the CIO
• The CIO, Compliance, and Security
• The New CIO Leader

4
Demographics of the CIO
The source of past experience

1. IT/Technology71
2. Business Operations (non-IT).7
3. Consulting.7
4. Engineering...3
5. Finance/Accounting.3

http//www.cio.com/state/, viewed March 21, 2006
5
Demographics of the CIO
Tenure Less than 2 years24 2-5
years35 5-10 years...31
More than 10 years..9 Average tenure
for a CIO is 4 years 11 months. Contrast that
with the average tenure of 28 months for a CFO.
http//www.cio.com/state/, viewed March 21, 2006
6
Demographics of the CIO
Salary by industry revenues
http//www.cio.com/state/, viewed March 21, 2006
7
Demographics of the CIO
Who CIOs reports to
CEO.42 COO.14 CFO..23 C
orporate CIO..3 Other26
http//www.cio.com/state/, viewed March 21, 2006
8
Demographics of the CIO
How CIOs spend their time


http//www.cio.com/state/, viewed March 21, 2006
9
CIO Interviews

• Bryan Doerr, CIO/CTO of Savvis
• Greg Anstead, CIO of Citi Home Equity

10

• Founded in 1995
• HQ in St. Louis
• 2000 employees
• gt 5000 enterprise clients
• One of the largest IP network and hosting
  providers in the world
• Goal is to become an application infrastructure
  utility
• Security and reliability of a private
  infrastructure
• Cost effectiveness of a shared service
• Company has strong technology emphasis due to
  core service offering and evolution of the company

1 http//www.savvis.net/corp/CompanyInformation/I
nvestorRelations/
11

• Example of service
• Connecting satellite offices and/or customers to
  headquarters ERP system via an intelligent IP
  virtual private network (VPN)
• -Or- have Savvis also host the ERP system at a
  Savvis data center
• Each site can have own internet access as well as
  secure access to VPN
• VPN (single access circuit) can handle multiple
  applications, voice, video conference, CRM, etc

Savvis IP Network
HQ
Remote Site A
Savvis Data Center
Partner Site C
Remote Site C
Remote Site B
Partner Site B
1 http//www.savvis.net/corp/CompanyInformation/I
nvestorRelations/
12
Savvis StatisticsRevenue
http//www.savvis.net/NR/rdonlyres/1150CCDC-20D1-4
CDA-9AA7-E77E21558A69/8782/factsglance2.pdf
13
Savvis CIO Bryan Doerr1

• BRYAN DOERR is Chief Technology/Information
  Officer at SAVVIS Communications
• CIO role began in 2003
• Leads product RD, OSS development, traffic
  engineering and cost management, customer
  solutions, and back-office system development.
• Mr. Doerr held positions in management, software
  technology research, and software development at
  Bridge Information Systems, Boeing, and the
  Applied Physics Laboratory.
• Education
• Masters Degree in Electrical Engineering from
  Johns Hopkins University in Baltimore, Maryland
• Masters Degree in Information Management from
  Washington University in St. Louis, Missouri.

1 http//www.savvis.net/corp/CompanyInformation/I
nvestorRelations/
14
Savvis Executive Team
IT focused business with Engineering focused
staff.

• All Managers above (excluding shaded area) are
  part of Tier 1 Executive Team.
• All have equal access to CEO and equal influence
• All have their own budget
• Bi-monthly meetings

Bryan Doerr, CTO/CIO of Savvis, interviewed in
person by Bill Keller, March 29, 2006.
15
CIO Role at Savvis

• Combines CTO and CIO roles
• Mr. Doerr had CIO type responsibilities before
  current role and took on CTO responsibilities
  when accepting his current role
• IT management is centralized
• No silos or divisional CTOs
• CTO vs CIO focus is business driven
• Focus right now is more CIO focused
• CIO 65 / CTO 35
• Possible for this to swing back (reverse)

Bryan Doerr, CTO/CIO of Savvis, interviewed in
person by Bill Keller, March 29, 2006.
16
Top Priorities for 2006

• Continued Integration of Systems
• Internal system integration due largely to
  acquisitions and providing IT efficiency
• Improve position for legislative requirements
• SOX
• Business Process Efficiency
• Automating operational tasks and helping users
  improve their business metrics
• Top priorities seem more focused on
• CTO/Operational goals for this year

Non Valued-Added Operational
Non Valued-Added Operational
Valued-Added Strategic
Bryan Doerr, CTO/CIO of Savvis, interviewed in
person by Bill Keller, March 29, 2006.
17
What keeps you up at night?

• The right systems architecture
• Too slow in getting there
• Operational vs. strategic tradeoff
• figuring out how long you can freeze something
  to fix it is a challenging problem
• Conflicting Tier 1 priorities
• Level of short-term sacrifice for long-term
  benefit
• Lesson Learned from Quote/Order System
  Development
• if they user community cant draw the process,
  dont even start it

Bryan Doerr, CTO/CIO of Savvis, interviewed in
person by Bill Keller, March 29, 2006.
18
CIO Skills

• People
• Leadership and flat executive structure
• Technical
• Savvis is highly technology focused
• If I dont have the vision of what the
  technical structure will be, I cant lead
  people
• Business
• May be interesting to see if this changes with
  new CEO

Bryan Doerr, CTO/CIO of Savvis, interviewed in
person by Bill Keller, March 29, 2006.
19
How is CIO Evaluated

• Subjective, company wide model

Bryan Doerr, CTO/CIO of Savvis, interviewed in
person by Bill Keller, March 29, 2006.
20
Citi Home Equity Statistics
Citi Home Equitys 277 MM of Net Income in 2006
would rank number 330 on latest Fortune 1000
list.
Greg Anstead, CIO of Citi Home Equity,
interviewed in person by Nathaniel Laroche, March
27, 2006.
21
Citi Home Equity Statistics
Revenues
22
Citi Home Equity Organizational Structure
CitiGroup
Global Consumer Group
Corporate and Investment Banking
Global Wealth Management
Alternative Investments
Each business unit has a CIO that reports to a
CEO. All technology is generally left on the SBU
level.
Consumer Lending Group
Bankcards
CitiFinancial
Citi Home Equity
CitiMortgage
Student Loans
Auto Loans
Greg Anstead, CIO of Citi Home Equity,
interviewed in person by Nathaniel Laroche, March
27, 2006.
23
Citi Home Equity CIO Greg Anstead

• Education
• AA in Computer Science
• BS in Computer Science/BS in Management
• Masters in Management
• Recent Experience
• CTO with Citigroup Real Estate and Technology for
  2 years managing a development group of 400.
• CIO of Citi Home Equity for the last 15 months

Greg Anstead, CIO of Citi Home Equity,
interviewed in person by Nathaniel Laroche, March
27, 2006.
24
Greg Anstead Interview Notes

• How do you see your role in the organization?
• To provide technology solutions for the business
  to be competitive, reduce cost, and increase
  innovation.
• What keeps you up at night?
• Control is issue number one at Citigroup as one
  bad audit could shut this business down and
  compromise the integrity of Citigroup.

Greg Anstead, CIO of Citi Home Equity,
interviewed in person by Nathaniel Laroche, March
27, 2006.
25
Greg Anstead Interview Notes

• How is your performance evaluated?
• Tactically
• Strategically
• Politically being able to relate to CEOs
  managers. This is actually weighted heavier then
  the tactical (operational) or strategic portions
  of his performance.
• Current role is more operational then strategic
  due to tremendous growth.
• Role should be 80 strategic and 20 tactical.

Greg Anstead, CIO of Citi Home Equity,
interviewed in person by Nathaniel Laroche, March
27, 2006.
26
The re-org of Citigroups North American IT!
CitiGroup
Each SBU has a CIO that reports to a corporate
CIO with a dotted line to the SBUs CEO.
North American IT
Global Consumer Group
Corporate and Investment Banking
Global Wealth Management
Alternative Investments
Consumer Lending Group
Bankcards
CitiFinancial
Citi Home Equity
CitiMortgage
Student Loans
Auto Loans
Greg Anstead, CIO of Citi Home Equity,
interviewed in person by Nathaniel Laroche, March
27, 2006.
27
The result of the Citigroup reorg
Old model each SBU has their own CIO New model
each SBUs CIO reports to a corporate CIO with a
dotted line to the SBUs CEO
What do you believe are the goals/benefits of
this organization?
What do you see as some potential drawbacks?
28
The result of the Citigroup re-org

• Greg Anstead noted in his interview that the goal
  of this centralization is to
• drive down cost
• improve consistency
• present one face to customers
• improve our compliance with regulators.

The potential drawback is a lack of focus
reporting to a corporate CIO and a dotted line to
the SBUs CEO.
Greg Anstead, CIO of Citi Home Equity,
interviewed in person by Nathaniel Laroche, March
27, 2006.
29
Development of the CIO
Early on business functions are silos of
excellence.
HR
Customer Service
Supplier MGT
Manufacturing
Sales
Service Delivery
30
Development of the CIO
Early on business functions are silos of
excellence.
HR
Customer Service
Supplier MGT
Manufacturing
Sales
Service Delivery
IT is recognized by internal stakeholders as a
key tool for operational efficiency.
Technology supports functional improvements
31
Development of the CIO
Technology
Industry
The organization must also respond to external
forces.
IT becomes more an integral to the business.
CIO
Regulatory
Customers
Coordination between silos must increase.
32
Role of CIO with External and Internal Demands

• Demands on Business
• Customers (speed, reliability, accuracy,
  security)
• Supply Chain

• Demands on Business
• Customers (accessibility, integration)
• B2B

Operations
Technology
COO
CTO
CIO
Finance
CFO

• Demands on Business
• Shareholders (reporting, planning)
• Regulatory (reporting and compliance)
• Financial Markets (reporting and compliance)

33
Role of CIO within Citi Home Equity and the
implementation of a new system
Demands on Business The COO needs to understand
how the new website will affect workflow and
customer care.
Demands on Business The CTO needs help in
understanding the business requirements of a new
Orginiations website.
Technology
Operations COO
CTO
CIO
Finance CFO
Demands on Business The CFO needs to be a part
of and understand the questions asked in the
website to be sure they meet credit standards.
34
The changing role of the CIO

• 1986 ranking of top 10 issues
• Facilitating/managing end-user computing
• Translating information technology into
  competitive advantage
• Having top management understand needs and
  perspective of IS
• Measuring and improving effectiveness/productivity
  
• Keeping current with changes in technology
• Managing information resources
• Integration of IS technologies
• Data security and control
• Impact of new technology
• Training and education

Passino, Jacque H., Jr., and Severance, Dennis
G., The Changing Role of the Chief Information
Officer Planning Review, Vol. 16, 5, Sep/Oct
1988, pp. 38-42.
35
The changing role of the CIO

• 1986 ranking of top 10 issues
• Facilitating/managing end-user computing
• Translating information technology into
  competitive advantage
• Having top management understand needs and
  perspective of IS
• Measuring and improving effectiveness/productivity
  
• Keeping current with changes in technology
• Managing information resources
• Integration of IS technologies
• Data security and control
• Impact of new technology
• Training and education

More of an operational focus
Passino, Jacque H., Jr., and Severance, Dennis
G., The Changing Role of the Chief Information
Officer Planning Review, Vol. 16, 5, Sep/Oct
1988, pp. 38-42.
36
The changing role of the CIO

• 2005 ranking of top 10 issues
• Cost containment
• Data security and integrity
• Fiscal compliance and data transparency
• Revenue and business growth
• Innovation of products and services
• Stakeholder pressure
• Risk Management
• Customer data integration
• E-business/E-government
• Privacy

Guptill, Bruce, and Koenig, Mark, CIOs Budget
for Business Optimize, Vol. 4, 5, May 2005, pp.
77-80.
37
The changing role of the CIO

• 2005 ranking of top 10 issues
• Cost containment
• Data security and integrity
• Fiscal compliance and data transparency
• Revenue and business growth
• Innovation of products and services
• Stakeholder pressure
• Risk Management
• Customer data integration
• E-business/E-government
• Privacy

Major strategic initiatives 20 years later
Guptill, Bruce, and Koenig, Mark, CIOs Budget
for Business Optimize, Vol. 4, 5, May 2005, pp.
77-80.
38
The changing role of the CIO

• 2005 ranking of top 10 issues
• Cost containment
• Data security and integrity
• Fiscal compliance and data transparency
• Revenue and business growth
• Innovation of products and services
• Stakeholder pressure
• Risk Management
• Customer data integration
• E-business/E-government
• Privacy

Two relatively new and highly emphasized issues
for CIOs!
Guptill, Bruce, and Koenig, Mark, CIOs Budget
for Business Optimize, Vol. 4, 5, May 2005, pp.
77-80.
39
Demands on Business and CIO Compliance

• Section 404 of Sarbanes-Oxley Act requires
  managements assessment and signoff on all
  internal controls.

• When CIOs began installing ERP systemsthey
• unwittingly took something that used to belong to
  CFOs financial controls.1

• One of Greg Ansteads biggest objectives was to
  maintain compliance and meet audit standards for
  fear what poor audit results could do to the
  whole corporation!

1http//www.cio.com/archive/070104/sarbox.html,
viewed 3/3/2006
40
Demands on Business and the CIO at Citi Home
Equity Compliance
Demands on Business COO is required to document
all processes as part of SOX requiring functional
information on IT systems.
Demands on Business CTO must build, improve, and
implement systems that meet new regulations.
Technology CTO
Operations COO
CIO
Finance CFO
Demands on Business CFO required to with
auditors to look at data systems to comply with
the Sarbanes-Oxley Act and the Graham-Leach Act.
41
Demands on Business and the CIO Security

• Identity theft, phishing scams, intellectual
  property theft are just three examples of the
  types of information security threats.

• Just 37 percent of respondents reported that
  they had an information security strategyand
  only 24 percent of the rest say that creating one
  is in the plans for next year.1

• Going back to the Citi Home Equity interview
  security was identified as a major component to
  Citigroups success and a major initiative at
  Citi Home Equity.

1 www.cio.com/archive/091505/global.html, viewed
3/3/2006
42
Security demands on the Business and the CIO at
Citi Home Equity
Demands on Business Entitlement reviews go out
across the business checking for unauthorized
access.
Demands on Business The CTO must implement
technical controls to tighten access to systems
and to be sure all systems are relatively hack
proof.
Technology CTO
Operations COO
CIO
Finance CFO
Demands on Business CFO must work with
Technology to be sure systems are secured and
access is controlled.
43
From What to How

• Necessities for the leap from CTO to CIO
• Leadership
• Credibility
• Communication Relationship building
• Business Knowledge
• Know Your Enterprise
• Competitive environment, business fundamentals,
  etc.
• Vision
• Where can IT strengthen customer relationships
  and impact growth?

Broadbent, Marianne, and Kitzis, Ellen, The New
CIO Leader, Harvard Business School Press,
Boston, MA, 2005.
44
Leadership Deliver Results that Matter

• Credibility
• To build credibility with your fellow executives
• Deliver results that matter to them
• How does it help executive colleagues meet their
  goals?

Initial Credibility
Credibility
Results
Resources
Outcomes
Lost Credibility
Broadbent, Marianne, and Kitzis, Ellen, The New
CIO Leader, Harvard Business School Press,
Boston, MA, 2005.
45
Leadership Play Politics

• Communication is the Key
• Push, Prod, Educate Stimulate
• 20 of CIOs time
• Build Relationships
• Build Political Capital
• Know key stakeholders
• Convert opponent Strengthen advocates

Broadbent, Marianne, and Kitzis, Ellen, The New
CIO Leader, Harvard Business School Press,
Boston, MA, 2005.
46
Business Know Thy Enterprise

• Industry Competitive Environment
• Where does the enterprise stand relative to its
  competitors?
• Lagging, Maintaining or Leading
• Business Fundamentals
• Competitive Advantage Strategy
• Industry Trends
• What developments will impact the firm?
• Business maxims? IT maxims? IT initiatives

Broadbent, Marianne, and Kitzis, Ellen, The New
CIO Leader, Harvard Business School Press,
Boston, MA, 2005.
47
Vision Dont Just Manage, LEAD!

• Based On
• Economic model of enterprise
• Strategic intent endeavors
• Seize the Opportunity
• Generate ITOs
• Choose wisely
• Dont follow the hype
• Pilot programs
• Testing phase

Broadbent, Marianne, and Kitzis, Ellen, The New
CIO Leader, Harvard Business School Press,
Boston, MA, 2005.
48
In the Future

• No More IT Projects!
• IT Projects are Business projects
• CIO as an Enterprise Business Leader
• Implement strategic initiatives
• Create competitive advantage
• Capitalize on opportunities (emerging tech.)

Broadbent, Marianne, and Kitzis, Ellen, The New
CIO Leader, Harvard Business School Press,
Boston, MA, 2005.
49
What questions do you have?
50
Appendix
51
Demands By the Business
Make this easier, less manual, and more effective.
HR
Customer Service
Supplier MGT
Manufacturing
Sales
Service Delivery
52
Demands By the Business
Make this easier, less manual, and more effective.
IT recognized by business a key tool for
operational efficiency.
HR
Customer Service
Supplier MGT
Operations
Manufacturing
Sales
Service Delivery
IT plays a larger role in business processes.
Head of Technology is called upon for
intra-functional process improvement.
53
Demands By the Business
Make this easier, less manual, and more effective.
IT becomes more integral to the business.
CTO
Head of Technology is called upon for
inter-functional process improvement.
CTO role manages demands by the business.
54
Role of CIO with External and Internal Demands

• Demands on Business
• Customers (speed, reliability, accuracy,
  security)
• Supply Chain

• Demands on Business
• Customers (accessibility, integration)
• B2B

Operations
Technology
COO
CTO
CIO
Finance
CFO

• Demands on Business
• Shareholders (reporting, planning)
• Regulatory (reporting and compliance)
• Financial Markets (reporting and compliance)

55
Role of CIO Citi Home Equity

• Demands on Business
• Customers (speed, reliability, accuracy,
  security)
• Supply Chain

• Demands on Business
• Customers (accessibility, integration)
• B2B

Technology CTO
Operations COO
CIO
Finance CFO

• Demands on Business
• Shareholders (reporting, planning)
• Regulatory (reporting and compliance)
• Financial Markets (reporting and compliance)