The CIO Agenda 2010

What will be the standout business and technology challenges in the post-recessionary environment? We canvass a panel of executives and analysts on what to do now for the organisation, the ICT team and your career.

What will be the standout business and technology challenges in the post-recessionary environment? We canvass a panel of executives and analysts on what to do now for the organisation, the ICT team and your career. Deliver customer valueJonathan Iles, CIO, Carter Holt HarveyDuring the financial crisis that saw enterprises pulling the plug or holding off on key programmes, Jonathan Iles and his team were working on "fairly major projects"."In fact, there will be more this year," says the chief information officer of Carter Holt Harvey. As he tells his team, "We are sailing into the perfect storm. So let us batten down the hatches, get those ships ready so that when we go into this, we are highly motivated, we know what we are doing, and we manage to hold everything together."He says with the past year the focus of ICT at CHH was delivering customer value, and this will continue in the next 12 months. "2010 will still be very much moving into value and improving the relationships with our customers."The projects around this range from an ERP upgrade to what Iles calls "very basic things", like CRM and pricing and invoicing systems. "This means our customers, people who buy our wood products, our pulp paper, our packaging; they have a better experience for us so we go for greater market share. That is what really drives most value to the business."As well, the team is preparing for shifts throughout the year. "I expect to see some major structural changes in the business over the next 12 to 18 months and that is going to add to a lot of projects at the same time," says Iles. "We need to maintain the high quality of infrastructure delivery, despite the fact that we are containing costs.""We are driving really hard on infrastructure," he says. "We have made some major savings that allowed us to spend more money on ERP, without increasing the budget.""This is about, 'How do I align with the business strategy? Am I implementing the right strategy to fit the business?'"Like his executive colleagues, the past year has delivered a handful of lessons for Iles. Foremost is, "You need to be ruthless with your business cases." The second is the value of having flexible contracts with key vendors. "This flexibility should enable no-penalty changes to be made -- including the ability to terminate services at no cost," says Iles.CHH renegotiated several key contracts at the beginning of last year to introduce competition into the relationships, with the result that costs for several services dropped significantly. This exercise will be done this year. "When the economic climate changes quickly, having long-term, inflexible contracts can be a major burden," he says.Another key lesson during the economic slowdown was the importance of having variable costs. For instance, says Iles, if the company sells a business unit, there is no proportionate reduction in software and hardware maintenance. "We would like to reduce the cost proportionally. The only way you can do that is by variable cost," says Iles. "Most of our costs are fixed, but we certainly want to move to a more variable cost model," which he notes is the promise of cloud computing.As for post-recession plans, Iles foresees a busier period ahead. "For me, post-recession means a surge of activity and I can see that that is going to be coming."Interestingly, one of his major activities last year was far removed from ICT. Iles joined Pat O'Connell, CIO of Rank Group, of which CHH is a subsidiary, and Glenda Mullany of IT firm The Tango Group, to complete a series of endurance challenges to raise funds for charity. The group's "final challenge was scaling the four highest mountains in the North Island -- Tongariro, Ngauruhoe, Ruapehu and Taranaki mountains. They achieved this in November and raised more than NZ$22,000 for the Kia Timata Ano Trust, a women's refuge in Rodney. (See http://cio.co.nz/cio.nsf/spot/AFD817D770AAD3B6CC25767D007DE7A1?Opendocument&HighLight=2,peak,stop)For Iles, there is a message here that resonates with his full-on schedule at CHH. "It just shows our team we can cope with a heavy workload and still have time to give to the community." Strengthen ICT engagement with the business Paul Nickels, partner, business assurance, PricewaterhouseCoopers NZ Everything is up for review and challenged constantly. This is the "new normal" for today's enterprises, says Paul Nickels, partner, business assurance at PricewaterhouseCoopers New Zealand. Nickels is referring to the McKinsey Report on the restructuring of the economic order and the constant change that lies ahead for everyone.So what will this mean for CIOs? "Get out of their office, connect more with their peers in the business, understand what is going to drive that change," says Nickels. The CIO's task now is to consider how, "they will engage more with the business," he says, and "how do they become a business partner and what areas of value do they see that they can add with their ideas."He says pressure is being placed on CIOs, and all parts of the organisation, as enterprises look at the value of operations and where they might drive costs down.So these types of engagement are important in the coming 12 months. CIOs have to be engaged in those upfront discussions on business strategy, he says. "The more they are engaged in those discussions, the better their ability to influence the direction and the better their ability to really execute what the organisation requires."There is, he points out, always a "strong healthy tension between IT and the business" that some call business alignment. This is manifested in CIOs whose portfolios have expanded to areas outside ICT. "I can think of a handful or organisations now where the CIO is part of the change agent group of the organisation, they are involved in all of the big projects."This is the space Nickels says CIOs should be working on in the next 12 months. It starts with having a bond with business peers. "There has got to be a level of respect for each other's disciplines," says Nickels. "You have got to understand the strengths of the parties and what they will bring."He says CIOs who have achieved this have made time for themselves and their teams to connect within the organisation. They are able to answers questions in regards to their IT spend, benchmarking and cost of service.He says PwC works with CIOs to create a "story board" discussion with their peers. The process enables CIOs to articulate their views on key questions such as, "What is going on in technology at this point in time and what is your plan and what do you plan to do? What has been in your agenda in the last period of time? Where are your areas of focus?"With a CIO's busy schedule, "there is often no time for self reflection". But Nickels says this exercise is important, and CIOs should be able to articulate these points to the business. CIOs who have already reached this stage can then take a closer look at the business model, and see where they can add value. "They need to be braver in experimentation, try new things, and be a little bit more agile."Those who have achieved this have the respect of their peers and their teams have a very commercial view and understanding of the business. "They know where the pain points are. They will be on top of those, and are in a position to offer alternatives and solutions."Throw out the old rules Peter Macaulay, principal, end user practice, IDC New ZealandThis will be a year of frustrating shifts and crazy trends, says Peter Macaulay, principal, end user practice at IDC New Zealand. "Most of the issues we have been grappling with will continue to demand attention, and in some cases evolve into fearsome monsters. Many will mellow and some will fade away," says Macaulay.Of these diverse issues, he picks up three fundamental shifts CIOs will be forced to adjust to -- mobility going "mad", CIOs being "kidnapped" by social networking and the CIO career path demanding attention."The evolution of the CIO into a more effective strategist will increase the risk/benefit spread in the ways that these shifts are addressed," he says.His views were shaped by his discussions with senior CIOs and industry visionaries, and the following IDC New Zealand ICT Top 10 Predictions 2010 (see IDCresearch.co.nz):

From an understood recession to an unknown future: Continued prudence amongst increased opportunities for 2010.

Consolidated buying to become the new government savings plan.

Deconstruction and reconstruction of the ICT industry for growth.

Use of ICT will become critical to CO2 reduction strategies.

The government's ultra-fast broadband initiative will need to be restructured.

Fibre for schools policy will put the use of ICT in education under the spotlight.

Technologies facilitating customer care and retention strategies will receive VIP treatment.

Mobility will enter a new growth curve.

The adoption of cloud computing will take baby steps amongst trophy wins.

2010 will see an increasing number of "managed business outcomes" contracts.

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