Who's In Charge?

In part 1 of CIO's exclusive State of the CIO survey, published in our April issue, we looked at the overarching results of the feedback we received from 257 CIOs and senior IT executives. Last month, in part 2, we explored CIOs' best - and worst - working relationships. In part 3, we take a look at CIOs' key responsibilities.

When Holden began its indirect procurement project, so clearly replete with potential for upending many of the company's processes and systems, CIO Julie Fahey immediately swung into communications mode.

At Holden, Fahey says, the CIO is very much responsible for providing the leadership around strategy for the company's information systems and services spend. That's the main reason she sits at the executive table where the strategic decisions are made and the operational reviews conducted. And a big and growing part of that strategic leadership entails educating the executive about the enterprisewide business process-enabling capability of IT, and creating in their minds the linkages between business processes and the information systems that enable their better integration for improved efficiencies in the business. So Fahey says she spends an increasing amount of her time making sure executives understand that IT is an enabler and that without defining the business process first, they won't necessarily get "bang for their buck on the IT stuff".

"In our indirect procurement project what we're actually looking at is the management processes, the operational processes and therefore the systems that will drive a single approach to managing our indirect commodities, services and products that we buy across the company," Fahey says. "So we sit down at a steering committee meeting and we talk about things like what is going on inside a vehicle operation versus what is going on inside the engineering, manufacturing and the experimental warehouse where we are purchasing for vehicle design. My role is to get up and explain why there is a common process. We might be talking about different products, different lead times, different suppliers, but actually we are procuring, and the business process to support all of those is the same process. Therefore the logic is that there is absolutely no reason why it can't be a single system."

Clearly that's the kind of plain talk executives at Holden appreciate. Fahey says she gets "a lot of heads nodding in the right direction" when she talks that way because the view is that she is talking in English rather than in "techo-speak".

A big part of effective business leadership is communicating in terms that people can understand, Fahey says.

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It's an assertion that would win nods of agreement from many of Australia's CIOs. In organisations across the nation, CIOs are increasingly being expected to act as business strategists almost as much as technologists. According to CIO's State of the CIO survey, Australian CIOs are for now still appraised more for their project performance - including their ability to deliver on time and within budget - than their business leadership, a contrast to the situation in the US, where two-thirds of those surveyed were compensated or evaluated primarily for their leadership and for making their companies profitable. But Australian CIOs are catching up, with leadership and demonstrated value playing a growing role in the demands companies put on their CIOs across organisations of all sizes.

That's certainly the way it is at Blockbusters, where IT director Steven Ash says IT is playing an increasingly important role in the overall business strategy. Ash is expected to take an active leadership role in delivering and supporting the overall goals and objectives of the company and to offer up ideas and solutions to issues or improvements across every department. He did both when - hamstrung by a head office-imposed mandate to retain an ancient point of sale system for at least the next couple of years - he advocated putting ADSL lines into every store and putting a PC into each so-called "manager's pit" to allow development of an intranet.

"Once that was there, it opened up a myriad of new ideas," Ash says. "It actually improved all-over company communications 10-fold. It also allowed us to roll out applications that we would not otherwise have been able to do, like an online payroll kiosk for the staff where all the information that they otherwise would have had to phone here to get or find in paper form, we could post on the intranet."

Ash says he loves the fact that in the business he finds himself in, his title might be IT director but he is heavily involved in all facets of the business and gets to learn much beyond IT. His compensation, meanwhile, is heavily tied to his performance, and particularly to how well or badly he is able to further the overall goals of the business.

"We as directors - and there's seven of us in this business - as a group are evaluated on the overall performance of the business at the end of a budget year, and that's based on revenue and cost," Ash says. "Of course I can't really control the revenue side, so my area of concentration would be to control cost and to provide solutions that are cost effective for the business. So it's managing my own budget, plus assisting others in keeping their own costs down by providing IT solutions."

CIOs say increasingly, being a business leader means getting involved in supporting the aims and aspirations of other parts of the business.

At Victoria's Alfred Hospital acting director IT Mark Gravell has an internal SLA on provision of services to the business, but is also providing guidance on project management and project governance for the entire organisation. Gravell says a UK-developed project methodology introduced by the IT group, which enabled its PACS (Picture Archiving and Communications System) to be delivered on time and on budget, has had enterprise buy-in and has been seen as very useful. "I think our strategic planning exercise shows the management and governance [capability] we've well developed down here, and that will probably be extended for other departments to use as a model, both on project management and potentially our strategic planning exercise," Gravell says.

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Measure for Measure

Some CIOs, meanwhile, have both qualitative and quantitative measures taken of their performance in the job, particularly as it relates to furthering the goals of the business. WorkCover Queensland general manager of IT Lynn Kincade says in her organisation, what gets done is only as important as how it is done.

Kincade's potential 20 per cent bonus each year is split 50/50 between corporate performance (what gets done) and personal performance (how it gets done). The corporate performance is driven by four corporate KPIs: the employee satisfaction survey results, the injured worker's satisfaction survey results, the employer satisfaction survey results, and what WorkCover calls a solvency rate. (If the organisation is 20 per cent over solvency it has more money on hand to use for compensation than it actually spends.)

"The 'what' is very qualitative," Kincade says. "It talks about budget; it talks about performance management, which is making sure your reviews get done; and it talks about corporate governance. I, too, measure satisfaction for the employee satisfaction within my division, and the satisfaction as rated by the other divisions in how we provide service to them, and the percentage of the strategies that are completed on time, or the work that is done on time. That is the 'what' that is done.

"The 'how' it is done is the competency, and that is where the business leadership comes in. That talks about communication, leadership, values, culture, personnel management, personal time management, integrity, respect . . . those types of things."

Effectively communicating advice is a big and growing part of the job for many CIOs. Kincade identifies four key pieces of her job. Top priority is being part an active member of the executive management team, and working with all other members of that team in ensuring all of WorkCover moves together to provide services for injured workers and other stakeholders. Her second highest priority is establishing and maintaining the culture within IT, a culture very much aligned around the key values of integrity, respect and responsiveness. "I believe if you have the values in the division where people respect each other, they have an enjoyable time at what they do, there's integrity in what's been done, and people are comfortable in the environment in which they work, they will naturally perform much better," she says. Next comes managing the strategies and the work that is actually done, making sure projects are on track and that there is a business case, and ensuring governance is respected.

Meanwhile, as with many other CIOs, responsibility for keeping systems running and being accountable for their performance is still very much a part of the territory, if an increasingly minute one. "The smallest component of my job is actually firefighting, and that's probably two per cent of my time," Kincade says. "It happens very rarely. We seem to have a rather mellow shop. Either we're not doing enough or everybody is pulling the wool over my eyes. There's very few times where we have an actual panic, so the firefighting is very, very small." As systems get more reliable, and CIOs better at building them, putting out fires is a consistent but diminishing part of their role.

At Charles Sturt University executive director IT Mike Rebbechi is assessed against compliance with the objectives outlined within the institution's triennial plan, but he says that is not such a tall order.

"I usually don't have too much trouble meeting those objectives," Rebbechi says. "Perhaps that's characteristic of the institution that we're in, where as Australia's largest distance education provider we're very focused on the online delivery and delivery of online services to students. Those are the items that come very high up on the priority list within the strategic plan. They're also very much in all the other business managers' strategic plans as well."

From Rebbechi's perspective it's a circumstance that ensures all the business leaders are heading in the same direction, and one that also makes his life relatively simple.

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Question of Performance

Our CIOs tell us how they perform, particularly their effectiveness in keeping IT budgets within forecast restraints, is a big and growing factor in their salary and performance appraisal. So is project performance, including ability to deliver on time and on budget. Leadership and the impact of their initiatives on the company are almost as important.

And that business orientation is very much reflected in how CIOs spend their time. For instance we caught RACV CIO Charles Burgess - who says the major factor in his salary and performance appraisal is his ability to meet the budget - right in the throes of planning for next year's budget. "The question of where I spend my time is an easy one to answer just at the moment," Burgess says. "The vast majority of my time currently is spent on my business plan and budgeting activities.

"There's a peak now leading into our management committee budgeting reviews. It's a normal budget cycle, but it's driven by the fact that because we sell our services internally we have to spend a lot of time negotiating with our businesses to get the volumes that they are going to consume of our services agreed. We then convert those into revenue and then work out our cost base to be able to meet that revenue target. That's a quite extensive set of activities that we go through at the RACV that I sort of 'drive' between March and the end of May."

Burgess says part of his leadership response to the exercise is to encourage and get the businesses to take ownership for their volume consumption of IT services. "We're going through the exercise at the moment for our management committee, and the management committee reviews and signs off the budget and makes whatever adjustments it sees appropriate, and then I manage it," he says. "I have got to say I don't find that too hard. It's time consuming, but it's not hard."

All in a Day's Work

When it comes to how they spend their days, Australian CIOs say managing IT staff takes up more of the time (29 per cent) than anything else, closely followed by communicating with other business executives (26 per cent). Understanding technologies (14 per cent) and interacting with outside business customers, partners and suppliers are the next most time-consuming parts of the role (13 per cent.) Talking to IT vendors takes up about 10 per cent of their total time.

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