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Page 1: Byron Bennett Jason Godefroid. Byron Bennett Jason Godefroid

Byron Bennett Jason Godefroid

Page 2: Byron Bennett Jason Godefroid. Byron Bennett Jason Godefroid

Byron Bennett Jason Godefroid

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What is the CIO’s Role?

Gartner Group’s definition of the role of the CIO

To “provide technology vision and leadership for developing and implementing IT initiatives that create and maintain leadership for the enterprise in a constantly changing and intensely competitive marketplace.”

Source: Grupe, Fritz H., Simon Joost, and Nilesh Patel, “Passing the Baton: Helping Your Successor to Succeed.” Information Systems Management, Spring 2003, p. 19.

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What is the CIO’s Role?As IT leaders, CIOs

• Devise and manage organizational arrangements to meet business needs

• Set goals and direction

• Influence perception of IT’s role and business value in an organization

• Establish relationship between business and IT at the executive level, help achieve “shared vision”

Source: Lacity, Mary C and Leslie P. Wilcocks, Global Information Technology Outsourcing: In Search for Business Advantage, John Wiley & Sons, Chichester, 2001, pp 252-253.

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Evolution of the CIO1960s• Director of Data Processing• Technical• Automating back-office functions• Little to no power, basement office (desk)

1970s• Management Information Systems (MIS) Director• Minicomputers appearing in more departments, network mainframes• MIS Director starting to gain some power

1980s• Chief Information Officer• Proliferation of the PC, “Control the chaos”• Companies saw the benefits of computer technology• CIO starting to be viewed as a valuable, high-level executive

Source: Melymuka, Kathleen, “35 Years of IT Leadership: The Evoluton of the IT Leader.” Computerworld, Sep 30, 2002. Vol. 36, Iss. 40;  pg. 28.

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1990s to today

• Client/server applications instead of mainframe, costs begin to rise

• CIO’s role as planner, architect, and budget manager reinforced

• Focus on “strategic plans, strategic architecture, networking, competitors and partners”

Source: Melymuka, Kathleen, “35 Years of IT Leadership: The Evoluton of the IT Leader.” Computerworld, Sep 30, 2002. Vol. 36, Iss. 40;  pg. 28.

1960s Today

DP Director CIO (or some C-title)

Support player Senior Executive

View of IT as internal View of IT aligned with business’ world view

“Geek among propeller heads” Speaks business to business leaders

Evolution of the CIO

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Common CIO Titles

Source: Cosgrove Ware, Lorraine, “What You Have to Say – Survey Results.” CIO Magazine, Apr 1, 2003, www.cio.com/archive/040103/results.html, viewed October 1, 2003.

• In the CIO survey, 73% of respondents had Chief-level titles, 35% had solely CIO titles.

CIO & Executive Vice President, 1%

Other, 26%

CIO & Vice President

17%

CIO & Senior Vice President

15%

Chief Technology Officer

5%

CIO36%

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To Whom Do CIOs Report?

Source: Cosgrove Ware, Lorraine, “What You Have to Say – Survey Results.” CIO Magazine, Apr 1, 2003, www.cio.com/archive/040103/results.html, viewed October 1, 2003.

• In the CIO survey, 47% of respondents report directly to the CEO

COO, 8%

Corporate CIO, 7%

CFO, 22%

Other, 15%

CEO, 47%

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How Do CIOs Spend Their Days?• Time allocation per day

Source: Cosgrove Ware, Lorraine, “What You Have to Say – Survey Results.” CIO Magazine, Apr 1, 2003, www.cio.com/archive/040103/results.html, viewed October 1, 2003.

Managing staff, 24%

Developing leadership

within department,

13%

Other, 37%

Meeting with senior executives

and department heads, 26%

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Budgets and Staff• 2002 survey of IT leaders, 388 respondents

Source: “Here’s Looking at You: Demographics of the 2002 ‘State of the CIO’ Survey,” CIO Magazine, Mar 1, 2002, www.cio.com/archive/030102/demographics.html, viewed October 20, 2003.

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

< 100M $100M -$499M

$500M-$999M $1B-$4.9B $5B-$10B

IT Budget as Percent of Total Revenue

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Budgets and Staff• 2002 survey of IT leaders, 469 respondents

Source: “Here’s Looking at You: Demographics of the 2002 ‘State of the CIO’ Survey,” CIO Magazine, Mar 1, 2002, www.cio.com/archive/030103/demographics.html, viewed October 20, 2003.

Average users: Average IT staff: Average % of users:

5,34878

1.5%

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Top Priorities of Today’s CIOs• According to recent Gartner survey of 620 CIOs and IT executives, the top priorities

of today’s CIOs are:

Source: Hoffman, Thomas, “Gartner survey finds continued CIO focus on cutting costs,” Computerworld, Mar 17, 2003, p. 13.

Providing IT guidance to senior corporate

executives

Demonstrating the business value of IT

Improving the internal governance of IT

operations

Taking steps to reduce IT costs

Developing or outsourcing corporate IT architectures

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CIO Gender Statistics

2003

Male 87%

Female 13%

2002

Male 91%

Female 9%

1

2

Sources:1. “The 2002 State of the CIO. ‘Here’s Looking at You’.” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/030102/demographics.html >2. Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html >

N: 539

N: 500

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IT Gender Gap Widens

Of all IT executives over age 40, female executives account for 16.4%. Only 7.8% of IT leaders under age 40 are female.

Overall IT Gender Gap Widening Again

Factors Attributing to Decrease in Female IT Leaders• Economic downturn.• Fewer young women choosing IT careers - 41% in 1996, 34.9% in 2002.• Significant numbers of women exiting corporations to start own businesses. Now account for nearly 50% of privately owned US businesses.

Source: D’Agostino, Debra. “Where are All the Women IT Leaders?” CIO Insight. October 1, 2003. Website as view on October 26, 2003. < http://www.cioinsight.com/article2/0,3959,1309515,00.asp >

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Professional ExperienceI nfluential J obs Held During Career

82%

34%

25%

20%

17%

17%

15%

14%

13%

12%

11%

11%

12%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

IT

Consulting

Administration

Engineering

R&D

Customer Service

Accounting

Finance

Production

Marketing

Logistics

Sales

Other

N: 539

Source: Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html >

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Position Held before CIOConsultant

16%

I T Manager63%

Business Manager

21%

Source: “The Role of the CIO.” CIOInsight.com. February, 2003. As viewed on October 30, 2003 <http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >

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Tenure as CIO

• Average time as CIO: 4 years, 9 months

Tenure as Head of IT

0% 10% 20% 30% 40% 50%

< 2 Years

Between 2 and 5

Between 5 and 10

> 10 Years

Source: Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html >

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CIO CompensationCompensation by Industry

$223,897

$220,833

$209,574

$201,786

$176,769

$126,172

$120,437

$0 $50,000 $100,000 $150,000 $200,000 $250,000

Insurance

Finance

Computer-related

Medical/health care

Manufacturing

Education

Government

Sources:• Ware, Lorraine Cosgrove. “The State of the CIO 2003,” CIO.com. As viewed on October 26, 2003. < www.cio.com/archive/040103/results.html >2. “The Role of the CIO.” CIOInsight.com. February, 2003. 1. As viewed on October 30, 2003.

< http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >3. George, Tischelle, Eileen Colkin, and Larry Greenemeier. “Big Bucks Dry Up.” InformationWeek.com. April 29, 2002.

<http://www.informationweek.com/story/showArticle.jhtml?articleID=6501877>

• Average CIO Total Compensation: $167,242

2

1

N: 279

N: 539

InformationWeek found that the economic downturn reduced compensation for IT managers by 8% and by 11% for IT staff in 2002.

Economy Hits IT Compensation 3

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CIO Skills & PersonalityTechnical Skills vs. People Skills

• In their study, Enns, Huff, and Golden challenge the conventional wisdom of organizational socialization theory that predicts significant differences in the influencing behaviors used by less technical and more technical CIOs.1

• By narrow margins, Enns found the following behavioral patterns:– Lesser technical CIOs use “hard” influencing behaviors: coalition, legitimization,

pressure (Greater technical CIOs use the hard behavior: exchange.)

– Greater technical CIOs use “soft” influencing behaviors: consultation, inspirational appeal, personal appeal (Lesser technical CIOs use the soft behavior: ingratiation.)

60% of CIOs at large companies are EXTROVERTS!2

WHY?Enns offers possible reason: “…top executives may not rise to the top without having the ability to utilize influence behaviors.”

Sources:1. Enns, Harvey G., Sid L. Huff, and Brian R. Golden. How CIOs Obtain Peer Commitment to Strategic IS Proposals: Barriers & Facilitators. (2000): 6-7. < http://www.sba.udayton.edu/cio_influence/CIO Tech Back IBs-2.pdf >2. “The Role of the CIO.” CIOInsight.com. February, 2003. 2. As viewed on October 30, 2003.

< http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >

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CIOs Take the Personality Test

MYERS-BRI GGS: CI O DI STRI BUTI ON

1.6%

9.7%

25.8%

12.9%

1.6%0.0%

4.8%3.2%

1.6%3.2%

11.3%

6.5%

0.0%1.6%

11.3%

4.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Extrovert/IntrovertSensing/IntuitionJudging/PerceivingThinking/Feeling

Source: “The Role of the CIO.” CIOInsight.com. February, 2003. 2. As viewed on October 30, 2003. < http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >

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Factors in Attaining Peer Commitment

• Environment:– Industry - information reliant (e.g. Finance) vs. material product based

(e.g. Petroleum)

– Vision for IT - IT as Cost Center vs. IT as Transformer

– Centralization - centralized vs. decentralized

• Consistency of Proposals with business strategy

• Peer relationships - effective relationships– Educate peers about strategic value of IT (consultation behavior)

– Build relationships, partnerships, and networks

Enns, Huff, and Golden’s study on how CIOs attain peer commitment for IT projects revealed key factors that CIOs must manage:

Financial services CIO: “. . . IT was considered a cost center. However, due to my relationships with others in the organization, and my track record of delivering on projects, IT is now considered an Investment Center.”

1

Source: Enns, Harvey G., Sid L. Huff, and Brian R. Golden. How CIOs Obtain Peer Commitment to Strategic IS Proposals: Barriers & Facilitators. (2000): 6-7. < http://www.sba.udayton.edu/cio_influence/Barriers and Facilitators.pdf >

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22Source: Enns, Harvey G., Sid L. Huff, and Brian R. Golden. How CIOs Obtain Peer Commitment to Strategic IS Proposals: Barriers & Facilitators. (2000): 6-7. < http://www.sba.udayton.edu/cio_influence/Barriers and Facilitators.pdf >

CIO’s peer: “The CIO is driven into seclusion if (his/her) focus is just the technology. You are at risk because a technology focus is not where the business units reside.”

• Peer Background Accommodation– Speaking the peer’s language - non-technical vs. technical

– Consultation (seeking peers participation) - peers with tech background: resistance; peers with lesser tech background: commitment.

• Reason - technical peers view consultation as sign that CIO is unprepared.

– Ingratiation - peers with tech background: resistance; peers with lesser tech background: commitment.

• Reason - technical peers seek the rationale and content of proposals. Other behavior is viewed as superfluous and irritating.

• Implementation: Keys for Success– Top-Down support - managers at top tier support project and ensure their

subordinates actively support the project.

– Stakeholder support - critical that project has support of stakeholders.

Factors in Attaining Peer Commitment

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CIOs Rank Skills for SuccessSkills for CIO Success

42.9%

40.8%

37.0%

33.9%

23.5%

22.2%

19.4%

18.9%

15.5%

14.7%

14.7%

8.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Leadership ability

Business understanding

Work with corporate execs

Communication skills

Execution

Strategic thinking

Analytical ability

Handle stress

Interpersonal skills

Technological acumen

Problem solving

Personal integrity

N:385

Source: “The Role of the CIO.” CIOInsight.com. February, 2003. 3. As viewed on October 30, 2003. < http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >

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How are CIOs EvaluatedPerformance Evaluation

42.3%

23.4%

11.9%

11.4%

5.7%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Contribution toachieving bus. strat.

Operationalperformance

Financialperformance

Interaction withpeers, superiors,

subs

Project completion

Source: “The Role of the CIO.” CIOInsight.com. February, 2003. 2. As viewed on October 30, 2003. < http://common.ziffdavisinternet.com/download/0/1900/0123_research.pdf >

N:385

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Gartner Divines Future of CIO“The CIO is facing a real prospect of becoming a

‘zero-budget CIO’ by the end of the decade.” - John Mahoney, Gartner Group

• Business refocuses on profits and returns to core competencies

• IT departments are challenged to “define and deliver a sustainable value proposition”

- Value in “leadership and service integration,” not in creation of technology

• Gartner’s “CIO Success Cycle”–Lead: CIOs must use their access to the organization to network with key personnel and gain influence and leadership as the IT solution provider.

–Shape Demand: CIOs must come to understand their company’s business in order to provide effective input on technology demands.

–Set Expectations: CIOs must lead executives to realistic expectations for projects, and offer realistic alternatives when necessary.

–Deliver: CIOs must form internal and external partnerships that enable them to meet the demands of business changes.

Source: Anonymous, “Gartner Predicts ‘Zero-Budget’ CIO.” Information Management Journal. July/August, 2002: 8.

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Case Study

Corporate Background• Sisters of Mercy founded nearly 200 years ago by Catherine

McAuley. Sisters of Mercy religious communities around the world.

• Sisters of Mercy Health System (SMHS), founded in 1986, consists of facilities in seven states with 27,800 co-workers and 4,000 physicians. Also includes health, dental and vision insurance plans and is organizing its own Group Purchasing Organization

• SJMHC is a regional Strategic Service Unit (SSU) of SMHS

• SJMHC includes St. John’s Mercy Medical Center (St. Louis), St. John’s Mercy Hospital (Washington), Mercy Medical Group, Unity Health Services

• SJMHC includes 8,037 co-workers, 1,293 physicians

• Provides healthcare to St. Louis community and missions to other countries

St. John’s Mercy Health Care CIO Dewey Freeman

Catherine McAuley

Source: Information courtesy SJMH community relations department

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Case Study

SJMHC Organization

St. John’s Mercy Health Care CIO Dewey FreemanPresident/CEOPresident/CEO

SJMHCSJMHCMichael MorganMichael MorganChief Operating OfficerChief Operating Officer

SJMHCSJMHCMark StauderMark Stauder

PresidentPresidentUHSUHS

Wayne DiewaldWayne Diewald

PresidentPresidentMMGMMG

Tom Hale, M.D.Tom Hale, M.D.

EVP/CFOEVP/CFOSJMHCSJMHC

Randy CombsRandy Combs

PresidentPresidentSJMHSJMH

Michael ZilmMichael Zilm

Chief Nurse ExecutiveChief Nurse ExecutiveSJMMCSJMMC

Chris Crain, R.N.Chris Crain, R.N.

VP Medical AffairsVP Medical AffairsSJMHCSJMHC

Paul Hintze, M.D.Paul Hintze, M.D.

Vice PresidentVice PresidentSJMMCSJMMC

Patrick Christiansen, Ph.D.Patrick Christiansen, Ph.D.

Vice PresidentVice PresidentSJMHCSJMHC

Denny HolterDenny Holter

Vice PresidentVice PresidentSJMMCSJMMC

Wayne DiewaldWayne Diewald

Senior Vice PresidentSenior Vice PresidentMMGMMG

John HermannJohn Hermann

Vice PresidentVice PresidentSJMHCSJMHC

Sr. Barbara Grant, RSMSr. Barbara Grant, RSM

CIOCIOSJMHCSJMHC

Dewey FreemanDewey Freeman

Vice PresidentVice PresidentSJMHCSJMHC

Ron TruloveRon Trulove

Chief Contracting OfficerChief Contracting OfficerSJMHCSJMHC

Curtis ThompsonCurtis Thompson

Vice PresidentVice PresidentSJMHCSJMHC

Robert RuelloRobert Ruello

Vice PresidentVice PresidentSJMHCSJMHC

Sheri BeekmanSheri Beekman

Source: Information courtesy SJMH community relations department

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Case Study

SJMHC Organization

St. John’s Mercy Health Care CIO Dewey FreemanPresident/CEOPresident/CEO

SJMHCSJMHCMichael MorganMichael MorganChief Operating OfficerChief Operating Officer

SJMHCSJMHCMark StauderMark Stauder

PresidentPresidentUHSUHS

Wayne DiewaldWayne Diewald

PresidentPresidentMMGMMG

Tom Hale, M.D.Tom Hale, M.D.

EVP/CFOEVP/CFOSJMHCSJMHC

Randy CombsRandy Combs

PresidentPresidentSJMHSJMH

Michael ZilmMichael Zilm

Chief Nurse ExecutiveChief Nurse ExecutiveSJMMCSJMMC

Chris Crain, R.N.Chris Crain, R.N.

VP Medical AffairsVP Medical AffairsSJMHCSJMHC

Paul Hintze, M.D.Paul Hintze, M.D.

Vice PresidentVice PresidentSJMMCSJMMC

Patrick Christiansen, Ph.D.Patrick Christiansen, Ph.D.

Vice PresidentVice PresidentSJMHCSJMHC

Denny HolterDenny Holter

Vice PresidentVice PresidentSJMMCSJMMC

Wayne DiewaldWayne Diewald

Senior Vice PresidentSenior Vice PresidentMMGMMG

John HermannJohn Hermann

Vice PresidentVice PresidentSJMHCSJMHC

Sr. Barbara Grant, RSMSr. Barbara Grant, RSM

CIOCIOSJMHCSJMHC

Dewey FreemanDewey Freeman

Vice PresidentVice PresidentSJMHCSJMHC

Ron TruloveRon Trulove

Chief Contracting OfficerChief Contracting OfficerSJMHCSJMHC

Curtis ThompsonCurtis Thompson

Vice PresidentVice PresidentSJMHCSJMHC

Robert RuelloRobert Ruello

Vice PresidentVice PresidentSJMHCSJMHC

Sheri BeekmanSheri Beekman

IT and SJMHC

• IT department employs 131 co-workers, 1.63% of the SJMHC workforce

• FY ’04 operating budget of $7.1M, 1.1% of total FY ’03 SJMHC operating revenue

• SMHS ranked by Information Week as one of top 500 most wired companies, ranking 13th among organizations in healthcare, 213th overall

• SMHS named as one of nation’s most wired health systems by Hospitals & Health Networks magazine, a publication of the American Hospital Association

Dewey Freeman

Source: Information courtesy SJMH community relations department and SJMHC finance and IT departments

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Case StudySt. John’s Mercy Health Care CIO Dewey Freeman

Source: Information courtesy SJMH community relations department and SJMHC finance and IT departments

IT and SJMHC

• IT department employs 131 co-workers, 1.63% of the SJMHC workforce

• FY ’04 operating budget of $7.1M, 1.1% of total FY ’03 SJMHC operating revenue

• SMHS ranked by Information Week as one of top 500 most wired companies, ranking 13th among organizations in healthcare, 213th overall

• SMHS named as one of nation’s most wired health systems by Hospitals & Health Networks magazine, a publication of the American Hospital Association

Dewey Freeman

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Case Study

Background

• Dewey Freeman, CIO of SMHS and SJMHC for one year

• 16 years of CIO experience:– 12 years CIO at Baptist Health, Little Rock, Ark.

– 3 years at Fairfield Resorts

– 1 year in current position

• Previously industrial engineer at Baptist Health

• Degree in Industrial Engineering and MBA

St. John’s Mercy Health Care CIO Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

Dewey Freeman

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Case Study

How does Dewey spend his day?

• Arrive at work around 7:00 a.m

• Ninety percent of day consists of communication – Day of interview, he was talking on his cell-phone all the

way in from the airport

– Meetings

– Conference Calls

– Participating in planning for future projects

– Status reports

• Small part of day may be to deal with any arising crises– Work with vendor(s) to make sure process works

– Sometimes vendor motivations are different than the organization’s

• Leave work around 6 p.m. or so.

St. John’s Mercy Health Care CIO Dewey Freeman

Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

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Case Study

To whom does Dewey report? Relationship with CEO

• In SJMHC role, reports to Chief Financial Officer, Randy Coombs

– Communicates daily with Randy

• In SMHS role, reports to Sisters, though budget belongs to SJMHC

• Different sets of issues between SJMHC and SMHS

• Has a good relationship with CEO, Mike Morgan– Doesn’t communicate daily

– Plays golf with Mike

St. John’s Mercy Health Care CIO Dewey Freeman

Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

Page 33: Byron Bennett Jason Godefroid. Byron Bennett Jason Godefroid

33

Case Study

Biggest challenges• “The biggest challenge is trying to align the IS organization with the business

goals of the organization”– Current SMHS/SJMHC strategy based around patient safety

• Barcodes to enter info instead of manual computer entry

• Computer Physician Order Entry (CPOE) wireless technology

• BRIDGE pharmacy project Drug and patient barcoding to prevent drug errors

– Not only IS goal, but end-user goal

• Achieving end-user buy-in• Making people understand IT is a tool to achieve organizational objectives• Shorter life cycles By the time you research, buy, test and so on, the needs

have already changed

St. John’s Mercy Health Care CIO Dewey Freeman

Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

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34

Case Study

What keeps Dewey up at night?

• After so many years and what he’s seen, not much keeps him up at night.

• Having reliable systems, especially in healthcare setting

St. John’s Mercy Health Care CIO Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

Dewey Freeman

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35

Case Study

Most successful project under Dewey’s leadership

• Baptist Health, 1996-99– Implementation of Clinical Information Systems

• Computer order entry, alerts• Documentation system• Digital documents printed to an image• Information flowed to different forms

– Learned how to build a team– Learned the importance of having buy-in from the end-user and that you need a champion on

the user’s end– “IS is uniquely qualified for project management, but we’re not clinical. We need input from

the end-user. Only the end-user can decide what’s needed.”– “Without the end-user, IS is like a hammer sitting on the table: We’re just a tool waiting to be

used.”

St. John’s Mercy Health Care CIO Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

Dewey Freeman

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36

Case Study

Most troublesome project under Dewey’s leadership #1• Large, unnamed Baptist Health hospital

– Tried to implement a materials control package for the surgery department

– Good concept driven by IS and Materials Management, but Surgery didn’t take ownership, showed passive interest, no buy-in

– Idea was to barcode each supply item to track item usage

– Problems were• Labor to break open packages and barcode• Once package was opened, items couldn’t be returned to vendor. In the OR setting,

items are frequently returned.

– $500,000 project never implemented

– No input from the end-user on practicality of system

St. John’s Mercy Health Care CIO Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

Dewey Freeman

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37

Case Study

Most troublesome project under Dewey’s leadership #2• Another Baptist Health hospital

– Tried to implement a computerized tray line system, similar to McDonald’s, in the Dietary department

– Idea was to enable staff to complete a patient meal tray every six seconds instead of five or fewer trays a minute

– System crashed at high speed, reliable at five to six trays per minute– Frustrating to staff and patients– Went back to manual process– $100,000 project

St. John’s Mercy Health Care CIO Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

Dewey Freeman

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Case Study

Dewey on the role of IT in healthcare

“IT enables processes that bring value to organizations by either improving patient safety, improve the ability to communicate about a patient, to help efficiently run the business, and to improve the productivity of the workforce.”

St. John’s Mercy Health Care CIO Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

Dewey Freeman

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Case Study

Dewey on the role of IT in healthcare

• IT is both commodity and strategic– Strategic in what it’s used for to provide a competitive

advantage

– Commodity in the tools to accomplish strategic initiatives

St. John’s Mercy Health Care CIO Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

Dewey Freeman

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Case Study

Dewey on the role of IT in healthcare

• Tools vs. Toys– Having a well-defined strategy will help decide what’s a toy and what’s

a tool– Maturity of technology and the ability of technology to help

organization meet its goals vs. latest fad– Pay a little extra if early adopter; Dewey prefers to be a little off the

“bleeding edge”– Too important for it to work than to have the latest gadgets– “If you’re out on the edge, you get gray hairs; if you’re over the edge,

you go bald.”

St. John’s Mercy Health Care CIO Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

Dewey Freeman

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Case Study

Dewey on the role of IT in healthcare

• Healthcare in general lags behind other industries due to the resources applied to it

• Three percent of total expenses invested in IS (SJMHC is 1%), while other industries invest at least 10-12%

– Healthcare fairly regulated, and technology dollars tend to center around treatment (new medical equipment)

St. John’s Mercy Health Care CIO Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

Dewey Freeman

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Case Study

Dewey on the role of the CIO in an organization

“The CIO should be looked at as a person who can communicate with leaders of an organization about his vision. A CIO must be a spokesperson for use of systems to accomplish business objective, be a spokesperson for innovation, taking IT from its current level to a new one. The CIO must be a visionary leader.”

St. John’s Mercy Health Care CIO Dewey Freeman

Source: Freeman, Dewey, CIO of Sisters of Mercy and St. John’s Mercy Healthcare, interviewed in person by Jason Godefroid, October 11, 2003.

Dewey Freeman

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Case Study

Company History

• 1869 - founded by inventor Elisha Gray and entrepreneur Enos Barton as Gray & Barton.

• 1872 - became Western Electric Co., supplying telegraph components to Western Union Telegraph.

• Upon invention of telephone, became exclusive manufacturer of telephone equipment for Bell System.

Graybar CIO - Beatty D’Alessandro

• 1925 - spun of electrical distribution business which became Graybar Electric Company, Inc..

• 1929 - employees bought Graybar.

• 1982 - Graybar’s Corporate headquarters moved to St. Louis from its home in the Graybar Building above New York City’s Grand Central Terminal.

• 2003 - Graybar Electric Company rebrands itself as Graybar to deemphasize the electrical aspect of its business and refocus public view on its supply-chain management capabilities.

Source: “Company History.” Graybar Electric. 2003. 5 Nov. 2003 http://www.graybar.com/aboutus/gbhistory.html.

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Case StudyGraybar CIO - Beatty D’Alessandro

Corporate Information

• 2003 projected revenues: $3.8B

• Distribution facilities: 280

• Employees: 7500+

• Employee owned: >50% of stock in hands of retirees

• Primary customers: electrical and voice/data contractors, commercial and industrial firms, tel-coms, power utilities, and government entities.

• Distributes for 4200+ manufacturers of electrical, comm/data, and networking products

Source: “Company Profile.” Graybar Electric. 2003. 5 Nov. 2003 http://www.graybar.com/aboutus/default.html.

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Case StudyGraybar CIO - Beatty D’Alessandro

Rankings and Recognition

• #1 on Electrical Wholesaling’s 250 largest electrical distributors (2002)

• #3 on Business Week’s list of private U.S. info-tech companies (2002)

• #21 on Forbes’ ranking of to 25 private U.S. Companies (2002)

• #344 on 2003 Fortune 500 ranking of largest US companies (2003)

Source: “Company Profile.” Graybar Electric. 2003. 5 Nov. 2003 http://www.graybar.com/aboutus/default.html.

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Case StudyGraybar CIO - Beatty D’Alessandro

History of Graybar IT

• 1970s - Graybar computerizes its sales system.

• Mid-late 1980s - Graybar builds homegrown system encompassing: Order Entry, Purchasing, Payables, and Receivables. No integration with accounting.

• Late 1980s - Accounting moved their manual system to PCs.

• 1998 - Accounting implemented mid-tier accounting system, Clarus.

• 2000 - Legacy system is reaching maximum capacity. Graybar begins search for replacement. Determines to pursue ERP. Contenders: JD Edwards, Oracle, and SAP

• 2001 - Graybar holds Proof-of-Concept for SAP. Will be largest wholesale distributor to implement this software primarily designed for manufacturing.

• 2003 - SAP go-live. Sales and Logistics systems roll out. Finance & HR go “big-bang.”

Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

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Case StudyGraybar CIO - Beatty D’Alessandro

Graybar IT• Mission:

– “Provide the solutions that the business and our customers need in a rapid and cost effective way. It’s our job!”

• Staffing: – Currently in rollout phase of ERP implementation: 280

employees in IT, including consultants.– Staffing should reduce by 15-20% after rollout.– 3.7% of total Graybar employees.

• IT Budget:– 2003 - $55M.– 1.5% of total Graybar 2003 revenue.

Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

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Case StudyGraybar CIO - Beatty D’Alessandro

Background• Beatty D’Alessandro, CIO of Graybar for one year

• 3 years as Vice President over ERP

• 2 years as Director of Strategic Planning– Led mergers and acquisitions projects

• 15 years of Treasury and Financial Management experience– District Financial Manager– Treasury Manager at Corporate– Field financial management positions

• Education– B.A. in Finance and Marketing– MBA with emphases in Finance and Organizational Design

Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

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Case StudyGraybar CIO - Beatty D’Alessandro

• Managing IT Operations - 40%– Aligning the vision for IT with

Graybar’s objectives

– Ensuring resources are available

– Making tactical decisions

• Managing Outside Relationships - 30%– Meeting and communicating with IT

vendors and partners– Visiting Graybar customers

• Non-IT Related Issues - 30%– As member of executive team, deals

with issues that affect the company at large (e.g. advises on Zone organization, new brand, financial arrangements).

Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

Managing IT Operations

40%

Managing Outside Relationships

30%

Non-IT Related Issues30%

How does Beatty spend his Time?

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Case StudyGraybar CIO - Beatty D’Alessandro

To whom do you report? Relationship with CEO.

• Graybar’s CIO reports directly to the CEO, Robert Reynolds.

• Beatty’s relationship with Bob has been close throughout ERP project– The sheer cost of ERP and its potential to negatively impact business hold

keen interest for Bob and the other members of the executive team.

• Communication with CEO

– Talks with Bob about twice a week under normal circumstances.

– Exchanges email 4-5 times a week.

– Exchanges are initiated by CEO 50% of time.

Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

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Case StudyGraybar CIO - Beatty D’Alessandro

Biggest Challenges

• “Keeping the funding for a huge technology project from being shut off while the economy tanked. That was the biggest challenge of my career!” Beatty D’Alesandro. “Could have been a career killer for me...”

• Engaging business leaders and personnel in a project.

– Getting business to engage in a project.– Keeping business engaged throughout project.– Ensuring that business remains engaged with the result after

project is complete.

• Personnel issues.

Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

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Case StudyGraybar CIO - Beatty D’Alessandro

What keeps Beatty awake at night?

• Preparing for SAP go-live.– “Was there some major blunder that would have catastrophically affected the company?”

– When you implement SAP, you don’t want that to be front page news on the Wall Street Journal.

• There is background “buzz” of tension everyday that something might go wrong and cause disruption of business.

– Likely areas:• Applications• Network• Email• Hardware

Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

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Case StudyGraybar CIO - Beatty D’Alessandro

Most troublesome project under Beatty’s leadership?

• SAP has been only major project since becoming CIO

• Areas of difficulty:– Long term project. Requires great stamina and ability to live with stress.

– Cost lots of money. Major feat to keep funding flowing during bad economy. Presentations, reports, assurances to steering committee just to keep going.

– Business disruption. Tremendous resources required through all phases of project and most of these people have another full-time job.

– Unable to determine degree of success until at least a year after up and running.

– Huge resistance to go-live. Fears that not enough testing had been done.

– Large discontent for 2 months after go-live. Not enough training.

Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

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Case StudyGraybar CIO - Beatty D’Alessandro

Biggest success under Beatty’s leadership?

• Again, SAP has been only major project since becoming CIO

• Does not consider project a success at this point. Rather it is a partial success thus far.

• The question that the interviewer didn’t ask: “Would you do it again?”– “I would. The challenge of it, ability to grow, learn new

things, change your perspective, (these have made it the) most challenging and fulfilling three years of my professional life,” Beatty D’Alessandro.

Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

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Case StudyGraybar CIO - Beatty D’Alessandro

Beatty on IT’s role within Graybar

• With the advent of ERP at Graybar, IT now holds higher status within the organization than at anytime in prior history.

• Beatty’s goal is for IT to become invisible to the organization.– The tools of IT should be as commonplace as the telephone on your desk. It’s

there, you need it and use it to do your job, but you don’t think about it, aren’t afraid of it, don’t even really see it.

– The people in the IT organization are no longer an island of people outside

the real business, but are involved in the business, solving business problems.

– “What I hate to hear coming out of our mouths is, ‘We can’t do that.’ I want us to say, ‘We have the functionality to do that. It will take 5 months, 8 people and $75K. Is it worth it to you to pay for that?” Beatty D’Alessandro.

Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

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Case StudyGraybar CIO - Beatty D’Alessandro

What would Beatty look for in a successor?

• Ability to strike balance between strategic and tactical focus.– Strategically, must be the pathfinder to keep the company technologically alive and

dynamic.– Tactically, must keep the information factory running.

• Understanding of organizational politics.– Must have broad enough view to understand the political effects of decisions

throughout the organization.

• Ability to align IT organization with the goals and initiatives of the business. – “My technology doesn’t make any money for me. It has to make money for Giglio

(Sr. VP Operations), Udell (Sr. VP Electrical Sales), and DeSousa (Sr. VP Sales and Distribution). If it doesn’t, why would you give me any money?” Beatty D’Alessandro.

Source: D’Alessandro, Beatty, CIO of Graybar, interviewed in person by Byron Bennett, October 17, 2003.

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Questions??