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THE MODERN CIOWhat businesses that want to grow need to know

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CONTENTS

Introducing the Modern CIO 3

Why do you need a CIO to grow your business? 5

Who is providing strategic IT leadership in your business? 8

Establishing value and defining your CIO’s KPIs 10

The changing role of the CIO 12

When should you hire a CIO? 14

Get the benefits of a CIO without the cost 16

Top tips for hiring the right executive for your business 17

Summary 19

Here to help 20 2

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INTRODUCING THE MODERN CIO

A Chief Information Officer (CIO) is the corporate executive in charge of information technology (IT) strategy and implementation. They need to be able to provide high-level strategic direction, keep up with the rate and pace of technology change and how it contributes to your business strategy, goals and systems. Over the last 20 years there has been dramatic change in the modern firm’s adoption of technology. The intensity of competition has increased and the role of the CIO has changed from chief trouble-shooter relegated to dark back office activity, to that of an equal on the executive team and in the board room.

Through this change another trend has emerged; that of a Virtual CIO (vCIO). A vCIO is essentially an outsourced resource that would perform as many, or as little, elements of the CIO role necessary dependant on the requirements of your business. More about this later but keep it in mind while you read the rest of this eBook.

CIOs have changed and businesses that have recognised this lead their peers in almost all rankings.1

1. https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/why-cios-should-be-business-strategy-partners

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What does a CIO do?

An empowered CIO operates at a high level, is a business leader and can translate between technical jargon and business strategy. To help define the CIO role, it’s important to look at the other roles that form the IT function:

INTERNAL SUPPORT ENGINEERAn Internal Support Engineer predominantly looks after existing systems, following existing support processes. They are typically the first point of call for users and are sometimes referred to as IT Admins. More often than not, they are supported by external IT experts or providers. If you have an established business with a predicable IT workload, an Internal Support Engineer can make financial sense compared to an outsourced service.

IT MANAGERAn IT Manager can do everything an Internal Support Engineer can do (skillset dependent). The difference is they have more knowledge, may hold budget line responsibility (or at least have input) and give managers insight into technology performance and opportunities.

CIOA Chief Information Officer operates at a strategic level, translating the business goals, contributing to the strategy and scanning the tech horizon for opportunities. They don’t just provide advice and analysis; they can also implement new practices and processes. They work with external stakeholders, such as your cyber security advisors, as well as your Board of Directors and Auditors. They also aid in one-off projects, such as mergers or acquisitions. Essentially, they provide strategic analysis as well as advisory support on all technology matters across all departments in your business.

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EXAMPLE

Rolling out Microsoft Teams (part of Microsoft Office365) is a good example where technology intersects with People and Culture (much better term than HR don’t you agree?), IT and the business units within the company. Recognising that it’s the soft skills that build effective teams, as much as the actual technology used to support teams, is a key differentiator between those who implement IT, those who just ‘manage it’, and those who help firms truly transform.

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Having a CIO might be seen as a luxury for a growing business. The question that needs to be asked is, if you want to grow your business can you afford not to have one?

Four of the big benefits a CIO will bring to your business:

1. INSIGHTActionable insights are the lifeblood of successful business and your CIO should be an active contributor. They can take vast amounts of data and turn it into actionable insights through implementing tools like Microsoft PowerBI. Your IT Manager may be able to give you some basic reports, but your CIO is the one who can use those reports to identify the strengths and weaknesses of your business, now and in the future. Actionable insights don’t just identify problems and produce reports, they provide plans and ideas on how to fix them.

Without a CIO, you are missing out on better insights.

WHY DO YOU NEED A CIO TO GROW YOUR BUSINESS?

DATA

INFORMATION

ANAL

YSIS

ACTI

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NABLE INSIGHTS

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2. STRATEGYStrategy is about making deliberate choices, not letting things happen organically. A CIO will be skilled in measuring both lag measures and lead measures that enable you to forecast possible pain points in the future. They will not only help you and the executive team set goals, they will also develop plans to help you achieve them. While a CIO has responsibility for technology, they are also strategists looking ahead to avoid pitfalls and pounce on opportunities.

Without a CIO, you are missing out on better strategy.

3. EXECUTIONWithout execution, strategy is just a dream. In today’s environment, we need teams to be able to approach complex problems that cut across multiple business units and customer segments to execute change. Execution is hard, but a CIO can cut across the pain points of IT and rally the troops to deliver business outcomes. McKinsey has identified the next generation operating model as a key feature of successful digital execution in many modern businesses. The model is based on continual improvement of the end-to-end customer journey and business process, achieved through an integrated application of advanced technology and systems.

Without a CIO, you are missing out on better execution.

Further reading: Read this Harvard Business Review article on execution – Execution is a people problem not a strategy problem 6

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4. PARTNERSHIPSFinally, possibly the biggest difference between a CIO and other technology professionals is that they can effectively communicate with all stakeholders that form your business and operations. Through their expertise in both technical and soft skills, they improve relationships internally and externally. Successful firms leverage both internal resources and external resources – especially when they recognise they cannot be great at everything.

Without a CIO, you are missing out on better partnerships.

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Example: Very few firms have the size and capability to manage and own their own Datacentre. This is when a partner such as Datacom could

provide this. It’s the difference between having somebody who provides you with data alone, and someone who creates, edits and presents that data to partners and gets them as invested in your strategy as you are.

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WHO IS PROVIDING STRATEGIC IT LEADERSHIP IN YOUR BUSINESS?

1. YOU HAVE NO IT STRATEGYAn IT strategy is designed to serve and deliver your business strategy. The absence of an IT strategy can lead to unstructured IT expenditure and leave the business questioning return on investment. A well-developed IT strategy not only provides a forecast for expenditure, it also determines investment principles, technical principles, overall infrastructure architecture, and IT support staffing requirements. The strategy becomes a routine point of reference for all IT activities at an operational level and an important checkpoint at an executive level.

2. YOUR CURRENT IT LEADER IS NOT OFFERING LEADERSHIPOnce upon a time all the techies hid in the back office. The universal expansion and adoption of technology has pushed them to the forefront, to the point where people in IT roles must be more personable due to their increased customer-facing interactions (both externally and internally) and the person responsible for IT in your organisation must also be a leader. This leader needs to be respected, able to influence others and push through project initiatives as an equal in the executive team. Most of all they need to ensure projects throughout the business align at both a strategy and execution level, along with meeting budget requirements (as much as the CFO would do from a financial perspective).

Who owns the IT strategy in your organisation? Are they actively achieving business objectives or are they dragging organisational performance down?

It’s time to think about the introduction of a CIO role if:

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3. THERE IS A LACK OF RELEVANT EXPERIENCEIT leadership is largely derived from a combination of real-world experiences and solid educational credentials. An experienced CIO sets out to understand your business thoroughly, applying context gained from the wide range of experiences they have gathered throughout their career. Without that holistic experience, you can’t expect your IT leadership to be able to provide a practical strategy when it comes to crunch time.

4. THERE IS A LACK OF SOFT SKILLSDoes your current IT leader communicate effectively with all your key stakeholders, both internally and externally? It is vital that a CIO builds trust with your team and is seen to be adding value to your organisation’s systems, strategy and processes. A relationship built on trust, that encourages stakeholders to speak candidly about their challenges and experiences will enable your CIO to successfully lead projects that require cross-functional collaboration.

5. THEY AREN’T AGILEAn experienced CIO can effectively lead an organisation through constant change. This includes being on top of the latest technological trends (such as Artificial Intelligence), as well as being able to inform the executive team on new insights that affect strategy and execution.

6. YOUR CURRENT IT LEADER IS NOT A MENTORGood CIOs develop their direct reports; great CIOs play a role in developing the whole team. As an executive leader, your CIO should be active in sharing their knowledge and experience at all levels of an organisation. It is their responsibility to ensure your executive team is kept informed of IT developments so they can contribute effectively to strategic decision making. Technology and Systems are just as important as the financials of a business and everyone needs to be able to understand and relate to them.

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RON CARUCCI

Ron Carucci author of Rising to Power, found in a longitudinal study that there are four major factors among leading executives: they know the whole business, they are great decision makers, they know the industry, and they form deep, trusting relationships. More on this research can be found in this good summary article in Harvard Business Review: A 10-Year Study Reveals What Great Executives Know and Do.

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ESTABLISHING VALUE AND DEFINING YOUR CIO’S KPIs

A CIO can be incredibly valuable to your business, but it is important to know just how valuable they are and how you establish this value.

BASELINEBy defining the current state of your organisation’s IT systems you can establish a baseline to work from. This will then allow you to establish and measure benchmarks, and understand both the challenges and opportunities the role may encounter.

THE NUMBERS THAT MATTERNumbers matter, but what matters more is ensuring you are tracking the right numbers. Sure, you can measure Uptime/Service Availability, Policy Adherence (eg. server patching), Service Level Agreements and budgets, but tracking the wrong numbers can mislead and offer no insight or guidance as to future performance.

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DYNAMIC CEOS AND CIOS WILL BE INTERESTED IN:

CUSTOMER ENGAGEMENTDo we have technologies in place that help us collect data about who our customers are, their needs and their preferences? If that data exists can it be quickly and easily analysed by the decision makers in our business? What automation do we have in place that aids us in responding to common customer queries? Can we free up valuable sales administration time by deploying intelligent BOTS that can interact with customers on our website, taking orders or responding to routine questions?

EMPLOYEE ENGAGEMENTAre our IT systems helping retain staff or giving them reason to look at alternative employment opportunities? Is the technology in our business encouraging collaboration, communication and participation, helping to grow a positive and progressive culture? What internal communication strategies are in place? Are there technologies aligned to those strategies? Is it helping the business reach staff at the right time and place?

IT PROJECT DELIVERYAre the objectives of current projects well defined and understood? Are we identifying risks on the project journey? Do we have appropriate communication plans in place that will inform stakeholders?

INTERNAL CUSTOMER SATISFACTIONDo we understand if IT operations (service/help desk) and the systems they deliver and support are allowing staff to be more productive and efficient in their jobs? Are staff tolerating IT or do they trust the systems and IT support, actively seeking out new technology opportunities?

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THE CHANGING ROLE OF THE CIO

The role of the CIO has evolved over time. Could you now benefit from an increased skillset in this area? Here’s what the new, modern CIO can offer your business:

STRATEGYPerhaps the biggest change to the modern CIO role is the strategic focus. Rather than simply deploying technology at the request of the business, a CIO is now an intrinsic part of a business’s strategy development and implementation. Nowadays, CIOs assist with forming a growth-first strategy, dealing with risk mitigation as well as mergers and acquisitions and the development of new operating models. Long-term technology investments that align with a company’s strategy are also within their role, giving them the power to assist with creating a future-forward direction for the company they are in.

OPERATIONSThe role of the CIO needs to balance strategy and operations. Operational duties would include oversight of systems, IT support teams, and the general responsibility of all things technology-driven within the business. The added complexity to this support role is that it is cross-functional – key systems might be owned by the finance department but supported by the CIO’s team.

CIOs work with finance to review capital requirements and prepare business cases for new projects, establish project teams as well as actively identify process inefficiencies and system improvements. They are active in their business, taking ownership of all processes related to technology. If a project can be particularly beneficial to the business, they have the ability to drive execution faster and maximise the benefits to the business by looking at learnings and applying them across the business. 12

13“There is a fundamental disconnect between the wealth of digital data available to us and the physical world in which we apply it.” 1

1Michael Porter on Augmented Reality Strategy

DATA & SYSTEMSA CIO is going to be fluent in a range of IT systems– both in knowing the existing capabilities of the software their company uses and keeping up to date on new digital developments in the company’s industry. Keeping up to date with technology means keeping up to date with the insights that specific data can provide. An example could be data visualisation tools to identify business intelligence. This up-to-the-minute information can be easily communicated and presented to the business in graphs and charts to show results and trends.

LEADERSHIPFinally, there is the leadership role for a CIO as part of the executive team. This role is no longer tied to a desk, collating information, playing with tech and analysing reports. A modern CIO must actively network just as much as other C-level executives. They are an equal contributor in negotiating major contracts, presenting to directors, providing guidance to other C-level executives (particularly the CEO), and generally working with internal and external stakeholders to improve the business on an operational and strategic level.

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Read about Julie Raue, formerly of Air New Zealand – Building the next digital milestone which gives a good overview of her journey and development of the CIO role.

A CIO should be able to identify the weak points of your business and critical strategy execution metrics and then determine the most appropriate KPIs to measure performance.

What is clear today is that the quantifiable metrics and ‘hard’ number KPIs are interlinked with the ‘softer’ non-financial side of the business. A skilled CIO understands the impact each metric has on one another, and the impact on the whole business.

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WHEN SHOULD YOU HIRE A CIO?

CEOs and business owners need to be mindful of three signs that could indicate it’s time for you to consider investing in a CIO.

1. GROWTH (OR LACK OF IT) IS OUT OF CONTROL Two scenarios:1. You have a growth strategy and execution is a problem. The strategy is sound, but teams,

resources and systems are not being coordinated to deliver on the strategy.

2. Revenue is growing like crazy. Systems and processes (or the lack of them) are becoming increasingly complex, causing slowdowns, exasperating growing pains, and you are quickly realising that your systems are becoming too complex for your company’s existing IT resource to manage.

2. COMPLEXITYThe business has grown and has become increasingly more complex. Additional resources don’t seem to be making a difference. Your growth strategy is only going to add more burdens. Complexity comes in many forms, and growth puts real strain on systems and people.

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EXECUTION DIFFICULTYMany businesses start by hiring an IT Support Engineer to look after day to day support activities. Eventually, they progress to the position of IT Manager. The progression at these levels is quite simple: IT Support Engineers help users; IT Managers help with additional complexity and contribute at an operational level. But there’s one thing a CIO does that these IT professionals don’t: strategy.

Without strategic leadership, technology commonly ‘sprawls’ creating more complexity and consequently more cost. Investment in systems with poor integration capabilities, or an ability to be accessed on tools such as mobile devices, often leads to investment in additional middleware software designed to ‘patch up’ the shortfalls. That attracts more software licencing, more supplier contracts, more time to coordinate and yes, more cost.

SUMMARYIT is now a strategic advantage. It’s at the heart of all business functions and, leveraged correctly, can assist your business in remaining productive, competitive and profitable.

Investment in IT is no longer just an operational conversation, it’s a strategic discussion focused on supporting the business to reach and exceed its business objectives.

Information Technology continues to develop and change at a rapid pace, which means your business’s ability to watch, identify and leverage technological change for better business outcomes is more relevant than ever.

Addressing all these challenges requires the introduction of an experienced CIO.

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GET THE BENEFITS OF A CIO WITHOUT THE COST

CIOs are valuable, but they are a significant cost to your organisation and the market is tight. For a full time, salaried CIO you can expect a starting salary of $170,000 per annum. Additionally, as part of the package, a vehicle and the usual senior executive benefits would apply.

The good news is there are other ways to have expertise on-tap without the full salary allocation.

PART TIME / CONTRACT ROLETo start with your business probably won’t need a full-time CIO dedicating eight hours of attention to the role each day. You may only need assistance during a particularly tricky business event, such as a merger, or you may need a CIO one day a week to knock your business into shape. This is where a part-time CIO can help reduce cost. If you need them more often, you can scale up, or transfer to a full-time CIO once you’ve hit some revenue and growth objectives. There are some downsides though. You’ll often miss out on the long-term benefits of a full-time CIO, such as cultural change and mentorship, but you will get your main pain points covered.

VIRTUAL CIOVirtual CIOs (vCIO) are a new breed, an extension of the growing number of start-ups and small businesses in the modern world. A vCIO performs all the same technology and strategic duties of a regular CIO. They also cost a lot less: on average, about half the cost of a full-time, physical CIO. This is because vCIOs are often a team of experts that aren’t hired directly by your company. Rather, they are an outsourced resource. That means you don’t have to pay a six-figure salary, nor deal with all the additional costs of hiring and regulating a normal CIO such as annual leave and benefits. Furthermore, with a vCIO team, you get a set of experts with a wide skillset: no need to pay extra for a specialist when a regular CIO reaches the end of their tether. You can scale your vCIO as well, in much the same way as a part-time CIO, and they can fulfil as many, or as few, roles as you need.

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TOP TIPS FOR HIRING THE RIGHT EXECUTIVE FOR YOUR BUSINESS

Hiring for executive level roles can be daunting, the stakes are high for everyone. We have identified five critical elements:

EXPERIENCEThe background, roles and career to date are obvious elements, but you need to look beyond the obvious. Were these roles in a highly structured environment such as banking? This may be what you’re looking for if you are also in a structured firm but that experience may not translate if your organisation is more free range.

Typically, a candidate is going to have six to eight years’ experience in senior roles and may have invested in further education like an MBA. Experience doesn’t stop at formal education. Ideally your prospective CIO would have been involved in your sector and business size for many years. The difference in the technology priorities between a company with 20 employees and a company with 200 employees within the same industry are big enough, but consider a large manufacturing company compared to a smaller professional services entity - a different kind of CIO is required for each.

CULTURAL FITMake sure there is a cultural fit within your team, test and test again during the recruitment process. You can use a variety of techniques and different environments to assess for fit. Arrange candidates to meet with two or three others members of your team, take the prospective hire out for coffee and engage them in a more informal setting, invite them to attend a more formal meeting with key stakeholders. You want to ensure they are a match not just with the business owner or CEO, but with your team as a whole.

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SOFT SKILLSAssess a candidate’s soft skills and do a range of testing so you can see how their skills fit into your executive team. Gallup Strength Finder is an effective tool to access a candidate with multiple members of the Executive Team.

RESOURCINGWork out how you are going to fully resource this role; this is much more than just budget. How is everyone in the executive team going to add value during the induction and initial 90-120 days as the new hire gets up to speed with the business. What direct reports are they going to have? What critical vendor relationships need introduction? Is your organisation’s strategy up to date? Do you have a good sense of what the early wins for this role will be?

TIMEFRAMEWhat does success look like and when by? Have you defined this crucial yet forgotten reference point, and furthermore does everyone know it? The average CIO will stay with your company for about four to six years. Will the CIO role, your business resources and your technology requirements still look the same in two or five years? Will your company and your CIO be able to adjust to all the potential changes over that time? In a similar vein, we are living in a business world defined by technological and cultural change.

The First 90 Days: Critical Success Strategies for New Leaders at all Levels – Michael Watkins

The CEO Next Door: the 4 Behaviours that transform ordinary people into world-class leaders

Topgrading: the proven hiring and promoting method that turbo charges company performance

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Key attributes of the ideal CIO:

SUMMARY

RELEVANT EDUCATION AND CONTINUOUS PROFESSIONAL DEVELOPMENT

RELEVANT EXPERIENCE IN YOUR INDUSTRY

IS A GREAT CULTURAL FIT

A COLLABORATIVE FOCUS

BUSINESS SKILLS

MENTORSHIP CAPABILITIES

The business needs to keep in mind:

TIMEFRAME RESOURCING

With these factors in mind, you should have no trouble finding the CIO who is the perfect fit for your business.

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HERE TO HELP

At IT Partners, we are more than just your IT support team; we’re your partner in business. We specialise in thinking differently and taking a whole business view.

That’s why we manage your IT systems and leverage the technology and telecommunications in the way that best supports your business needs, goals, and growth. Like IT, business is a system of inter-related, moving, changing parts that ultimately must deliver value. We live this every day, and help you live it too.

IT Partners is an experienced team of professionals providing IT support to medium-to-large sized businesses in Hamilton and throughout the Waikato. We make it our priority to understand our client’s business first and foremost, and then fit technology, solutions and services around their needs to deliver outcomes that work.

We combine our collective knowledge and expertise to ensure the job is done right the first time, to help your business perform efficiently, productively, and profitably now and into the future.

For help from one of our support team, please call our Head of Technology,

Bevan Lindsey on +64 7 974 1708 or email bevan.lindsey@itpartners.co.nz.